Enabling Environment for Sustainable Enterprises in Timor-Leste

The Government of Timor-Leste is implementing the Guide for Economic Reform and Growth (GRFE) led by the Minister of State, Coordinating Minister for Economic Affairs (MECAE). The Guide aims to boost private investment, sustainable employment and economic diversification.

Background

The Strategic Development Plan describes how Timor-Leste will be transformed into an upper-middle income country with an educated, healthy and secure population by 2030. Strong, high quality non-petroleum GDP growth will be required to achieve this transformation. Achieving this growth will require the development of a strong private sector.

The Government of Timor-Leste is implementing the Guide for Economic Reform and Growth (GRFE) led by the Minister of State, Coordinating Minister for Economic Affairs (MECAE). The Guide aims to boost private investment, sustainable employment and economic diversification. Specifically, the guide is structured in a matrix format consisting of five priority economic pillars, including (1) agriculture, (2) fisheries, (3) tourism, (4) oil and gas (downstream) and (5) light manufacturing and, six reform areas, including (1) land and property regulation, (2) economic infrastructure development, (3) labor market regulation and workforce development, (4) business enabling environment, (5) private investment reform, and (6) private sector development.

The aim of the Guide is to address key constraints to growth by strengthening government and private sector roles and actions thereby driving growth in the five priority sectors of the economy.

The business enabling environment is the fourth reform area of the Guide. The aim of the measures to be implemented within the business enabling environment reform area is to introduce significant changes to the rules and practice of doing business in Timor-Leste, aimed at significantly improving current conditions with a positive impact on the nation’s ranking in the World Bank Doing Business indicators.

MECAE and CCI-TL has been working together to improve private sector involvement in the policy dialogue, and having recognised that private sector plays an important role in economic growth of Timor Leste, both MECAE and CCI-TL thus seeking ILO technical assistance and collaboration to assess the economic and business environment of Timor Leste to identify issues and strategies in economic reform aims at improving investment and private sector development.

Objectives

The EESE assessment and policy development will be carried out by a project Task Force. The taskforce will include staffs from MECAE, SERVE, Trade-Invest, IADE, CCI-TL and ILO. The primary focus of the taskforce is to supervise the whole process of the implementation steps and to build capacity of the stakeholders within the scope of the assessment.

The task force has coordinated the mapping of all existing and available secondary data on the main issues impacting on private sector growth and critical obstacles to enterprise and economic growth in the country and compared with Rwanda, Cape Verde, SriLanka, Cambodia, Indonesia and Fiji. The result of the analysis will be ready by end of April 2016. The task force plans to organize a workshop with the following objective:
  • To present the result of the secondary data on the key constrains on business to operate in Timor Leste in comparison with the other 6 countries (Indonesia, Cambodia, Vietnam, Rwanda, Cape Verde and Fiji).
  • To identify the focus areas/EESE indicators that requires further research.
  • To validate the questionnaires for the primary research.