Is Timor-Leste’s growth inclusive?

The newly independent Timor-Leste has established itself as one of the fastest growing economies in Asia and the Pacific. This study examines the first decade of the restoration of independence to assess if Timor-Leste’s economic growth has been inclusive.

The author points that the concentration of economic activity in the capital has raised the concern that the better off members of society are capturing most of the benefits. However, the paper finds that opportunity has been provided to a larger share of the population, with those on lower as well as higher living standards enjoying more opportunity.

Findings are as follows:

• in Timor-Leste, opportunity generally increased across all living standard groups, including the poorest
• it is evident that inequality in opportunity is generally in decline
• inclusive growth overall is driven by improvements in education and health care
• nevertheless, inequality is still high for some services (e.g. electricity), and access to some other services deteriorated (i.e. transport and improved sanitation)

The author deems that inclusive growth has been achieved in Timor-Leste, but he emphasises that if the growth is to remain inclusive, it will be important to maintain the upward movement in average opportunity and the decline in inequality. Therefore, there will be a need to prioritise support for the poorest Timorese and achieve improvements in the lagging sectors.

Conclusions are that:

• within Timor-Leste, development is equated with access to basic services
• minimum standards of service delivery are proposed as a safeguard for the poorest Timorese; this would reduce inequality and ultimately equalise the distribution of opportunity
• moreover, such standards would put into practice the aspiration of the Timor-Leste Strategic Development Plan 2011–2030 of sustainable, inclusive development