VZCZCXRO4453
PP RUEHDT RUEHLMC
DE RUEHDT #0118/01 1211533
ZNR UUUUU
P 011533Z MAY 09
FM AMEMBASSY DILI
TO RUEHC/SECSTATE WASHDC PRIORITY
INFO RUEHC/USAID WASHDC
RUEHKH/AMEMBASSY USAID PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP PRIORITY
RHMFIUU/CDR USPACOM HONOLULU HI
RUEHBY/AMEMBASSY CANBERRA PRIORITY
RUEHWL/AMEMBASSY WELLINGTON PRIORITY
RUEHKO/AMEMBASSY TOKYO PRIORITY
RUEHLI/AMEMBASSY LISBON PRIORITY
RUEHDT/AMEMBASSY DILI

UNCLAS SECTION 01 OF 02 DILI 000118 
 
SIPDIS 
 
FOR EAP, USAID 
 
E.O. 12958: N/A 
TAGS: EAID ECON EFIN SOCI TT
SUBJECT: TIMOR-LESTE DEVELOPMENT PARTNERS MEETING 
 
¶1.   Summary:   The Government of Timor-Leste (GoTL) held its 
annual international donor development assistance meeting April 
2-4, 2009, with delegations from over 32 countries and 350 
participants attending. The Minister of Finance and  Deputy 
Prime Minister chaired the Timor Leste Development Partner's 
Meeting (TLDPM) under the banner, "Goodbye Conflict, Welcome 
Development".  Timor-Leste officials presented accomplishments 
in 2008, development priorities for 2009, and the GoTL's 
intention to enact a medium-term `Strategic Development Plan' by 
the end of 2009.  Other key issues discussed throughout the 
three day event included managing the potential impact of the 
global financial and economic crisis on Timor-Leste, the 
consequences of declining oil prices on the GoTL's Petroleum 
Fund, the primary source of  central government revenue, and the 
need to generate medium and long term strategic objectives to 
improve sector planning and donor coordination. 
 
 
 
¶2.  At the opening session, President Ramos-Horta praised USG 
development assistance as exemplary for providing over 70% of 
its resources to rural development and agriculture (indeed, the 
United States was the only country singled out for praise by the 
President),  and encouraged other donors to follow suit.  Prime 
Minister Gusmao stressed the importance of the GoTL's seven 
national priorities for 2009 -- agriculture and food security, 
rural development, human resources development, social services 
and protection, public safety and security, clean and effective 
government, and access to justice -- as its response to a recent 
assessment that poverty in Timor-Leste rose during 2001 to 2007. 
 In a bilateral meeting with the USG delegation, the Minister of 
Finance stated that the United States is viewed by the Timorese 
government as a `great achiever' among all the donors.  End 
Summary 
 
 
 
¶3.   On April 2nd, the U.S. delegation led by Ambassador Klemm 
provided a briefing on U.S. foreign assistance priorities and 
programs, and led discussions on ways to enhance mutual 
collaboration and coordination, in separate meetings with 
representatives from the World Bank (WB), the United Nations 
(UN) and the GoTL.  In the UN meeting, the discussion focused on 
ways to improve coordination and help the GoTL set development 
priorities. The U.S. delegation stressed the need for increased 
coordination of programs in the justice sector where both USAID 
and UNDP have established activities, and to link work in the 
formal justice sector with traditional Timor Leste approaches. 
The World Food Program welcomed the recent large U.S. 
contribution to their food security programs in Timor-Leste. 
There was agreement that enhanced donor coordination was needed 
in all sectors; and that the GoTL needed help in setting 
priorities among the numerous areas for development assistance 
that it has identified.  End Summary 
 
 
 
¶4.  In the WB meeting, the USG delegation's presentation of its 
development strategy led to a more detailed discussion on joint 
activities.  Ambassador Klemm recommended that a mapping 
exercise of all past and present donor assistance be generated 
so that the GoTL could be better informed on all current 
programs, especially in the justice sector but also in 
agriculture and elsewhere.  Since USAID has initiated a 
Geographic Information System program for all its activities 
throughout the country, the USG could play a leading role for 
this mapping exercise with GoTL.  The WB offered to establish a 
database and possibly a website to facilitate the sharing of 
information and reports.  The WB also mentioned that an Interim 
Strategy Note for Timor-Leste, a prelude to a more comprehensive 
Country Assistance Strategy, is due later this year. 
 
 
 
¶5.  In the bilateral meeting with select GOTL Ministers or their 
representatives, Ambassador Klemm opened the USG delegation's 
presentation by stressing that USG priorities in Timor-Leste aim 
to promote stability and economic and social development. 
Emilia Pires, Minister of Finance, led the GoTL delegation, 
along with Jose Luis Guterres, Vice-Prime Minister and 
Coordinator for Social Development.  Ambassador Klemm said the 
U.S. remains a strong friend and partner of Timor- Leste.  He 
said that the USG's foreign assistance budget of $25 million per 
year will likely remain roughly constant in the medium term. 
 
DILI 00000118  002 OF 002 
 
 
USAID Director Mark Anthony White gave a briefing on the 
Mission's programs, key results, and priorities for a new U.S. 
Country Assistance Strategy. 
 
 
 
¶6.  Minister Pires said the U.S. is viewed by the GoTL as a 
`great achiever' amongst all donors in the country.  The 
Minister thanked the USG for implementing projects in rural 
areas and for providing assistance by doing and not just 
talking.   The Minister also said that the GoTL wants to put 
their development programs on a "fast track," to take successful 
USG and other donors' programs and "replicate  them everywhere". 
 Other Ministers of the GoTL said they were pleased with U.S. 
assistance in all sectors but stressed that continued support is 
needed especially in police training, health, water/sanitation, 
and agriculture. 
 
 
 
¶7.  The Finance Minister also noted that in spite of not having 
been approved last year as an MCC Compact eligible country, the 
GOTL remains committed to the MCC program and has submitted its 
Threshold Program proposal ahead of the scheduled April 17 due 
date. 
 
 
 
 
 
¶8.  Timorese President Ramos-Horta and the Prime Minister 
Gusmao, as well as other Ministers responsible for the oversight 
of each national priority, spoke at the April 3 and 4 TLDPM 
plenary meetings. The President thanked all donor partners for 
their contributions to the development of Timor Leste and 
specifically mentioned his appreciation for USG development 
assistance, describing its focus on rural development and 
agriculture as exemplary.  He asked other donors to follow the 
U.S. example and do more in rural development, specifically to 
create conditions of peace and stability to promote development 
and investment.  He also mentioned the `obligation' that his 
government and donors have towards using assistance effectively. 
 USG assistance continues to be targeted at all of Timor-Leste's 
national priorities for 2009,  agriculture and food security, 
rural development, human resources development, social services 
and protection, public safety and security, clean and effective 
government, and access to justice. 
 
 
 
¶9.   During plenary interventions by donor delegations, most 
countries outlined their assistance programs in Timor-Leste. 
Several noted concern that the recent sharp increase in central 
government expenditures may not be sustainable given the modest 
size of the Petroleum Fund, declining oil prices, and the 
absence of any other meaningful source of government revenue. 
During the U.S. intervention, the Ambassador reinforced concerns 
with budget sustainability; encouraged greater transparency, 
especially in government procurement; stated that Timor-Leste 
has "no stronger partner" in its fight against corruption;  and 
urged rapid improvement in the legal and regulatory environment 
faced by the  private sector in Timor-Leste, notably the 
enactment of a land law.  He concluded with a note of optimism, 
linking the country's continued stability (14 months without 
major conflict) as providing hope for further social and 
economic development of Timor-Leste. 
KLEMM