Overview of Australia's aid program to Timor-Leste

How we are helping

2014/15 Bilateral Outcome
$75.4 million

2015/16 Bilateral Budget Estimate
$68.0 million

2015/16 Total Australian ODA Estimate
$95.3 million

The Australian Government will provide an estimated $95.3 million in total ODA to Timor-Leste in 2015-16. This will include an estimated $68 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 state, Timor-Leste has made considerable progress in the past thirteen 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.

Over two thirds of Timorese still live on less than US$2 a day. The country’s mainly subsistence-based agriculture sector has with low productivity and there is limited access to markets. The private sector faces difficulties accessing finance, a low-skilled workforce and poor infrastructure. The maternal mortality rate is the highest in the region. While school enrolment has improved, learning outcomes remain poor. Women face significant barriers in accessing education and employment and high rates of domestic violence. Nutrition remains a major concern: 50 per cent of children under five years have stunting - one of the highest rates in the world.

Australia is committed to being an effective, responsive and long-term partner in Timor-Leste’s development. By helping 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 will focus on 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 lack of income-generating opportunities and a weak environment for private sector development. Australia will seek to help diversify Timor-Leste’s economy by increasing agricultural productivity and market linkages. We will support skills development initiatives and support the private sector to develop 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 clean water and improved sanitation, quality basic education, and maternal and child health services. We will focus on stronger protection from violence for women and children. We will continue to support implementation of Timor-Leste’s National Program for Village Development (PNDS).

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 help 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

  • Australia has supported 56,000 farming households to gain access to improved seed varieties of staple crops since 2011
  • We have supported over 98,000 people to gain access to safe water supply and over 79,000 people to basic sanitation since 2008
  • In 2014-15, we worked to connect 1,300 pregnant women with their local midwife through an innovative new program using mobile phone technology
  • In 2014-15, 1,415 additional clients (women and children survivors of violence) received specialist support services from our Ending Violence Against Women program partners on the ground
  • In 2015, over 460,000 early grade books in Tetum were provided to all primary schools in Timor-Leste
  • In 2014-15, Australia supported ten partnerships with the private sector, resulting in increased income for 335 farmers (79 women and 256 men)
  • In 2014-15, Australia’s assistance for road rehabilitation resulted in reduced travel time to markets in target communities by around 50 per cent
  • Australia’s advisory support to the Ministry of Finance has assisted in the predictability of budget allocation and spending across all government agencies

Our changing program

Australia remains Timor-Leste’s largest development partner. Australia’s aid program aligns with Timor-Leste’s own development priorities as reflected in its Strategic Development Plan 2011-2030. Aid is becoming a smaller proportion of Timor-Leste’s national budget – in 2015 Official Development Assistance 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 use its own resources to develop the economy and alleviate poverty. Australia will continue to support a range of sectors that will address constraints to Timor-Leste’s critical development needs.

Australia will intensify its focus on improving nutrition, particularly for women and children. Australia’s multi-sector response includes agriculture, health, food security and water and sanitation; as well as discrete support for the President’s Annual Nutrition Awards. Following the release of the 2015-16 budget, we have scaled back the number of Australia Awards recipients from 25 to 15 in the 2016 academic year and will focus on assisting Timor-Leste to maximise its USD31.2 million human capital development fund. Australia’s budget support to the Ministry of Finance will reduce by 50 per cent, although advisory support will continue.