Overview of Australia's aid program to Timor-Leste

How we are helping

2016-17 Total Australian ODA Estimated Outcome
$93.4 million

2017-18 Bilateral Budget Estimate
$68.0 million

2017-18 Total Australian ODA Estimate
$96.1 million

The Australian Government will provide an estimated $96.1 million in total ODA to Timor-Leste in 2017-18. This will include an estimated $68.0 million in bilateral funding to Timor-Leste managed by DFAT.

Australia has a strong interest in a prosperous and stable Timor-Leste. Australia and Timor-Leste are close neighbours, with a shared history and strong people-to-people links. Since Timor-Leste's independence in 2002, Australia has been its largest development partner. The Australia–Timor-Leste Strategic Planning Agreement for Development articulates our shared commitment to achieving Timor-Leste's development goals.

As a post-conflict fragile state, Timor-Leste has made considerable progress in the past fourteen years. Timor-Leste has recently enjoyed a fast-growing economy and its longest period of stability since independence. Human development indicators continue to improve – but challenges remain. Revenues are narrowly based on oil and gas and the rate of population growth is high.

Four in ten Timorese live below the national poverty line. The country's mainly subsistence-based agriculture sector has low productivity and there is limited access to markets. The private sector faces difficulties including accessing finance, a low-skilled workforce and poor infrastructure. The maternal mortality rate is one of the highest in the region. While school enrolment has improved, learning outcomes remain poor. Women face significant barriers in accessing education and employment and there are high rates of gender-based violence. Nutrition remains a major concern with high rates of stunting in children under five years (50 per cent).

Australia is committed to being an effective, responsive and long-term partner in Timor-Leste's development. By supporting Timor-Leste's efforts to improve livelihoods, enhance human development, and strengthen governance and institutions, we will contribute to our shared goal of a prosperous and secure nation, enabling the people of Timor-Leste to overcome poverty. Across all programs, we prioritise improving nutrition, empowering women and girls and supporting disability-inclusive development.

Our program has three strategic objectives as outlined in the Aid Investment Plan.

Objective 1: Improving livelihoods

Economic development in Timor-Leste is impeded by a lack of income-generating opportunities and a weak environment for private sector development. Australia will support Timor-Leste's efforts to diversify its economy by improving market linkages and rural infrastructure. We will support skills development initiatives and private sector development by improving the business enabling environment and forming partnerships with businesses.

Investments for improving livelihoods

Objective 2: Enhancing human development

Investing in human development is critical to improving opportunities and developing the economy. Australia will support Timor-Leste to build a healthier, more productive workforce by improving access to quality basic education, maternal and child health services and clean water and sanitation. We will focus on enhanced services for women and children affected by violence and improved nutrition through innovative cross-sectoral and collaborative approaches. We will continue to support communities to construct and manage basic infrastructure in villages across the country.

Investments for enhancing human development

Objective 3: Strengthening governance and institutions

Effective governance and strong institutions underpin a more diverse and inclusive economy, enhancing human development and maintaining social stability. Australia will support Timor-Leste's efforts to develop effective institutions to promote sustainable economic development and better delivery of services to communities.  The Australian Federal Police will continue to assist Timor-Leste to build a legitimate, effective and accountable police force.

Investments for strengthening governance and institutions

Our results

In 2015-16:

  • We supported the Ministry of Education to distribute new curriculum materials to 94 per cent of remote primary schools and 100 per cent of remote preschools.
  • We helped nearly 40,000 people gain skills through community-led infrastructure projects.
  • We completed the first national study into the prevalence and perpetration of gender-based violence and provided more than 1,100 new female survivors of violence with access to support services and legal aid.
  • Through our Market Development Facility, we created more than $450,000 in additional income for 2,950 farmers (more than half women) and leveraged over $1.8 million in additional private investment.
  • We helped the Prime Minister's Office to negotiate and agree program structures with 23 ministries and agencies, against which budgets have been allocated in 2017.  For the first time in Timor-Leste's history there is now a direct link between government plans and budgets, and from 2017, it will be possible to track how much is actually being spent on specific services and policies.
  • We provided 21,775 people with improved access to clean water and hygiene behaviour change programs.
  • We continued to help the Timorese Government improve its rural road network. Since 2012, we have helped rehabilitate more than 130 kilometres of roads, maintain an additional 375 kilometres and generate more than half a million days in employment for rural communities.
  • We supported the International Finance Corporation to improve business licensing processes, and the time taken to set up a business was reduced from 90 to 9 days.

Our changing program

Australia remains Timor-Leste's largest development partner. Australia's development program aligns with Timor-Leste's own development priorities as reflected in its Strategic Development Plan 2011-2030. Development assistance is becoming a smaller proportion of Timor-Leste's national budget – in 2015 Official Development Assistance (ODA) accounted for less than six per cent of the budget compared to 75 per cent in 2002. Australia is responding by focusing on assisting Timor-Leste to leverage its own resources to develop the economy and alleviate poverty. Australia will continue to support a range of sectors that will address constraints to the country's critical development needs.

Australia is intensifying its focus on improving nutrition, particularly for women and children. Australia's cross-sectoral approach on nutrition brings together agriculture, health, education, food security and water and sanitation.

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Last Updated: 22 September 2017