Accelerated Economic Growth Program

USAID's Accelerated Economic Growth Program in Timor-Leste promotes economic development and the revitalization of the private sector. A revitalized private sector will provide much-needed employment opportunities at all levels, from small farmers to entrepreneurs. USAID promotes the continued development of a business-friendly legal framework and regulatory environment, with the aim of reducing poverty and minimizing the country’s vulnerability to conflict.

Creating Jobs, Increasing Incomes

About three-quarters of Timor-Leste’s population lives in rural areas, and nearly half of these live in poverty. Unemployment is estimated at more than 20 percent. Labor costs in Timor-Leste are higher than in neighboring countries, and productivity is lower. In the coming decades, Timor-Leste will be able to exploit its petroleum resources, although the government has indicated its intention to save most of these revenues and use only a small portion in its annual expenditures.

Clearly, creating more jobs and better incomes is of paramount concern if Timor-Leste is to be a viable economy and a stable society. Towards this goal, USAID is working to help create a more business-friendly environment that promotes private sector development, trade and investment, and property rights. USAID-funded expert advisors help the government draft practicable economic development and investment policies and legislation and encourage the expansion of the financial sector.

To attract foreign investors and to help domestic investors reach suitable export markets, USAID supports the government's import-export promotion agency,TradeInvest Timor-Leste. In addition, USAID provides training in basic business management, finances, and marketing for micro-, small- and medium-sized businesses. USAID also works with lending institutions to improve services for rural borrowers.

USAID also focused on shifting economic activity from subsistence farming to more diverse, commercially-oriented, income-generating activities by producing horticultural and industrial crops, hardwood trees, and livestock husbandry to the rural poor. At the same time, USAID is helping farmers diversify their crops, focusing on those with higher values, such as vanilla, snow peas and candlenut. USAID also promotes the exchange of technology to help producers and businesses improve product quality, increase productivity and meet market demand.

Economic Growth Partners

USAID's long time implementing partners for its accelerated economic growth strategic objective are the National Cooperative Business Association and Development Alternatives, Inc. To extend the reach of its economic growth activities, USAID added two new partners in 2006 to implement projects that focus on agricultural activities. Development of Candlenut Enterprises is a project implemented by Catholic Relief Services that targets 1,836 households in the east and south of Timor-Leste. Land O’Lakes is another partner that implements a project on Agribusiness Capacity Building in Timor-Leste’s Agricultural High Schools. In addition, through the United Nations Development Programme, USAID funds expert advisors to the Timor-Leste government in vital areas, including private sector development and international investment.