Enabling Environment for Sustainable Enterprise in Timor-Leste

Michiko Miyamoto, Country Director for Indonesia and Timor-Leste and Joao Alves. Vice President of CCI-TL officially launched the EESE Report The International Labour Office together with Chamber of Commerce and Industry Timor-Leste (CCI-TL) launched the Enabling Environment for Sustainable Enterprises in Timor-Leste (EESE) Report and Policy Framework of the CCI-TL on 22 November 2017. The event was held at Hotel Timor and attended by more than 90 invitees including CCI-TL and its members, Governments, Timor-Leste Trade Union Confederation (KSTL) and development agencies.

In 2016, the ILO in collaboration with the Ministry of State, Coordinating Ministry for Economic Affairs (MECAE) and the CCI-TL conducted the EESE survey to assess the business environment in Timor-Leste. The overall objective of the intervention is to assist Government in boosting investment and private sector, and to strengthen the capacity of the CCI-TL and its member with the ability to engage in effective policy dialogue by developing a proactive national business agenda in employment creation and enterprise development.

It is critical that the government establishes interactive consultation mechanisms with all stakeholders, especially the private sector, for the effective implementation of the CCI-TL’s policy recommendations."

Joao Alves. Vice President of CCI-TL

The ILO’s EESE methodology was used to analyse political, economic, social and environmental factors in Timor-Leste based on the 17 key elements for sustainable enterprises. Six countries, namely Cambodia, Cabo Verde, Fiji, Indonesia, Rwanda and Vietnam were compared to Timor-Leste. Additionally, the EESE enterprise survey and focus group discussions were conducted with representative of key sectors in Timor-Leste, including banking and insurance, agro-industry, tourism and hospitality, oil and gas and the informal economy.

Building upon the EESE findings, CCITL developed a comprehensive and well research employers’ advocacy framework “Business Manifesto 2017 – 2022” identifying six priority areas of policy recommendations and calling for concrete actions to boost private sector growth, improving business environment, attracting private investment, creating jobs and reduce poverty in Timor Leste.
During the launching Ms Miaw Tiang Tang, ILO Senior Specialist Employer's Activities presented the finding of EESE survey, and Mr Sidonio Freitas, General Director for Natural Resource of CCI-TL presented the policy framework of CCI-TL.

It is undeniable that Timor-Leste needs a vigorous private sector to grow and diversify its economy. By putting in place policies and programs that promote private sector development, the country will maximize its opportunities to generate sustainable growth and job that contributes to poverty reduction and improved living standard for the people in Timor-Leste."

Michiko Miyamoto, Country Director of ILO Indonesia and Timor-Leste

The EESE assessment in Timor-Leste indicate that there is scope for improvement across all the pillars. The following priorities were identified as areas for future action:

1. Good governance: strengthen institutional capacity to improve transparency in public administration;
2. Entrepreneurial culture: support potential entrepreneurs through business development and mentoring programmes;
3. Access to financial services: promote access to finance, particularly for SMEs and start-ups, to ensure that entrepreneurs are better able to access credits and pay their loans;
4. Physical infrastructure: improve rural and urban infrastructure to promote private sector growth;
5. Enabling legal and regulatory environment: accelerate and simplify regulatory procedures to facilitate business development;
6. Education and lifelong learning: promote skills development in the education system to respond to employers’ needs in the labour market.

The six priority areas and CCI-TL’s policy proposals are:

1. Legal and regulatory environment: establish a clear and strong legal structure to facilitate business development
2. Good governance: improve good governance for fair business competition and protection
3. Infrastructure: enhance infrastructure accessibility and efficiency for private sector development
4. Entrepreneurship: institutionalize support for entrepreneurship to turn innovative ideas into real businesses
5. Skills development: strengthen the education system and provide improve workers’ skills
6. Access to finance: increase access to finance for all businesses and improve financial accountability in the market

“It is undeniable that Timor-Leste needs a vigorous private sector to grow and diversify its economy. By putting in place policies and programs that promote private sector development, the country will maximize its opportunities to generate sustainable growth and job that contributes to poverty reduction and improved living standard for the people in Timor Leste” said Ms Michiko Miyamoto, Country Director of ILO Indonesia and Timor-Leste in her welcoming remarks.

Mr Joao Alves. Vice President of CCI-TL expressed the challenges face by business in Timor Leste and appreciate the works of the ILO carrying out the assessment, and indicated the significant of the policy framework for CCITL. “It is critical that the government establishes interactive consultation mechanisms with all stakeholders, especially the private sector, for the effective implementation of the CCI-TL’s policy recommendations” he said in his opening remarks.

The EESE survey was funded by NZ Aid and Irish Aid under ILO - Business Opportunities and Support Services (BOSS) project.