La’o Hamutuk: The 2019 budget fails to reflect major election promises Featured

Graphic design of State budget Graphic design of State budget Photo Graphic Designed by La'o Hamutuk

By Monty Jacka

The East Timorese government’s budget shows the party is failing to deliver on its major election promises, according to non-governmental organisation La’o Hamutuk,

The organisation’s study into government spending in the 2019 State Budget found “the money doesn’t match the promises”, La’o Hamutuk researcher Adilson da Costa said.

While the government claims its priorities are education, health, agriculture, and water, these industries will receive less than 20 per cent of state spending this year, Mr de Costa said.

Education receives 10 per cent of the budget, health 5 per cent, while agriculture and water receive 2 and 1 per cent respectively.
Meanwhile state admin, which includes paying the salaries of politicians and other government workers as well as financing government agencies, receives 17 per cent of the budget.

Mr da Costa described this percentage as “too high”, especially while the supposed major priorities receive so little. It is crucial the government improves its investment in these industries to accurately reflect their status as priorities for the country, he said. 

Improving investment in agriculture is particularly important, as East Timor’s once expansive oil resources quickly diminish. “Timor-Leste has almost no industry and a tiny private sector,” he said. “[Despite this,] from 2008 through to 2016, state spending grew faster than nearly every country in the world.”

East Timor is almost entirely financed by dwindling oil resources and the government needs to invest in developing its own industries such as agriculture to avoid an economic crisis when its oil inevitably runs out, he warned. “Even though agriculture is the livelihood of 65 per cent of the population, it received only 1.3 per cent of state expenditure in 2019,” he said. 

Mr de Costa highlighted investing in the development of the coffee industry, Timor-Leste’s second-most lucrative export as a key means of improving the nation’s economic outlook. 

There is hope for further investment in these industries in the future, with Prime Minister Taur Matan Ruak announcing on June 15 that he is seeking a US$1.6 billion budget for 2020. This would be an increase of over $100,000 compared to this year’s budget.

La’o Hamutuk is a local, independent, non-governmental organisation which conducts research, policy analysis, public education and advocacy.

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