RDTL Strategic Development Plan 2011-2030
Updated 17 September 2011
Prime Minister Xanana Gusmão began working on the 20-year Strategic Development Plan (SDP or PEDN) in 2009, and a summary was circulated at the April 2010 Development Development Partners meeting.
The full version of the National Strategic Development Plan (PEDN) was only made public in July 2011, and the April 2010 draft was never officially circulated, although La'o Hamutuk published a leaked "Final Draft" in May 2010. During 2010 the Prime Minister socialized the plan's goals across the country, and contracted with the Indonesian company PT DSI Makmur Sejahtera to develop it further. La'o Hamutuk raised several serious concerns about the foundations and and vision of the draft, as did UNDP and others.
During late 2010 and early 2011, several budgetary and administrative measures were enacted to implement the still-secret plan, including creating the Infrastructure Fund (Decree-Law 8/2011; also Portuguese, official) , the establishment of the National Development Agency (Decree-Law 11/2011; also Portuguese).
Following an all-night meeting, the Council of Ministers approved the 200-page Strategic Development Plan in the pre-dawn hours of 1 July 2011. According to the Government press release (also Tetum and Portuguese), "The plan aims to develop core infrastructure, human resources and to encourage the growth of the private sector in strategic industry sectors – a broad based agriculture sector, a thriving tourism industry and downstream industries in the oil and gas sector. ... The social capital section focuses on the nation’s social capital and on building a healthy and educated society to address the social needs of people and promote human development. The infrastructure section will ensure that the nation has the core and productive infrastructure needed to build a sustainable, growing and connected nation. And the economic development part sets out a plan to achieve a prosperous, modern economy and create jobs for the people."
Plan rushed through Parliament
The proposed SDP was distributed to Members of Parliament on Tuesday, 5 July 2011, with a request from the Prime Minister that they approve it in less than a week, by Monday 11 July, prior to the Development Partners Meeting. On Thursday afternoon, the Government posted the entire SDP to the Government portal website in English (16 MB) and Portuguese (4 MB). They did not include the cover letter and proposed resolution sent by the Prime Minister.
At the same time, Parliament was give a law to enable borrowing to finance this plan, which was enacted in September.
On 11 July, as Parliament began debating the process for approval of the Strategic Plan, La'o Hamutuk circulated 13 pages of preliminary thoughts (also Tetum) on the substance of the plan. The main points in our analysis, described in a two-page summary (also Tetum) are:
The Strategic Development Plan (SDP) is an important document, and is greatly improved over the version circulated last year. However, it is a large document, with many new ideas, and deserves thorough discussion before being enacted. We find it irresponsible that the Council of Ministers approved it after an all-night meeting, and it would be unconstitutional for Parliament to approve it less than a week after they received it.
The Plan includes a welcome focus on social capital, not only physical infrastructure as pervaded last year’s discussions. We hope that future budget priorities reflect this, and that some of the 52% of the 2011 State Budget allocated to physical infrastructure will be redirected to education and health.
We agree that a plan is not a budget, but it needs to be more than a dream, and should include more information about what it will cost and where the money will come from. In particular, we are concerned that the SDP will be financed by taking out loans, but there is only a passing reference to this in the document, with no specifics.
The SDP totally ignores Timor-Leste’s mammoth trade deficit, with little priority to reducing imports. It includes incorrect information about school enrollment, inflation, and petroleum dependency. It is unjustifiably optimistic regarding possible future oil discoveries, exports to ASEAN, reducing population growth.
The SDP should focus more on human and intellectual infrastructure for education (buildings are not enough), improving the quality as well as the quantity of education, and supporting the needs of Timor-Leste and our people, not just possible employers.
The SDP’s positive discussion of environmental protection is threatened by a number of environmentally dangerous projects currently underway with no environmental review.
- More analysis, information and priority should be given to renewable energy.
Land laws must recognize colonial injustices, and titling systems should not endanger land rights or discriminate against cash-poor farmers. More consultation is needed on the Land Law, and the Law and the SDP should consider the true value of land for people, not only its use by investors.
Economic justice for all our people, not only the eradication of extreme poverty, should be the plan’s economic objective.
Agriculture should promote food sovereignty. Organic, sustainable agriculture, growing products for local consumption, should be the priority, and farmers must be involved at every level of decision-making and implementation. The “Green Revolution” model of industrial, high-input agriculture has severe negative impacts in the long term.
Timor-Leste needs a broader vision of economic development. Since there is consensus that Timor-Leste needs to move away from oil-dependency in the long-term, we are disappointed that petroleum processing is the only industrial development discussed. What about agricultural processing, or light industry to replace imported products? The capital-intensive oil industry will provide few jobs for anyone, including Timorese. Allocating most of our intellectual and financial resources to the petroleum sector obstructs moving to a non-oil economy after oil and gas reserves are used up in 13 years.
Current processes to revise the Petroleum Fund Law, create the TimorGAP national oil company, and invest heavily in feasibility studies for the Tasi Mane Petroleum Corridor contradict the goals of the plan and exacerbate our dependence on petroleum and the danger of long-term economic instability. They need to be undertaken with more care, and balanced against ideas and needs of other sectors.
Increasing tourism requires more effort than merely building physical infrastructure.
Private sector investment should provide benefit, not use up people’s resources. Tax cuts, special economic zones and other favors for foreign businesses are unlikely to produce advantages for our people. State investment in business activities, such as Tasi Mane and rice importation, needs more careful analysis of its costs and benefits.
The security sector plans should serve the national interest. Human and budgetary resources spent on F-FDTL can be reallocated as external threats become smaller.
Public Sector management and good governance will be strengthened by designing institutional structures to resist corruption, and by having all state agencies use strengthened, government-wide systems for budgeting, procurement, hiring, salaries and public information.
Although the Macroeconomics section is better than earlier drafts, it is still weak, and needs more focus on the temporary nature of non-renewable resource wealth revenues. It should be more honest about oil dependency, inflation, population growth and plans for future spending and borrowing to finance this plan.
It is inconceivable that Timor-Leste can achieve real, long-term, annual non-oil GDP growth of 11.3%, higher than any country in recent history. Other than China, the best performing countries have grown 6.5% - 7.5%, and it is wishful thinking to expect Timor-Leste to grow nearly twice as fast as they could. Current rapidly escalating levels of public spending, the primary driver for our economy, are impossible to sustain.
| Click on the graphic to see what long-term GDP growth others have been able to achieve.|
More information related to the Strategic Development Plan can be found on the following pages on this website, which are frequently updated:
We welcome input and suggestions about how to make this analysis more accurate, relevant and useful.