Journalist
Time for Risky Ventures in Timor-Leste?
Posted: 9/6/11 07:00 PM ET
I recently spent a week in Timor-Leste, my first trip back there since July 2009. Bucking economic trends elsewhere -- well, in Europe, Japan and the US at least -- the country has been growing at around 10% per annum in recent years. This is largely down to offshore oil and gas, earnings from which make up almost all of the state budget and mean much-needed cash-to-spend for what is possibly Asia's poorest country. Timor-Leste does not process onshore -- it lacks the facilities and the personnel. So, despite the new money, oil and gas does not mean jobs for any of the estimated 40% urban youth that are unemployed. Some of the money has been spent on relocating the tens of thousands made homeless during the country's 2006 near collapse into civil war, but going by the SUVs and lavish-looking houses built by some Government personnel, some of the cash might be finding its way under tables or into private bank accounts. Scenting an opportunity, the country's opposition says it will campaign on an anti-graft ticket in elections scheduled for 2012. But what about the 'real economy', the day-to-day of things that people buy and sell? I filed a report on this for Irish radio, and I've posted the text of that story below, which can be also be seen on my website, with extra photos.
Railaco, Timor-Leste -- Up a winding, rock-strewn road through stunning mountain scenery an hour from the Timorese capital Dili, coffee farmer Bartolomeo de Deus shakes a basket of his arabica beans, ready for resale to Timor Global, one of three main coffee exporters in Timor Leste, also known as East Timor.
"I have 200 hectares under cultivation", he says, making him one of the bigger farmers in a country where coffee grows naturally and could be a lucrative export. "There is potential here", says Bill Tan, the Singaporean co-director of Timor Global. However he cautions that "farmers need to be shown how to nourish the crops and prune, for example", to maximise their output.
On average, a Timorese coffee farm produces 150-200 kilogrammes per hectare, while in neighbouring Papua New Guinea, yields are closer to 800 kg, sometimes even 1 tonne per hectare, and some of the coffee there sells close to the top of global premiums, coveted by connoisseurs in Australia and beyond.
Coffee and tourism could be major growth sectors for Timor-Leste, as it looks forward to its second decade of independence, which will come next year. While the country is physically-beautiful, with white sand beaches and untouched diving spots, it is expensive to get to by air and poor roads mean internal travel can be time-consuming.
Timor Leste's economy has grown at around 10% per annum 'since 2007 but this is fuelled, for want of a better word, by oil and gas. Bound by law to bank most of the US$7-8 billion revenue earned to date in a Norway-style fund, the idea is that the country will have money to draw on once the wells run dry.
Despite the recent growth, Timor Leste remains one of the poorest countries in the world. The country has received an estimated US$8billion in foreign aid since Indonesia's often-brutal occupation ended in 1999, but outside the rundown colonial kitsch of the capital Dili, poverty is high, electricity and running water are intermittent, or unavailable, and jobs are scarce. Neither oil nor gas can be processed in Timor-Leste, so despite the boost to state coffers, there are few jobs for Timorese.
To counter this, Irish Aid is working with the Timorese government and the International Labor Organisation to address unemployment and support small business developmetn. One woman who seems to get the entrepreneurial idea is Teresa Nunes Martins dos Santos, who like most Timorese has an almost-poetic Portuguese-style name, a legacy of the former coloniser.
Teresa and four colleagues in the western town of Liquica are making tasty tofu and tempe - affordable protein for rural Timorese who cannot afford to buy meat. The tofu-making team are trying to expand the business, and have commissioned a carpenter to make 4 extra wooden boxes needed to finish the soybean paste into tofu. "Every day we sell out almost straight away and make US$16.50" she says.
Some other investors have bigger plans, however. Tony Jape is a fifth generation Chinese-Timorese, whose ancestors came to the half-island country from Guangdong province. He is the driving force behind Timor Plaza, a multi-storey office, shopping and hotel complex under construction - albeit more slowly than planned - near the Dili's international airport.
He says he was partly-motivated by patriotism to take what he concedes is a risky venture. "If we Timorese do not invest in our own country, then we cannot complain when foreign investors are wary", he says, amid the din of jackhammers and drills on the top floor of the complex.
Other things are slowly falling into place. Kathleen Goncalves is Vice President of the recently-formed Timor-Leste Chamber of Commerce. She acknowledges that progress will be slow for business development in the country, but says things have improved
"2 years ago setting up a business was a nightmare, with red tape, slow processing. That has changed somewhat, but we still have a problem with access to finance, as bank loans are difficult to get"
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