The difficulties of development in Timor-Leste

In Timor-Leste 41% of the population lives below the basic needs poverty line, with estimates [pdf] that 58% of communities live in poor housing conditions and the majority have no access to clean water and sanitation. Yet across the country hundreds of brand new prefabricated houses lie vacant. These houses, the product of the government’s 2011 Millennium Development Goals (MDG) Suco Program [pdf], exemplify the difficulties of development in one of Australia’s nearest neighbours.

The Timor-Leste government has access to significant oil and gas revenues from the Timor Sea, with US$14.6 billion in its sovereign wealth Petroleum Fund. These revenues have funded a raft of social security schemes and massive investments in infrastructure. However, the government faces a significant challenge: some projections forecast [pdf] that these revenues will be exhausted by 2025, and there is presently no obvious way to replace them. This means that the development decisions the government makes in the next few years will be critical to determining whether Timor-Leste has a future as a thriving middle-income state, or whether it declines further into poverty.

The government has opted to focus the bulk of its development spending on infrastructure, with the rationale that this is necessary for economic development. However, infrastructure development has proved difficult and budget execution has been poor; it is estimated at less than 15% on most projects.

The MDG Suco Program, though not an infrastructure program itself, illustrates the difficulties of infrastructure development. Under the program the government awarded [pdf] a US$144 million contract (later reduced [pdf] to US$87 million) to an Indonesian company to import approximately 9,000 prefabricated houses. The initial plan was that five of these houses would be erected in every one of Timor-Leste’s 2,225 aldeia (hamlets) and would be occupied by vulnerable members of the community, such as the elderly and disabled, female-headed households and veterans of the resistance to Indonesian occupation. The goal was that more than 55,000 houses would be built by 2015 in order to help meet Timor-Leste’s MDG targets, and that the houses would have solar energy, water and sanitation.

Timor-Leste NGO La’o Hamutuk has described the program as a ‘lost opportunity’, because it used imported rather than local materials and did not support local employment or small businesses. The program was implemented without the adequate participation of the communities it would target and effect, and there are questions over whether the prefabricated houses are culturally and environmentally appropriate for tropical Timor-Leste. Moreover, many of the houses that have been put in place are unoccupied, slowly deteriorating in Timor-Leste’s harsh climate.

Those MDG Suco Program houses that are occupied demonstrate additional challenges. At the periphery of the village of Uma Boco on the south coast of Manatuto district, 126 of the prefabricated houses have been constructed in a cleared forest – a clear departure from the original plan. Despite the fact that all the houses have been allocated to select ‘vulnerable’ families, including 26 houses for younger families, over half remained unoccupied as of September 2013. Although the houses use green energy and the light-coloured roofs do well to reflect the tropical sun’s radiation, there are some inherent flaws in the project design and implementation. Foremost, there is the issue of poor access to clean water. Families began to move into this settlement in June 2013, yet their dwellings were still unconnected to clean water sources in September. Residents stated that they walked to the main Uma Boco village to use the water pumps and taps to wash, clean and fetch water. Water scarcity has also meant that residents were unable to use the toilets fitted in their houses, and instead they were utilising the surrounding forest for such needs.

Furthermore, the MDG houses are designed in such a way that household sewage and waste flow out into on-site open drains, which can promote waterborne contamination and diseases, posing greater health implications – particularly for children and the elderly – and environmental damage in the long-term. Moreover, the majority of rural Timorese families continue to rely on cheap firewood for cooking and the kitchen is typically separated from the main residence. Unsurprisingly, small thatched shelters have been informally constructed behind some houses for this purpose.

Each household only has a small plot of land surrounding their dwelling to grow food. Some families have planted maize, peanuts and vegetables, but as they wait for their first harvest they are reliant on larger family fields at a distance for everyday consumption and income. A number of residents raised chickens, and stressed that they were strictly not permitted to keep other livestock such as pigs, goats or cattle in the settlement to maintain hygienic living conditions. Once again, they turned to family relatives who had access to larger plots of land in the main village to rear animals and keep watch over them. Ironically, by constructing these MDG houses away from local communities, they may do more harm by limiting access to kin relations, livelihood resources and social services for those who need them most. Separating disadvantaged families from their communities may adversely perpetuate local stigmas associated with physical disabilities and mental health issues. The construction of social housing cannot be conceived merely as a technical feat, but requires a holistic understanding of local livelihoods and social realities.

The MDG Suco Program is paved with good intentions. The good news is perhaps that because of slow implementation only US$14 million [pdf] of the US$93 million allocated to the program in 2012 was spent. There is still time to rethink the program.

The difficulties of the program highlight the challenges that face Timor-Leste. While infrastructure is important to Timor-Leste’s economic development, the government cannot afford for its finite resources to be wasted on poorly conceived and executed programs.

With these issues in mind, the Australian National University is hosting a two day Timor-Leste Update on 28 and 29 November 2013. More information can be found here.

Dr Joanne Wallis and Dr Pyone Myat Thu are from the School of International, Political and Strategic Studies in the College of Asia and the Pacific at the Australian National University.

Joanne Wallis

Dr Joanne Wallis is from the School of International, Political and Strategic Studies in the College of Asia and the Pacific at the Australian National University.

Pyone Myat Thu

Pyone Myat Thu is a Research Fellow in the School of Agriculture and Environment at the University of Western Australia.


  • Naturally, Timor-Leste has hundred of thousand past problems (social, political, wars, crisis etc.) since Portuguese times, Japan from 1942, Indonesia, sequentially leaving the country in most miserable & poor conditions which can not be smoothly settled at this time & it is against worsened by the many mountain ranges rolling around the territory from the east part-central areas till the west sectors. I could not think consciously of someone from rich-developed country without viewing upon all these very challenging natural factors/variables then can say, everything is ok. So the overall challenges laid behind the very natural barriers/landscape so try to solve this at first hand before turning the point real development on the ground ahead with.

  • Hello, Invite everyone to Timor a real place and I hope real thing’s happen for everyone in Timor Leste
    that will make a reality of real people.

  • What can be grasped from this program that government managed to relocate the community to one place with substandard housing. The problem is: who live there and what they do for their living. This simple question will drag our views on infrastructure provision versus equity.

    In one part, the government has put an effort to solve the housing problem in some Sucos. However, the plan without any deeper assessment took place. People who lived there might be impoverished class and farmers who subsistence from agricultural cultivation. For them might be difficult to maintain this type of prefabricated housing, and where to keep their pigs, goats and other pastoral products. Meanwhile, there is no spaces and sheds provided to store them. I have been to one of these locations, no water connection there and absent from bitumen roads.

    This can be claimed as “Palliative Plan”, which indicates that the plan is not solving the root of housing problem, instead to help the local more expose to other problems such accessibility, mobility and deprivation. I would suggest, one of the solutions, it might be more plausible to subsidise the communities in the Sucos with some funds for upgrading their existing housing, privies, and provide communal water source (Lavanderia). At the same time promote comparative advantage of the area for it sustainability.

  • I have three of these “relocation camps” in my area in Suluwesi. Surely you can see the money going into pockets.

    Tony said, “It is hard to comprehend how a major housing project could be so inept.” It truly is for a 30-year builder like myself, until I learned to watch the money. Housing projects, like all other projects, are avenues for money diversion. When you say you are doing good for others it means that people will give you money which can “disappear” in certain areas.

    Tony also said, “We each have some vision and understanding…” The people who want to help others have a higher vision and understanding than the criminal element that has a lower and more narrow vision directed at the pocket. Once people understand that, giving money to people to help others is not really a good idea without proper supervision. Even for some faith-based groups.

    • Hello!

      It is not uncommon in deprived communities that aid money gets lost within the process. I had been involved in such irrigation projects in Balochistan area of Pakistan for 6 years and have observed that without community participation, the chances of success are very small.

      I studied Social Engineering later and came to know that a comprehensive Monitoring & Evaluation consultancy for community welfare projects is a necessity. Moreover, at least a basic level Value Engineering analysis should also be carried out at the time of initial planning and design of projects to see if the investments goes in the right direction and choose best available options.

      I am planning to establish a consultancy office for Value Engineering and Monitoring & Evaluation in Dili (Timor Leste) and would appreciate if anyone can share their views on the same with me and with possible local partnership.

      You can always contact me directly through my email:

  • Thanks for writing this article. I’m curious as to the source of the number in your first sentence; the most recent data I’m aware of put the number of Timor-Leste people below the poverty line at around 50% in 2011 — a tragedy — essentially unchanged since 2007.

    I tried to check how much has been spent on MDG Suco in 2013, but the gov’t’s Transparency Portal is not working. However, as of 14 October, only $3.8 million of the $39 million appropriated for the MDG-Suco program during 2013 has been disbursed, with another $26 million obligated by contract.
    In 2014, the Government proposes to spend $23m more on this program, plus $45 million per year in 2015 and 2016, and $12m/year in 2017-2018. That money could educate a lot of children or cure a lot of sick people.

    • Mr Xanana is the one who must take the blame for the whole range of issues in Timor Leste. After more than 7 years in office he has spent more than 7 billion dollars, but still do not see any concrete results.

      Read this:

      For a wealthy nation such as Australia, it is a noble thing to do in helping third world countries like East Timor. Unlike other underdeveloped countries around the world or in our own South Pacific region in particular, East Timor is bestowed by God the abundance of natural resources, most notably are oil and gas resources. This tiny nation is receiving average 270 million US dollars every quarter in revenue from its oil and gas resources. Probably not many countries in the world (of East Timor’s size) that have similar fortune as East Timor. Let us compare East Timor with its peers in the South Pacific region such as Fiji, Vanuatu, etc. To my best knowledge, unlike East Timor, Fiji and Vanuatu do not have any significant mineral resources such as oil and gas that East Timor has. They rely much on tourism industry. But they are doing well. They progress and improve. East Timor’s annual budget is 1 billion US dollars. The question is that with this financial position, does East Timor qualify or deserve to receive foreign aid of this kind? No. East Timor does not need this kind of aid. Ideally, East Timor can support itself financially.

      Unfortunately, what we have been seeing until today is that after 14 years of independence, instead of moving forward, East Timor is moving backward. Let us simply count from the period when Mr Xanana Gusmao came to office as prime minister. He has been in office for more than 7 years – which means that more than 7 billion US dollar have been spent, but there is no a concrete result whatsoever. 1.5 billion dollars for 2014 budget will go down the drain.

      Mr Xanana’s both terms in government has never been effective anyway….Billions of dollars just wasted, melted away and went down the drain. Instead of moving forward, East Timor is moving backward. Bad roads, bad hospitals, schools, bad electricity, no running water, just to name a few and you name it. Mr Xanana even has no idea and vision how to patch up a pot hole let alone to build a new road. Roads built during the Indonesian era have turned to dirt road beyond recognition and incredibly muddy during the wet season and slippery and so forth. Just as an example of comparison, during the Indonesian era, when people travelled by a public bus from Dili to Suai via Ainaro – took around 6-7 hours to get to Suai – that already included meal and toilet stops. But now it takes 15 hours from Dili to Suai. What a huge setback!

      What Xanana has been saying all along to tackle corruption and mismanagement and those kinds of things is simply rhetoric. Back in 2009 in his speech, Xanana was saying “if TL’s petroleum is wisely and transparently managed, it will allow us as a sovereign nation to use our own resources to improve our infrastructure, invest in health and education and grow our economy so that we can build our country and provide a brighter future for our children”. This is totally rubbish. Xanana does not even have the capacity to keep Dili clean. It is dirty, filthy, stinky, you name it let alone to build the country. Just look at the so called Dili international airport.

      East Timor’s condition will never improve despite East Timor is among the tiny nations that earn large amount of cash revenue from its oil and gas resources. The bulk of East Timorese do not get any benefit from their natural wealth and still and remain live under the poverty line. Mr Xanana only enriches certain class of people which are the contractors that secure government or public projects. Even though they – the contractors – do botched job, poor quality of a project and even an unfinished project, they manage to get payment from the government because they bribe, connive and conspire with government authorities. They carve up the money among themselves. Then they spend the money for luxury cars, building private villas, overseas trip/holidays, purchasing properties overseas such as in Australia, Bali etc.

      East Timor is one of the tiny naturally rich countries but will remain poor.

    • We should be careful to learn from the past experience as nations loose their investments without them and get deeper and deeper in financial burden with time with little tangible returns.

    • It is immaterial as to how much portion of aid you spend and how much you keep in reserve. The main criteria should be the investment should have a possible higher tangible returns – else the nations get into the burden of loans that keep on increasing to a staggering proportion with time.

  • Appreciate to hear from academician from other country to start the ball rolling on such development challenges. Ironically, from the executive part, the shocking thing is that planners did not even comprehend their own people’s socioeconomic situation. Everybody can see this misunderstanding by looking at (as you pointed out) prefabricated houses for the villagers. Beneficiaries will find it hard in some cases how to keep the house clean, how to maintain, how to personalize and even how to improve the house. The idea is they have never been living in such prefabricated houses. We know that changing people’s life is simply giving them something new. But it is no true to provide them necessity that is totally opposite with their reality. The story told, majority of Timorese lived in local material-made houses. I can tell, before Portuguese – caves and uma adat, post the Portuguese rule – majority remained and minority changed – and then significant changes happened under Indonesian rule, people lived in the semi modern material-made house like you can see it now throughout the country. Hence, it’s a bit unrealistic to expect all of the beneficiaries to live viably under a box looking structure placed in a barren land with no basic infrastructure and distance walking to pick food, to go to school and health center and etc.

    Another is dragging beneficiaries far away from their source of livelihood. It is somehow true in most of the locations designation that the project even help adding more difficulty people instead of lessening it . If you are a vulnerable person, walking for two to four KMs in one walk, you would probably think that you have made a big mistake for living in such location. There were some programs so called “Transmigration”, from which the government should have learned. Indonesian government built multiple transmigration sites all over the country. In Loes, Suai, Lospalos and other districts, for example, once houses were built there, parcels of lands were released for self sufficient agricultural activities. It’s not as size as five strides backyard because it could only supply a week’s meal. Sufficiently, land parcels were released so that the whole community could make it through a year’s meal. Certainly, this model’s success, based on several site visits I have done, had so much correlation with Timor Leste’s past, like land deprivation by force and all that, but I found a model that is worth of learning since it was a hands on experience, or it existed in our (Timorese) land. With this local historical records, Timor Leste does not need model from either America or Australia because it usually comes up with high technology and high skills. All I can say is that Timor Leste needs to domesticate all the compiled references. For example, From prefabricated house to local material made house, commercial oriented neighborhood to agricultural oriented neighborhood. This could be more suitable. Hasty planning process might have caused less appreciation from the beneficiaries, and also there might be something to do with the budget execution deadline.

    MDG program was not the first social housing provision programs in Timor Leste. It was preceded by two others, such as from Social Solidarity Ministry, and the other one from Presidency office (Former President Ramos Hortas’ ). People might wonder why this MDG housing project differs from the other two in terms of budget which was higher but made worst in result?. One might think that definition of poor or vulnerable people in Timor Leste differs according to each person’s and organization’s interpretation. Difference in defining poor/vulnerable person influenced so much on project implementation. Everybody can check out the cost for each house. Former President’s project executed approximately less than three or four thousand $, slight difference or even probably the same amount for the project from Social Solidarity. Whereas, the cost for MDG housing program is substantially higher than those other two. We can not, of course, compare the type of the house between MDG and those two. But, as it was reported, half of the new MDG houses were abandoned, thus we can infer that the result from MDG program was worse than those two small scale housing programs, which even though simple model and from a small amount of money, houses were occupied and utilized.

    By the way, whatever failures Timorese have made, we will learn from it and keep moving.


    • For a poor nation like Timor Leste, the best option is to slowly improve their existing living conditions giving due consideration to the local population priorities.

      Community participation is THE KEY for a success in these cases as I have witnessed in poor areas project in Pakistan.

  • MDG Suco Program is a good case that you bring. It is a reflection about poor project management. But the Government has acknowledged these problems. There is a big reduction in term of budget for the next years. The Government is also committed to purchase inputs locally so that it will have trickle down effect. We are looking forward to policy change in this project.

    • Policy change as well as induction of local population to impart their hands and skills should be encouraged along with free skill training so that the local people will feel ownership in the development and improvement in their life styles.

  • Joanne and Pyone, thank you for this piece. The MDG Suco Program is something I have been reading about with interest so your outline of the challenges was really interesting. While it is really heartening to see the GoTL working to direct its attention and resources to the most vulnerable, I also wondered why it didn’t use the opportunity to more actively engage local labour and use local materials in the construction process, particularly given the youth unemployment challenge and the very limited access to economic opportunities or training in the districts. It is my understanding that construction courses are being taught at DIT and elsewhere–the Suco project would seem like an excellent opportunity to partner with these training organisations to upskill people in the districts and to provide practical experience in construction and an opportunity for access to paid work. This also could have created more of a sense of community ownership in the project and a sense of pride about the houses. (Though perhaps something like this may have been an overstretch, given the already slow implementation of the project).

    As you note, it also seems that the project was conceived without fully assessing the needs of communities or those needing access to social housing. Given that access to education, health services, WASH and livelihoods is already such a challenge for vulnerable individuals and families, it’s a concern that this hasn’t been taken into account.

    There’s also the question of infrastructure maintenance — who owns the houses? The government, the vulnerable persons, or the suco or aldeia? Who is responsible for their maintenance?

    Perhaps you know this, but I’m also unclear on whether the houses are a gift from the government to the vulnerable or whether they remain community property i.e. if an elderly person living in one of the houses dies, or if a person moves from the house, is the house reallocated to another vulnerable person and how is this decided? Given that this is a decently sized rollout of social housing, it would seem wise for there to be some kind of social policy to guide the allocation and management of the houses so that they continue to be a useful community resource for vulnerable persons,so that expectations are clear and there isn’t the potential for conflict in the communities.

    • It is hard to comprehend how a major housing project could be so inept. Who thought it was a good idea to move people (and especially vulnerable people) into new housing without water connected? And so on. The fact that major infrastructure gets as badly implemented as often as it does is (unfortunately) not all that surprising, but when it is basic housing, we really do need to step back a bit and ask what is going wrong. It is not the lack of information or comprehension of the issues. There is already a massive literature on housing, as well as an extensive pool of competent commercial and international/local suppliers, and above all widespread cultural and practical knowledge around housing. We each have some vision and understanding of what housing means and what is sensible.

      One can only come to the depressing conclusion that no-one in authority bothered to pay any real attention to the situation and wishes of the intended recipients. No doubt there will be deeper concerns expressed about the financing and the contracting and so on, and we would all do well to accept that housing is not a simple issue, given its cultural and economic resonance. But when it comes down to it, if it becomes too hard to build simple houses, there is a serious problem that needs to be fixed. Using local suppliers imbued with an understanding of local materials and culture would probably be a good start, though there can be economic traps in that route as well..

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