ANNEX B Annex B 1 Annex B 2: Timor-Leste Selected Indicators* of Bank Portfolio Performance and Management As of Date 05/17/2005

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1 ANNEX B Annex B 1 Annex B 2: Timor-Leste Selected Indicators* of Bank Portfolio Performance and Management As of Date 05/17/2005 Indicator Portfolio Assessment Number of Projects Under Implementation a Average Implementation Period (years) b Percent of Problem Projects by Number a, c Percent of Problem Projects by Amount a, c Percent of Projects at Risk by Number a, d Percent of Projects at Risk by Amount a, d Disbursement Ratio (%) e Portfolio Management CPPR during the year (yes/no) Supervision Resources (total US$) Average Supervision (US$/project) Memorandum Item Since FY 80 Last Five FYs Proj Eval by OED by Number 4 4 Proj Eval by OED by Amt (US$ millions) % of OED Projects Rated U or HU by Number % of OED Projects Rated U or HU by Amt a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP). d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year.

2 70 Annex B 3.1 Annex B 3.1: Proposed IBRD/IDA Base-Case Program As of Date 5/17/2005 Fiscal year Proj ID US$(M) 2005 EC-Funded Health Program 8.0 Result Consolidation Support Program I 1.0 ED-Funded Agriculture Program 12.0 Planning & Financial Management Capacity Building Program 12.0 Result Education for All Fast Track Initiative 10.0 Energy Service Delivery 5.0 Consolidation Support Program II 1.0 Result Consolidation Support Program III 1.0 GEF & BCF Natural Resource Mgt. Result GEF & CDCF Energy Result 0.0 Overall Result 50.0 Strategic Rewards b (H/M/L) Implementation b Risks (H/M/L)

3 71 Annex B 3.2 Annex B 3.2: Timor-Leste - IFC and MIGA Program FY IFC approvals (US$m) Sector (%) Investment instrument(%) MIGA guarantees (US$m) Annex B 3

4 72 Annex B 4 Annex B 4: Timor-Leste - Summary of Nonlending Services As of 05/15/2005 Product Completion FY Audience a Objective b Recent Completions Policy Notes 2001 G, D, B KG, PS TA: Anti-Corruption Initiatives 2001 G, D, B, P KG, PB, PS TA: Central Fiscal Authority Computerization 2001 G, D, B, P KG, PB, PS TA: Leadership and Capacity Building 2001 G, D, B, P KG, PB, PS TA: Social Dialogue 2001 G, D, B, P KG, PB, PS Country Economic Memorandum 2002 G, D, B, P KG, PB, PS Public Expenditure Management & Accountability Note 2002 G, D, B, P KG, PB, PS Strategy for Housing 2002 G, D, B, P KG, PB, PS TA: FALINTIL Reinsertion Assistance 2002 G, D, B, P KG, PB, PS TA: Gender Networking and Local Governance 2002 G, D, B, P KG, PB, PS TA: Poverty Monitoring 2002 G, D, B, P KG, PB, PS Country Procurement Assessment Review 2003 G, D, B, P KG, PB, PS Education Sector Study 2003 G, D, B, P KG, PB, PS Poverty Assessment G, D, B, P KG, PB, PS TA: GDLN Training Needs Assessment 2003 G, D, B, P KG, PB, PS Public Expenditure Review 2004 G, D, B, P KG, PB, PS IDF: Supporting Transition to Admin. Independence 2004 G, D, B, P KG, PB, PS TA: Civil Society Capacity Building 2004 G, D, B, P KG, PB, PS TA: Energy Sector Review 2004 G, D, B, P KG, PB, PS TA: Registration of Armed Veterans 2004 G, D, B, P KG, PB, PS Transport Sector Review 2005 G, D, B, P KG, PB, PS Ongoing Strengthening the Institutions of Governance 2004 G, D, B, P KG, PB, PS Defining a Policy for Veterans 2005 G, D, B, P KG, PB, PS TA: Administrative Capacity Building 2005 G, D, B, P KG, PB, PS TA: Budget Planning Exercise 2005 G, D, B, P KG, PB, PS TA: Household Survey 2005 G, D, B, P KG, PB, PS TA: Youth Leadership for Economic 2005 G, D, B, P KG, PB, PS Health Sector Review 2006 G, D, B, P KG, PB, PS Private and Financial Sector Assessment 2006 G, D, B, P KG, PB, PS Labor Market Study 2006 G, D, B, P KG, PB, PS IDF: Strengthening Capacity for Poverty Analysis 2006 G, D, B, P KG, PB, PS IDF: Strengthening Public Expenditure Management 2006 G, D, B, P KG, PB, PS TA: Registration of Civilian Veterans 2006 G, D, B, P KG, PB, PS Poverty Assessment G, D, B, P KG, PB, PS IDF: Institution Building of the Inspector General 2006 G, D, B, P KG, PB, PS IDF: Institutional of the Ombudsman 2006 G, D, B, P KG, PB, PS TA: Supervision of ESMAP Rural Power Mapping 2006 G, D, B, P KG, PB, PS TA: Supervision of PPIAF Review of Power Sector 2006 G, D, B, P KG, PB, PS IDF: Institution Building for Veterans Policy 2007 G, D, B, P KG, PB, PS IDF: Public Expenditure Management and Procurement 2007 G, D, B, P KG, PB, PS Planned Budget and Expenditure Analysis G, D, B, P KG, PB, PS Doing Business in Timor-Leste G, D, B, P KG, PB, PS Household Fuel Study 2006 G, D, B, P KG, PB, PS Policy Note on Population Growth 2007 G, D, B, P KG, PB, PS Youth: Challenges and Options 2006 G, D, B, P KG, PB, PS TA: Governance 2006 G, D, B, P KG, PB, PS Rural Growth Strategy 2007 G, D, B, P KG, PB, PS TA: FIRST Credit and Collateral Registry 2007 G, D, B, P KG, PB, PS TA: PPIAF Phase II Power Regulatory Framework 2007 G, D, B, P KG, PB, PS Service Delivery for the Poor 2008 G, D, B, P KG, PB, PS IDF: Strengthening Capacity for Poverty Monitoring 2008 G, D, B, P KG, PB, PS TA: Business Environment 2008 G, D, B, P KG, PB, PS a. Government (G), Donor (D), Bank (B), Public Dissemination (PD). b. Knowledge generation (KG), public debate (PB), problem-solving (PS).

5 73 Annex B 5 Annex B 5: Timor-Leste Social Indicators Latest single year Same region/income group East Asia & Low Pacific income POPULATION Total population, mid-year (millions) , ,311.9 Growth rate (% annual average for period) Urban population (% of population) Total fertility rate (births per woman) POVERTY (% of population) headcount index Urban headcount index Rural headcount index INCOME GNI per capita (US$) , Consumer price index (1995=100) Food price index (1995=100) INCOME/CONSUMPTION DISTRIBUTION Gini index Lowest quintile (% of income or consumption) Highest quintile (% of income or consumption) SOCIAL INDICATORS Public expenditure Health (% of GDP) Education (% of GDP) Social security and welfare (% of GDP) Net primary school enrollment rate (% of age group) Total Male Female Access to an improved water source (% of population) Total Urban Rural Immunization rate (% of children ages months) Measles DPT Child malnutrition (% under 5 years) Life expectancy at birth (years) Total Male Female Mortality Infant (per 1,000 live births) Under 5 (per 1,000 live births) Adult (15-59) Male (per 1,000 population) Female (per 1,000 population) Maternal (modeled, per 100,000 live births) Births attended by skilled health staff (%) Note: 0 or 0.0 means zero or less than half the unit shown. Net enrollment rate: break in series between 1997 and 1998 due to change from ISCED76 to ISCED97. Immunization: refers to children ages months who received vaccinations before one year of age. World Indicators database March 2005, World Bank

6 74 Annex B 6.1 Annex B 6.1: Timor-Leste Key Economic Indicators As of date 03/08/2004 Actual Est. Projected Indicator accounts (as % GDP at current market prices) Gross domestic product Agriculture Industry Services Total Consumption Gross domestic fixed investment a/ Government investment b/ Private investment c/ (includes increase in stocks) Exports (Goods) d/ Imports (Goods) e/ Gross domestic savings Gross national savings Memorandum items Gross domestic product (US$ million at current prices) Gross national product per capita (US$, Atlas method) Real annual growth rates (%, calculated from 2000 prices) Gross domestic product at market prices Gross Domestic Income Real annual per capita growth rates (%, calculated from 2000 prices) Gross domestic product at market prices Total consumption Private consumption (Continued)

7 75 Annex B 6.1 Key Economic Indicators (Continued) Actual Est. Projected Indicator Balance of Payments (US$m) Exports (GNFS) Merchandise FOB Imports (GNFS) Merchandise FOB Resource balance Net foreign income f/ Net current transfers g/ (including official current transfers) Current account balance h/ (before official capital grants) Current account balance (after official capital grants) Financial accounts Long-term loans (net) Official Private Other capital (net, including errors and omissions) Change in foreign assets Memorandum items Resource balance (% of GDP at current market prices) Real annual growth rates ( 1995 prices) Merchandise exports (FOB) Primary Manufactures Merchandise imports (CIF) Public finance (as % of GDP at current market prices) i/ Current revenues j/ Current expenditures (Continued)

8 76 Annex B 6.1 Key Economic Indicators (Continued) Actual Estimate Projected Indicator Current account surplus (+) or deficit (-) Capital expenditure Foreign financing k/ Monetary indicators M2/GDP (at current market prices) l/ Growth of M2 (%) Credit/Deposits Deposits/GDP Price indices( 1995 =100) Merchandise export price index Merchandise import price index Merchandise terms of trade index Real exchange rate (US$/LCU)f Real interest rates Consumer price index (% growth rate) GDP deflator (% growth rate) a. Excludes investment in the oil/gas sector. b. Capital expenditures in the central government budget, the Consolidated Fund for East Timor (CFET) c. Gross investment minus government capital expenditures d. Merchandise exports. Excludes oil/gas revenues, which are recorded under the income account (royalties) and transfers (tax revenues). e. CMerchandise imports. Includes international-assistance related import of goods. f. Includes oil/gas royalty and interest g. Includes oil/gas tax revenues and international assistance h. Includes international assistance i. Consolidated Fund for East Timor (CFET); on basis of fiscal year (June - July). j. Consists of domestic revenues, oil/gas revenues, and foreign grants. k. Foreign grants are treated as revenues in the CFET l. Broad money (end-of-period). Excludes currency holdings by the public, on which no data are available. f. LCU denotes local currency units. An increase in US$/LCU denotes appreciation.

9 77 Annex B 6.2 Annex B 6.2: Timor-Leste Country Selected Indicators Table Base-case (most likely) projection Actual Est. Projected Part A: Main Macro Aggregates Annual growth rates, calculated from constant 2000 price data GDP (mp) per capita Total consumption per capita GDP at market prices Total consumption Private consumption Gross domestic investment (GDI) Gross dom. Fixed investment (GDFI) Exports (GNFS) of which Goods Imports (GNFS) of which Goods Savings-investment balances, as percentage of GDP Gross Domestic investment of which Government investment (capital Foreign savings Gross national savings Government savings Non government savings Gross domestic savings Other GDP inflation Annual average exchange rate (LCU/US$) Index real average exchange rate ( =100) Terms of trade index ( =100) Incremental capital-output ratio (GDI based Import elasticity with respect to GDP Money growth Part B: Government Finance Indicators Percentage of GDP Total revenues, of which Domestic revenues Oil/gas revenues Total expenditures, of which Recurrent expenditure Deficit(-)/Surplus(+) (by FY)

10 78 Annex B 6.2 Country Selected Indicators Table (Continued) Actual Est. Projected Financing (Central Govt Budget, by FY): Foreign (grants reported as revenues) Monetary sector Other domestic Other Total Debt/GDPmp Total interest payments/tax revenues Part C: Debt & Liquidity Indicators Total DOD and TDS DOD (US$ millions) DOD / GDPmp ratio TDS (US$ millions) TDS / exports (XGS) ratio Gross foreign assets Part D: External Financing Plan (US$, millions) International assistance (current transfers Official capital grants Financial accounts (net) Net Long term borrowing excl IMF Adjustments to scheduled debt service All other capital flows Financing Requirements (incl IMF) of which current account deficit (before international assistance) Annex B 6

11 79 Annex B 7 Annex B 7: Timor-Leste Key Exposure Indicators As of Date 03/08/2004 Actual Est. Projected Indicator Total debt outstanding and disbursed (TDO) (US$m) a Net disbursements (US$m) a Total debt service (TDS) (US$m) a Debt and debt service indicators (%) TDO/XGS b TDO/GDP TDS/XGS Concessional/TDO IBRD exposure indicators (%) IBRD DS/public DS Preferred creditor DS/public DS (%) c IBRD DS/XGS IBRD TDO (US$m) d Of which present value of guarantees (US$m) Share of IBRD portfolio (%) IDA TDO (US$m) d IFC (US$m) Loans Equity and quasi-equity / c MIGA MIGA guarantees (US$m) a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net shortterm capital. b. XGS denotes exports of goods and services, including workers remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the Bank for International Settlements. d. Includes present value of guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments.

12 Annex B 8: Timor-Leste Operations Portfolio (IBRD/IDA and Grants) As of Date 05/17/2005 Closed Projects 12 IBRD/IDA * Total Disbursed (Active) of which has been repaid 0.00 Total Disbursed (Closed) 9.39 of which has been repaid 0.00 Total Disbursed (Active + Closed) 9,390, of which has been repaid 0.00 Total Undisbursed (Active) Total Undisbursed (Closed) 0.00 Total Undisbursed (Active + Closed) 0.00 Active Projects Difference Between Last PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements a/ Project ID Project Name Status of Bank Group Operations (B8) Developm ent Objectives Implement ation Progress Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Rev'd 80 Port Stat Country Approval FY Proj ID (SPN) Active Democratic Republic of Timor-Leste Proj ID (SPN) Latest Latest Approval DO IP FY IBRD IDA Grants Cancel. Undisb. Orig. Frm Rev'd P Second Agriculture Rehabilitation Proj. S S P TP-2ND HEALTH SECTOR REHAB S S P TP-Economic Institutions for Capacity Bl S S P TP-FUNDAMENTAL SCHOOL QUALITY PROJECT S S P TP-POWER SECTOR PRIORITY INVESTMENTS S S P TP-Second Timor-Leste Petroleum Project HS S P TP-Small Enterprises Project II S S P TP-Third Agric.Rehabilitation Proj. S S P TP-HEALTH SECTOR REHAB S S P TP-Third Transition Support Overall Result Annex B 8

13 : Timor-Leste: FY CAS Results Matrix Country-Level Objectives Plan Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones hips PILLAR I: DELIVERING SUSTAINABLE SERVICES Reduce the number of illiterate people within the adult population, with an emphasis on women (NDP p. 167) Universal primary school enrollment by 2015 (MDG #2) 100% literacy among year olds, equally among females and males, by 2015 (MDG #2, 3) Absence of sector policy Limited management and implementation capacity Low budget execution Lack of shared vision between Government and partners Rapidly increasing population Increased access to and improved efficiency and quality of basic education* Net enrolment rate for both girls and boys in grade one at least 85% 95% of grade one girls and boys continue to grade two 17 Outcomes marked with an asterisk (*) represent areas in which the Bank will focus its interventions. Sector strategies developed and reflective of national policy Management tasks executed on time according to sector strategies and budgets All priority posts filled and 80% of non-priority posts filled Non-salary budget planning realistic and at least 90% budget execution Primary school curriculum fully disseminated Increased access to appropriate learning materials Teacher training programs consolidated Primary school fees eliminated EFA/FTI IDA Grant FSQP (TFET) AAA (Making Services Work for the Poor) AAA (Youth: Challenges and Options) Brazil DCI New Zealand Portugal UNESCO UNICEF WFP 81

14 Country-Level Objectives Plan Improve the health and nutritional status of the people of Timor-Leste (NDP p. 20) Under-five mortality rate reduced by two-thirds from 1990 level, to 96 per 1,000 children (MDG #4) Maternal mortality rate reduced by threequarters from 1990 level, to 252 per 100,000 live births (MDG #4) Meet the needs for electricity throughout Timor- Leste, thus Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones Donor pressure to expand priorities leading to difficulty of sustaining focus on priority programs Constrained demand for public health services due to culture, gender, etc. Inadequate quality and responsiveness to clients by service providers Rapidly increasing population and extremely high fertility rates Potentially fragile Government commitment to results focus Low overall electrification rate (21%) and very low (5%) rural Improved access to and quality of primary health services* Measles and DPT3 vaccination coverage increased from 45% to 55% Skilled attendance at birth increased from 28% to 40% Annual outpatient visits per capita increased from 2 to 2.5 Targeted health promotion programs implemented, particularly for youth on HIV/AIDS, STDs and communicable diseases, reproductive health, and road safety/accident prevention Improved efficiency of power supply and collection efficiency in national capital to School feeding programs launched District and hospital plans developed annually and monitored quarterly, consistent with Health Sector Policy Framework District and hospital budgets developed annually as instruments to implement district and hospital plans Key indicators of district and national health sector performance monitored and discussed regularly System for collecting and measuring health indicators improved Monitoring and evaluation of health worker behavior strengthened Health promotion programs designed and initiated Contract for fuel imports awarded Installation of 6.8 MW of more efficient power AAA (Health Sector Review) AAA (Making Services Work for the Poor) AAA (Youth: Challenges and Options) HRSDP (TFET/EC) EC-funded health program ESDP Gas Seep Harvesting hips AusAID Cuba EC UNFPA UNICEF USAID WFP WHO ADB Japan JICA Norad 82

15 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones supporting economic productivity and quality of life for all citizens (NDP p. 284) electrification rate Absence of clear policy and strategy for nation-wide electrification Lack of legal, regulatory and institutional framework High fuel prices High distribution losses Low collections Weak institutional capacity in EDTL Incomplete rehabilitation of district town power systems allow greater spending on district power services* Reduced fuel costs in comparison to regional benchmark Singapore FOB Overall efficiency of Dili generation, distribution, and collections improved, as measured by increased collections per liter of fuel from 30 to 45 EDTL institutional capacity strengthened generation capacity in Dili Urgent distribution rehabilitation measures completed Distribution loss reduction study completed and program launched Prepayment meter program completed Plan for full, timely payment of Government dues prepared and agreed Program (TFET) PSPIP (TFET) EICBP ESMAP PPIAF CDCF GEF PHRD AAA (Rural Growth Strategy) hips 83 Enhanced availability of reliable, affordable power in the districts to support social and economic development* Reliable power restored to currently connected customers in districts Measures to restore power services to subdistricts and expand Recommendations on institutional framework for electrification adopted by Government electrification planning study, including alternative energy resource analysis, completed

16 Country-Level Objectives Expected contribution of the CAS to Plan Major challenges CAS Outcomes 17 Milestones rural access under implementation Provide roads and Lack of plans and bridges for the planning capability movement of people Inadequate and goods, orderly maintenance of existing and efficient road network functioning of Weak institutional markets, and capacity sustainable Weak local contractor development (NDP capability and p. 37) contractual arrangements Provide adequate, safe, and sustainable water supply, with the aim of full cost recovery in urban centers and through communitymanaged facilities in rural areas (NDP p. 275) Lack of access to safe drinking water both in Dili and in urban areas Lack of legal, regulatory, and institutional framework Weak institutional capacity in WSS/SAS Improved availability of efficient, cost effective, and financially sustainable transport infrastructure to increase connectivity and thus support social and economic development 360 km of roads and bridges rehabilitated and maintained to satisfactory levels Transport costs (vehicle operating costs plus travel time) on main roads reduced by 15% Improved water supply for residents and businesses in urban and rural areas 40% of Dili residents and businesses connected to 24-hour safe water and 35% of small towns and villages with access to Road improvement strategy and investment program adopted by Government Capacity building program designed and underway Simplified conditions for local contracts developed Measures to improve performance of domestic contracting industry adopted Equipment leasing company established WSS/SAS corporatization road map and regulatory policy endorsed and financed Regulatory framework and credible regulator in place WSS/SAS reconstituted as a public corporation WSS/SAS a full EC-funded agriculture program AAA (Rural Growth Strategy) AAA (Rural Growth Strategy) hips ADB EC Japan ADB AusAID JICA Portugal 84

17 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones 80% of urban clean water population with access to safe piped water (NDP p. 281) 80% of rural population with access to safe local water supply (NDP p. 281) Extend support to the veterans of the Resistance (NDP p. 115) High expectations regarding recognition of veterans in accordance with Constitution Recognition of veterans of the resistance on the basis of national consultations* Veterans recognized in accordance with law policy on assistance to veterans followed by Government, NGOs, and donors participant in IBNET, measuring and reporting regularly on core performance benchmarks Comprehensive capacity building program on providing efficient countrywide WSS services implemented Veterans law completed Veterans database completed and transferred to Veterans Directorate policy on assistance to veterans adopted PCF IDF hips AusAID DCI UK UNDP 85 PILLAR II: CREATING PRODUCTIVE EMPLOYMENT Generate new employment (NDP p. 230) Income per capita increased to $600 (in Poor capacity for implementing capital expenditures Slow budget execution, particularly Jobs created directly through budget implementation and overseas employment programs* Study on improving capital development budget execution completed Capital development PFMCBP IDF DCI UNDP

18 Country-Level Objectives Plan 2002 USD) (NDP p. 228) Promote private initiatives, innovation, and investments by creating enabling and supportive environments (NDP p. 20) Number of foreign investment operations increased to 2,000 (NDP p. 228) Value of non-oil and gas exports to grow ten-fold from 2001 export levels (NDP p. 228) Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones for capital development spending Inadequate monitoring of job creation through budget implementation Difficulties negotiating employment agreements with overseas governments Major gaps and delays in creating the legal and the regulatory framework for business activity Many bureaucratic impediments to doing business and increasing reports of corruption in the civil service Lack of information on business constraints or methods to improve awareness Lack of entrepreneurial and technical skills Lack of an Increased private sector employment through improved budget implementation, with an emphasis on labor-intensive programs 3,000 jobs created overseas for Timorese workers with adequate representation of women and youth Improved private sector enabling environment, resulting in increased trade, investment, and jobs* Laws on investment, leasing, credit and collateral approved Business registration procedures streamlined Improved performance against Doing Business indicators 1,000 new jobs created through non- budget execution steadily improving Light labor survey implemented Labor-intensive programs designed and implemented Emigrant workers program operational in South Korea and agreements with additional host countries underway Investment and Export Promotion Agency (IEPA) and Domestic Investment Promotion Agency created and fully operational Foreign and domestic investment information and management system in place Investment promotion campaigns undertaken in key niche areas Extended program of entrepreneurial and technical training for current and prospective entrepreneurs through SEP II (TFET) AAA (Private and Financial Sector Review) AAA (Doing Business in Timor-Leste) IFC/PEDF FIAS hips IMF Portugal USAID 86

19 Country-Level Objectives Plan Ensure that banking, credit and microfinance services are available to all, including the poor and women (NDP p. 31) Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones institutional focal point to promote and facilitate foreign and domestic investment Insecure land and property rights Inadequate credit availability for small businesses, especially in rural areas and for women Poor information on credit worthiness and collateral petroleum private investment (measured on a gross basis) Increased number of entrepreneurial jobs, especially for women and youth Greater consultation between Government and private sector USD 10 million in new Foreign Direct Investment USD 10 million increase in nonpetroleum exports Improved access to credit for private investment and working capital* Increased number of microfinance institutions, in both rural and urban areas Increased coverage by commercial banks in both rural and urban areas Increased lending for private investment and working capital Business Centers, private organizations, and secondary and tertiary level institutions, with significant participation of women and youth Business Forums and Public-Private Sector Working Group meetings held regularly Credit and collateral registry created Public awareness campaigns on credit mechanisms conducted, with emphasis on reaching women and youth Training programs for bankers and microlending institutions conducted SEP II FIRST IDF AAA (Private and Financial Sector Review) IFC/PEDF hips ADB USAID 87

20 Country-Level Objectives Plan Provide more certain land and property rights for development of commercial enterprise and agriculture (NDP pp. 177, 226) Land reform and titling program instituted (NDP p. 235) Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones Insecure land and property rights Inadequate legal and regulatory framework and systems Increased access to credit for women and youth Strengthened ownership rights through improved policies and systems for land titling and sale of state-owned property Functioning market in land and property Land and property being used as collateral for finance Land registration pilot implemented and report completed Approval and implementation of land and property legal framework Policy and proposal on administration and sale of state-owned property agreed Titling system in place hips USAID 88 Manage agriculture, fisheries, and forestry resources in a way that supports sustainable production (NDP p. 174) New protected areas through improved resources management and development (NDP p. 176) Lack of sector information Lack of policy framework Slow legislative process Enhanced sustainable resource management* Legal and regulatory framework and systems in place for sustainable development of agriculture, forestry, and fisheries Monitoring and control system functioning and licensed boats in operation Forestry Policy and Strategy drafted Forest inventory started Protected areas identified Baseline statistics collection system agreed upon and selected baseline information available Adequate fisheries licensing system designed and systems for monitoring and control of fisheries licenses ARP (TFET) EC-funded agriculture program ACIAR AusAID EU FAO GTZ JICA USAID and International NGOs

21 Country-Level Objectives Plan Achieve food security, improve food self-sufficiency, and diversify agricultural production (NDP pp. 174) 50% reduction in the number of months with insufficient food supply among rural households (NDP p. 181) Release of new food crop varieties (NDP p. 181) Facilitate agroindustrial development leading to increased processing and value-adding incountry (NDP p. 174, 241) Higher incomes Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones Lack of access among farmers to high-quality inputs, technical advice, and credit Poor rural infrastructure Inadequate legal framework for investment Insecurity of land tenure and property rights Limited capacity among farmers to adopt new production Building blocks for improved food security and food production in place* Coordinated national system established for seed/tuber testing, multiplication and distribution Timely reporting and monitoring of food security Agricultural extension model piloted, with increased information to farmers, particularly women Enhanced businessoriented production of agricultural products* Increased production and earnings from agriculture cash products, including high value, organic, and alternative products identified Food security strategy drafted Baseline statistics collection system agreed upon and selected baseline information available protocols for food crop, seed and tuber testing, multiplication and distribution agreed upon Measures for effective regionalization launched, including steps for improved agricultural extension services MAFF guidelines for working with communities developed, with special emphasis on women Market studies and feasibility analysis (value chain analysis) completed and implementation of recommendations underway Coordination mechanisms between MAFF and IEPA ARP (TFET) EC-funded agriculture program AAA (Rural Growth Strategy) ARP (TFET) EC-funded agriculture program AAA (Rural Growth Strategy) AAA (Youth: hips AusAID EU JICA WFP and International NGOs EU GTZ Portugal USAID and International NGOs 89

22 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones and employment among farmers (NDP p. 176) technologies Lack of available information on agribusiness and trade opportunities Poor rural infrastructure established to ensure sharing of information on agribusiness options and potential markets and investors Challenges and Options) IFC/PEDF hips PILLAR III: STRENGTHENING GOVERNANCE Promote good governance through popular participation and responsible and responsive government (NDP p. 123) Corruption Weak institutions Difficulty of ensuring country coverage by the Office of the Provedor Lack of capacity in key institutions, including Provedor, Court of Appeals, media, and civil society Absence of legal protection for civil society and media Absence of culture of openness Lack of trust in probity of State institutions Lack of clarity on standards of behavior in high office Lack of anticorruption Safeguards against corruption and abuse of power in place, with increased awareness of citizens rights* Provedor functioning credibly in education, prevention, and investigation of corruption Adoption and implementation of Leadership Code by Presidency, Judiciary, Parliament and Executive Higher-quality, independent scrutiny by Parliament, Court of Appeals, media, and Provedor equipped, staffed, and operational Adequate provisions for combating corruption included in the Penal Code Options study on integrity instruments completed, including disclosure system for high officials and civil servants in high-risk areas Progress toward transferring audit of Government accounts to Court of Appeals Parliament, media, and civil society supported in conducting independent scrutiny, including training PFMCBP IDF Pacific Facility I AusAID DCI DFID/UK UNDP USAID hip for Transparency Internews HAK JSMP Fokupers Lao Hamutuk Labeh Youth Against Corruption 90

23 Country-Level Objectives Plan Effectively manage oil and gas revenues and savings to benefit present and future generations (NDP p. 21) Develop and administer effective, accessible, and impartial system of justice which is prompt, transparent, and in conformity with the Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones instruments civil society Policy on information dissemination and access established, including monthly press bulletins in both national languages Weak human resource capacity Corruption Populist pressure and difficulty of managing expectations Minimally functional justice system Weak systems and processes Corruption Transparency and probity in managing petroleum revenues* Petroleum revenue collection, savings policy, and petroleum fund functioning credibly Improved access to justice, with enhanced quality and efficiency Prosecution and courts providing more timely access to justice for both women and men Regular audits of petroleum company payments and petroleum fund receipts Information on petroleum fund receipts and withdrawals made publicly available regularly in accessible form Consultative Council and Investment Advisory Board operational Capacity building program in place for petroleum related agencies, Parliament, media, and civil society Prosecution backlog reduced Superior Council for Public Prosecution and Superior Council for Judiciary staffed Measures to prioritize serious cases of gender- PFMCBP PTAP II (TFET) DGF EITI IDF hips AusAID DCI DFID IMF Norad AusAID Brazil DCI Portugal UK UNDP UNICEF UNOTIL 91

24 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones cultural heritage of Timor-Leste (NDP p. 21) Create a lean, effective, efficient, accountable, and transparent civil service (NDP p. 21) Absence of spirit of public service Uneven leadership and weak management Weak accountability Uneven political will Superior Council for the Public Prosecution and Superior Council for the Judiciary carrying out disciplinary functions Greater community engagement by the Police (PNTL) and improved responsiveness to the needs of women Increased proportion of complaints against police independently investigated Enhanced motivation and responsibility among civil servants, resulting in higher standards of probity and service delivery* Career development and pay structure introduced Office of the Inspector General based violence adopted, including training for court actors Mediation mechanisms formalized and recognized Police community awareness programs and community consultation mechanisms in place PNTL gender analysis completed and related interventions and monitoring system designed Law on police discipline promulgated and broad consultations on independent review commission held Clear responsibilities and reporting arrangements established Transparent and impartial recruitment and promotion standards introduced Disciplinary manual disseminated and workshops held across State entities PFMCBP SEP II (TFET) AAA (Health Sector Review) hips USAID ASF HAK JSMP AusAID DCI DFID Norad UNDP 92

25 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones (OIG) reinforces integrity and accountability through inspections and investigations, with recommendations implemented and reports published Ensure comprehensive, participatory planning with effective monitoring and evaluation and relevant, welldrafted, timely legislation (NDP pp. 54, 108) Weak institutions and priority-setting Lack of information and consultation on some key laws Insufficient availability of data for effective monitoring and evaluation Sound policy and legislative process across Government* Progress in following policy and legislative process by all entities, including availability of draft laws, appropriate consultations, and coherent legislative timetable Strengthened capacity to manage for and monitor results on the ground, with particular attention to women and youth* Improved monitoring and evaluation leading to higher quality policy decisions and clearer priorities Capacity of the Policy for career development and pay drafted Gender training for civil servants conducted OIG organic law adopted and website operational Policy and legislative process developed and associated manual, workshops and training delivered for relevant ministries Health sector approach to identifying and monitoring indicators adopted in additional ministries Participatory Poverty Assessment and Living Standards Measurement Survey completed Inter-ministerial PFMCBP IDF Pacific Facility AAA (Poverty Assessment) AAA (Making Services Work for the Poor) hips ADB AusAID UNDP UNICEF WFP 93

26 Expected contribution of the CAS to Country-Level Objectives Plan Major challenges CAS Outcomes 17 Milestones Statistics coordination of poverty Directorate enhanced in monitoring enhanced conducting and analyzing a household survey program Poverty assessment results incorporated into preparation of future strategies Ensure effective, transparent and corruption-free management of the economy and public finances (NDP pp. 22) Corruption Weak management and accountability for public finance Improved implementation of budget in a transparent manner, in line with savings policy and sustainable growth and poverty reduction goals* Improved financial management with critical financial management staff in place in MPF and line agencies Reduced unspent appropriations Combined Sources Budget and budget execution reports published in an accessible form including medium-term Budget defined and executed with particular focus on social, agricultural, and infrastructure services to the poor in rural areas Delegation of expenditure and procurement approvals to line ministries enhanced Block grants program piloted in three districts Comprehensive and timely quarterly and annual reporting to Parliament, including audit and Management Letter, and dissemination to district staff Improved availability of data on donor disbursements and PFMCBP AAA (Public Expenditure Management and Budget Execution) hips AusAID DCI DFID IMF Norad UNCDF UNICEF UNDP NGOs 94

27 Country-Level Objectives Plan Expected contribution of the CAS to Major challenges CAS Outcomes 17 Milestones donor commitments commitments hips Enhanced revenue performance through streamlined procedures and mechanisms * Customs clearance times reduced for lowrisk shipments Improved revenue collection, including from petroleum Automated Customs management information system in place Sufficient qualified staff recruited to revenue agencies and Mineral Resources Directorate 95