Subject: East Timor Eyes 7 Percent Growth by 2010

Also; ABC - East Timor economy set to improve

AP - Associated Press

East Timor Eyes 7 Percent Growth by 2010

APR. 4 3:10 A.M. ET ­ East Timor is planning a massive increase in spending on infrastructure, which it hopes will lead to economic growth of 7 percent by 2010, the prime minister said Tuesday.

Current growth levels in the half-island nation _ Asia's poorest nation, which won independence from Indonesia in 1999 _ stand at 2.3 percent, well below the level needed to increase living standards for most of its 800,000 people, Mari Alkitiri said in a speech to donor agencies.

Alkitiri said the country had earmarked more than US$82 million (euro67 million) over the next year for infrastructure projects, an increase of 75 percent from the previous fiscal year, to speed up the country's development. "To many, 7 percent growth is a mythical figure, a mirage in the desert," Alkitiri said. "Since I believe in the energy in to which our people can tap from and since I am a born optimist, I am sure that we will do it."

Foreign donors currently provide most of the country's budget, but a recently signed deal with neighboring Australia to jointly tap undersea oil and gas reserves will boost its revenues significantly. Alkitiri said foreign contractors would be welcome to bid for the infrastructure contracts, but that East Timorese citizens would have to make up at least 50 percent of the work force on any single project.

East Timor economy set to improve

AM - Tuesday, 4 April , 2006 08:24:00

[This is the print version of story]

Reporter: Sarah Hawke

TONY EASTLEY: Despite being one of the poorest nations in the world, there are signs that East Timor's economic problems have bottomed out and things will now start to improve. But it will be a struggle. The average life expectancy is 55 years, and on average women have seven children or more and there's little employment for them. But the World Bank feels the economic outlook is improving. Sarah Hawke travelled to Dili and compiled this report.

SARAH HAWKE: Filomina Aparia is a mother of six and runs a fruit store at one of Dili's open-air markets. Sound of Filomina Aparia speaking)

TRANSLATOR: She's not happy, because it's difficult to get money. SARAH HAWKE: Every day she scrapes just enough money together to maintain a basic lifestyle for her family. United Nations and World Bank figures show the average income has dropped since Independence in 2002 and now sits at about $US 1 a day. One of the big challenges for the Government is the birth rate, which is an average of 7.8 children per woman.

THERESA BARROS (phonetic): My name is Theresa Barros. I have 10 brothers.

SARAH HAWKE: Like many children, 11-year-old Theresa and her family are confined to a house which is about a quarter of the size of the typical Australian home, and often there's no water or electricity. Youth unemployment in Dili is also a concern; it's at 40 per cent. And while some youth groups dedicate time to music, students like Helio Roberto from the National University fear the high rate could lead to unrest.

HELIO ROBERTO: If they are not (inaudible), they're just sitting around near the road. They're just sitting and just play around, because nothing to do. If we live without any opportunity, it means that will create violence.

SARAH HAWKE: Despite these challenges the head of the World Bank in Dili, Elisabeth Huybens, feels that economic outlook for East Timor is hopeful, largely due to new revenue from the Bayu Undan petroleum reserves to the country's south. Last year the Government's budget was about $US 80 million; next year it's set to grow to $US 280 million. Money is also being put into a petroleum fund. While some commentators fear the Government lacks the skills to manage the oil and gas royalties, Ms Huybens has more confidence.

ELISABETH HUYBENS: It's important to underline that Timor Leste is one of the only post-conflict countries that has been able to maintain peace and stability for four years, and of course that's been very beneficial to the economy in general.

SARAH HAWKE: With a more than doubling of the budget, what does this mean for people on the ground? Are they benefiting from it?

ELISABETH HUYBENS: Well, hopefully they will benefit from it, and the way the budget is put together, it's certainly a budget that we would call very development oriented and very oriented towards to reducing poverty. It's focused mainly on health, on education, on roads. In all this, the Government's capacity to execute a budget is a challenge. This is a government that started from scratch in 2002. It's not easy to learn how to implement a budget well, and that is a challenge, but a challenge that the Government is working on.

TONY EASTLEY: Elisabeth Huybens from the World Bank in Dili ending Sarah Hawke's report. (ABC Radio Transcript)

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