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Activism and Aid

Chapter Three


Timor-Leste began its nation-rebuilding at a time when development ideologies had shifted from a twentieth-century focus on economic interventions to recognition of the importance of social issues in development, particularly issues of democracy, participation and good governance. Development theory moved away from technical strategies towards greater emphasis on people-led development and building a sense of citizenship.

When the Democratic Republic of Timor-Leste (RDTL) officially took over the reins of government from UNTAET in 2002, many of the structures and processes of governance had already been set in place by the UN. The first RDTL government nevertheless had a huge task to establish ‘Pillars of the State’ for a liberal democratic government (the Parliament, the Presidency and the Judiciary) and the national administration. This chapter shows how the UN and the World Bank had a primary role in policy making in East Timor after the departure of the Indonesian administration regarding both the national economy and governance processes.

International Development Institutions

In 1999 Sergio de Mello, UN Transitional Administrator for East Timor, reported at the Donors’ Meeting in that year that institutions in East Timor had to ‘start from scratch’. The Joint Assessment Mission (JAM) established by the World Bank had developed a blueprint policy for the nation based on this position. The JAM consultants witnessed the devastation of infrastructure and the dearth of people and came to the hasty conclusion that development, including local governance structures, would need to be wholly developed (Patrick 2001:57). At the Donors’ Meeting, a Consolidated Fund for East Timor (CFET) was created to fund the administration of East Timor by the United Nations from 1999 through multilateral and bi-lateral1 aid contributions.

Beyond the UNTAET period a Trust Fund for East Timor (TFET) was set up under the management of the World Bank and the Asian Development Bank (ADB)2 to mobilise international bi-lateral and multi-lateral donor development contributions for reconstruction and development activities in health, education, agriculture, transport, power, and other key sectors (World Bank and ADB 2005; Rosser 2007). This gave these two institutions considerable leverage in the country.

Their influence, however, was not entirely welcome by the new government. The World Bank and other agencies encouraged the new government of Timor-Leste to borrow money in order to invest in coffee, vanilla or palm oil production for export (Moxham 2004). The first Prime Minister, Mari Alkatiri, who lived in Mozambique during the occupation, was totally opposed to financing development through foreign assistance loans because RDTL did not want to become indebted and wished to avoid the ‘debt trap’ (Molnar 2010:117). The Timorese government sought to limit the financial influence of the World Bank and was unwilling to make loan arrangements that would provide the Bank with leverage over economic policy.

While key leaders of the first Timorese government were in Mozambique, the external headquarters of FRETILIN’s Central Committee, during the Indonesian occupation (Scott 2005), they experienced the powerful influences of the international finance institutions (IFIs). Mozambique, which like Timor-Leste became independent in 1975 as a result of the change of government in Portugal, was forced to adopt economic restructuring in exchange for development finance. Some members of FRELIMO had adopted a Marxist-Leninist ideology during its independence struggle against Portuguese colonialism. When FRELIMO came into power at independence, the country was shunned by Western nations. Rhodesia, and later South Africa, created and backed a militia army, RENAMO,3 to destabilise the fledgling government, destroy national infrastructure and terrorise the population, (Hanlon 1986:140). A decade and a half of war brought Mozambique to economic collapse. The FRELIMO government was forced to negotiate with the IMF and World Bank and accepted an IMF financial package in 1987 in return for adopting free market and social democratic policies. Mozambique became one of the world’s highly aid dependent and indebted countries, a status that Timor-Leste’s political leaders were, upon assuming power, anxious to avoid.

The two key IFIs, the International Bank for Reconstruction and Development (known as the World Bank) and the International Monetary Fund (IMF) were formed at a conference in Bretton Woods in 1944 to plan and finance the rebuilding of Europe after the Second World War. This was the end of the colonial era, heralding a new approach to the first world– third world relationships. Development aid was established as a means of funding infrastructural support in newly independent countries. In this era, ‘development’ was perceived as a linear process of stages of development from pre-capitalist to fully fledged capitalist economies through transfer of Western technology, knowledge and capital. The ideas were encapsulated in the ‘Stages of economic growth’ theory of the 1960s, which held that a transfer of capital and skills to underdeveloped countries would improve people’s livelihoods and standards of living as a by-product and consequence of ‘modernisation’ (Remenyi 2004:25). This view was challenged by Latin American economists who believed that developed countries had advanced economically through the extraction of cheap resources from their colonies, elaborated in their ‘Dependency Theory’ (McKay 2004:54). Underdevelopment was a process, not simply a condition, they claimed, and the wealth of the ‘first world’ or ‘developed’ countries was the result of the exploitation of ‘third world’ or ‘developing’ countries’ natural resources via ever-worsening terms of trade. Growing inequalities between the first and third worlds, it was argued, prevented developing countries from achieving the levels of development seen in the West. Both theories established national economic growth as the key mechanism for development. The debate between capitalist modernisation theorists and socialist dependency theorists faded with the collapse of the communist bloc (viewed as the ‘second world’) and the subsequent unchallenged dominance of the free market (Schuurman 1993).

Since the 1980s the World Bank and IMF have been at the centre of major global economic policy-making based on free market strategies which became a policy requirement for developing countries to receive ODA4 grants and loans (Stiglitz 2002:11). This international policy agreement was promoted by conservative governments in the UK and USA and implemented by these two Washington-based ‘Bretton Woods’ institutions in what is referred to as the ‘Washington consensus’. Providing finance through loans to poor countries, the World Bank and IMF demanded smaller governments and the promotion of the private sector and free market as the main vehicles for development. Government subsidies and services were kept to a minimum: government policies should reduce the size of the public service; remove minimum prices and subsidies; privatise services; deregulate the economy to encourage foreign investment; and promote agricultural production for export. These neo-liberal policies bear a number of similarities to ‘modernisation’ discourses, as deregulated economies promoted free-market access to natural resources. According to McKay: ‘some features have been redefined and reworked but the basic points about unequal power and the exploitation of the poor countries remain’ (McKay 2004).

Globally, more funds have been transferred in debt repayments from poor countries to rich than is received by the poor in the form of aid. Some economists argue that open market policies did not contribute to reducing poverty in less developed countries (Mosley, Harrigan et al. 1995; Killick 1998; White 2001). The 1980s became known as the ‘lost decade’ in development, where reforms failed to produce sustained growth, incomes fell, and the gap between rich and poor widened, particularly in Latin America (Jaquette and Staudt 2007). Countries with low levels of human resource development and poor infrastructure were at a disadvantage when competing in an open market. The high-growth ‘Asian Tigers’ of Singapore, South Korea, Hong Kong and Taiwan, claimed as proof of success of the development model, all invested heavily in human resources (education and health) and public infrastructure for many years before they opened their doors to the free market (Mackay 2005). In contrast, the least developed countries had to weather exposure to the free market at a time when they lacked the human capital to engage in the economic activities required for market-driven development. This has led to an argument to invest more in human capital in the form of education and health in order to sustain growth and stem inequality (Seligson 2003:468). In the poorest countries the gap between the rich and poor has widened as a growing middle class engage in a globalised market, while the conditions of the poor have hardly changed.

In Timor-Leste, the international financial institutions had considerable influence on the direction of the new economy. World Bank approved TFET funds for proposals based on the private sector and market as vehicles for economic development. The World Bank discouraged the maintenance of a national agricultural subsidy system (as implemented during the Indonesian period), by which agricultural services provided seeds, access to tractors for ploughing for a small fee, a rice marketing system that guaranteed sales of surplus production, and subsidised seeds and fertilisers. Proposals by the Timorese leadership for agricultural support in compensation for the loss of animals and agricultural equipment taken or destroyed in 1999 were denied (Anderson 2006). According to Anderson, their requests for the use of aid money to rehabilitate rice fields, build grain silos and public abattoirs were in conflict with the free-market policies of the trustees. During the Indonesian occupation large areas of land were cultivated for rice by the Indonesian transmigrant population brought in by the Indonesian administration. The transmigrants left, the tractors were taken and the irrigation systems were destroyed by the departing Indonesians. Timorese farmers were left to cultivate using traditional hand tools, dramatically reducing the area they could cultivate. Market opportunities also shrank as the numbers of salaried public servants was halved, reducing the circulation of cash in the districts in the early years of independence.

As most Timorese agricultural produce was for family consumption5 it fell outside the agricultural policy focus of the World Bank, which promoted production for the market. The main marketed food crop in Timor-Leste is rice, yet the World Bank discouraged Timor-Leste from rice production, arguing that rice can be produced more cheaply and imported from countries such as Indonesia and Thailand.6 The risks of this strategy became evident when the 2008 global economic crisis caused food prices to escalate around the world and much of the population of Dili was in distress due to the price of rice and forced to reduce food intake.

Measuring Development

In a significant move away from the World Bank’s economic indicators of Gross Domestic Product (GDP) to measure development, a Human Development Index (HDI) established a human rights focus for development status and ranking of nations. Economist Amartya Sen was instrumental in creating the HDIs in 1990 for the United Nations Development Program (UNDP), which annually publishes HDIs for all countries, incorporating national economic and non-economic indicators such as health, education, longevity and gender differentials as a measure of development.

Human centred development, as articulated by Amartya Sen, defines ‘development’ broadly. Sen stated ‘freedom is both the means and the end of development’, arguing that ‘unfreedoms’ arise from structures and realities that ‘limit people’s reason to value their lives’ (Sen 1999). Sen blamed neo-liberal strategies for generating inequalities which lead to social ‘unfreedoms’ which must be overcome by focussing on human capabilities and the enhancement of human potential. He did not reject market-driven development, considering the market an essential component of freedom, but argued safeguards are required so that the state can protect and support vulnerable individuals. Taking up this approach with respect to opportunities and choices for women, Martha Nussbaum suggested that the cultural assumptions of ‘what women do’ should be put aside to focus on ‘what people are actually capable of doing’ in support of empowerment and human dignity (Nussbaum 2000).

Concern about why world poverty was continuing in spite of some forty years of development assistance led to a new approach, a commitment by world leaders to free men, women and children from dehumanising poverty and share the benefits of globalisation more fairly. Just before Timor-Leste’s independence, in the year 2000, the largest gathering of world leaders in history took place at the Millennium Summit at the UN in New York City. At this meeting eight key Millennium Development Goals (MDGs) were established to be achieved by the year 2015. These included halving the incidence of extreme poverty, achieving universal primary education, promoting gender equality, reducing child mortality, improving maternal health, combatting endemic diseases and strengthening environmental sustainability. Achievements are monitored and published against targets for each country in the UNDP Human Development Report. Since the MDGs became a measure of development progress, former IFI policies, such as user fees on primary education and health clinic attendance, were revised. This ‘post-Washington’ approach acknowledges the existence of market imperfections and embraces the idea that strong social and institutional structures are crucial to growth and development. A strategy of ‘pro-poor growth’ is now promoted by major development agencies, with the key policy message:

Promoting pro-poor growth – enabling a pace and pattern of growth that enhances the ability of poor women and men to participate in, contribute to and benefit from growth – will be critical in achieving a sustainable trajectory out of poverty and meeting the Millennium Development Goals (OECD 2006).

These policy shifts also generated a view that social capital, in the form of social networks and civil institutions, are as important as other forms of capital to achieve these ends. Further, these social structures need to be supported by pluralistic forms of governance and decision making to develop social consensus over key reforms (Edwards 2001). This resulted in agencies such as the World Bank increasingly engaging with civil society in developing countries.

As well, the lack of national ownership of previous economic strategies imposed by the IFIs was seen as an impediment to progress, so donors started to seek national governments’ participation and commitment to the national development programs that they supported. In 2005, a meeting on aid effectiveness committed international donors to joint planning by donors and recipients through the Paris Declaration, embracing the principles of ownership, harmonisation, alignment, results and mutual accountability in aid delivery (AusAID 2008). For this to be achieved, it is essential that national governments are active participants in the formulation of their national development plans. National government ownership of policies and development programs as well as peoples’ participation in development initiatives had thus become part of mainstream policy.

Democracy and Governance Programs

Democratisation is recognised as a means by which people can participate in the process by which they are governed, and keep corrupt or dictatorial regimes out of government. UN peace keeping programs around the world have culminated in an electoral process being introduced into the ‘host’ country (Kumar 1998). In many cases, however, this process may be imposed on communities with little preparation or knowledge of Western style democracy, thus ‘democracy’ may be experienced by them as little more than an electoral process accompanied by election campaigns, adversarial politics and increased individualism.

For democracy to be a process that enables people to participate in issues that affect them, two conditions must be met. Firstly, citizen participation must be strengthened so that poor people are given a voice. This requires new forms of inclusion, consultation and mobilisation in order that those most socially disadvantaged are able to be heard by institutions and policies. Secondly, it is also necessary to strengthen the accountability and responsiveness of national institutions and policies (Gaventa 2004).

There are three spheres of government in Timor-Leste: national, local (District and Sub-District administrations) and village or Suco. The Suco level has historically been led by a Suco Chief chosen according to customary power structures. Both the Portuguese and Indonesian authorities collaborated with these customary power structures to maintain local authority. Indeed the Indonesian government delegated responsibilities and powers in planning, civil registry and conflict resolution tasks to the Suco level (Ministry of State Administration 2003).

In the UNTAET period a ‘Community Empowerment Program’ (CEP) was established as an outcome of the JAM. The JAM had assumed that there were no local structures with which the authorities could collaborate and proceeded to create ‘representative, community based institutions in order that the emergency phase may proceed with greater efficiency and community participation’ (Patrick 2001; Gunn 2003). Existing traditional leadership structures and practices within Timor-Leste that constituted local forms of decision making were ignored. The World Bank required the CEP Councils to have equal gender participation and to be made up of literate members, thus young educated people who either had some kind of ‘project experience’ or had proven to be good leaders in the clandestine movement were elected to the Councils. Effectively a dual structure of local authority was set up: youth on the CEP Council referred matters to customary leaders to make decisions that were then ratified at the Council meeting. According to one study, political and ritual authority are strongly connected to age thus the lack of seniority of their members meant that most of the councils had not yet developed any real power (Ospina and Hohe 2002). The World Bank’s CEP Completion Report noted that the ‘failure to create a sustainable institutional base for community development is a significant shortcoming in the project’ (World Bank 2005). It was found that the hurry to get the project going resulted in too little time for participatory processes to be developed to allow local views to be considered in its implementation.

The establishment of Western democratic rule within a customary society requires an understanding of interlinking worlds and power structures, if new political forms are not to clash with traditional ones (Preece and Mosweunyane 2003). For people to feel included, the democratic system needed to be relevant to their reality. For example, at independence, only 14 percent of Timorese believed that primary responsibility for law and order in the community lay with the police, in comparison with 81 percent who believed that community leaders were responsible (Asia Foundation 2002). The formal court system and police were seen as less fair, less accessible and more complex than the customary system where senior men gather together for a process of inter-familial consensus decision making. Observing the top down processes for establishing governance structures a Timorese activist noted:

Democracy is like a fruit tree which is forced to produce fruit early – it does not taste good. It has not had time to mature. Timor has not had time to mature with democracy. We need to build people’s understanding of the world, especially traditional views of democratic process. Our tradition has democracy – elders come together to discuss issues where more respected people are listened to more.7

The CEP also aimed to ‘empower’ communities to manage their own development projects, building on a new paradigm in development which challenged the orthodox views of development emanating from top down bureaucratic planning systems. This drew on the ‘participatory approach’ of the World Bank known as Community Driven Development methodology, funded by a global budget of $5.6 billion across 2000–2002 (Moxham 2004). As part of the CEP, individual entrepreneurship was encouraged through the provision of locally administered small loans and grants for local recovery and development activities. Over half of the CEP microcredit loans in Timor went to kiosks8 which resulted in an oversupply of this form of micro-enterprise (Moxham 2004). In 70 percent of cases the kiosk holder was unable to make enough money to pay back the original loan, and the output of this component was subsequently categorised as unsatisfactory by the World Banks’ own completion report (World Bank 2005). The CEP was subject to conventional project timeframes that did not allow the ‘participatory development’ model to be implemented. The failure of the World Bank to implement these principles of good practice therefore left poor Timorese individuals taking on a debt burden without adequate preparation or support to increase their income. The program was bound by institutional practices that made it impossible to achieve its objectives of effective consultation, achieving neither empowerment nor development.

The first RDTL government set out its national vision in the National Development Plan (Planning Commission 2002). This initial national plan for the new country, setting out national goals and objectives, was built on a broad consultation with the Timorese people in the lead up to independence, drawing on the views of almost 36,000 people through public consultation with communities, members of the church, civil society, national and international NGOs, the private sector and public interest groups (Planning Commission 2002:xvii). This process was highly regarded by civil society activists, as one explained:

Development is a process for the future, and includes education – free primary school for all, economic opportunity such as access to develop their own products, and justice for grassroots people, as well as participation of men and women in political leadership … During 6 years the government did many good things – the National Development Plan was good because it resulted from grassroots people with wide consultation with civil society and women’s networks.9

These remarks imply that if development is to be worthwhile and sustainable it must enable people to engage in the process. Sadly, as we will see, a weak engagement between national policy-making and the population continued to constrain development for many years to come.

Financing Development: Oil and Aid

An important focus of government in the first years of independence was the establishment of Timor-Leste’s economic independence. The Timor Gap agreement between the Australian Government and UNTAET, taken over by RDTL in May 2002, realised an income over four to five years of $80m from the Bayu Undan oil field.10 The RDTL’s national income budget was just $67.6 million the first year, $74.6 million the second year, and $75 million the third year, almost all of it from donor aid. By 2005 oil revenues started to contribute to Timor-Leste’s national income. Between 2006 and 2012, the State Budget grew by a factor of five, from $262 million to $1,280 million, of which almost all was from oil revenues.11

Negotiations for the Timor Sea oil and gas production in the first years had forced many of the Timorese government’s resources to be absorbed in a fight with the government of Australia to claim these petroleum resources (Cleary 2007). The 1972 maritime border agreement between Indonesia and Australia gave Australia two-thirds of the sea bed, access to the Timor Sea oil and gas reserves and established Australia’s recognition of Indonesian sovereignty over the territory. In order to impede any challenge by Timor-Leste over the maritime boundary, Australia withdrew from the International Tribunal for the Law of the Sea in 2002 (Brennan 2004). If international maritime law had been applied, the oil and gas of the Sunrise field would have been within Timor-Leste’s maritime boundary, but Australia sought to maintain the maritime boundary agreed with Indonesia. The Timor Sea Treaty signed on independence day (20 May 2002) provided for sharing of proceeds of the Joint Petroleum Development Area (JPDA). As the Greater Sunrise field is only partially within the JPDA, Timor-Leste would gain just 18 percent of revenue. Tough negotiating by the fledgling Timorese government ultimately resulted in a new Treaty on Certain Maritime Arrangements in the Timor Sea, but this required Timor-Leste to accept a fifty year deferment of the maritime boundary line settlement in exchange for an increase in royalties from the original 18 percent to 50 percent share from the proposed development of the Greater Sunrise field (Molnar 2010:105). Activists argue that if a mid-line maritime boundary was agreed, then all the Greater Sunrise would fall within Timor-Leste’s borders.

The establishment of the RDTL’s Petroleum Fund in September 2005 preserved the benefits of the extraction of oil and gas from the Timor Sea by investing oil and gas royalties in US bonds to create an income stream for future generations and to avoid the ‘resource curse’ (Drysdale 2007). Once RDTL started to receive royalties, it could start to support itself economically through interest from the Petroleum Fund, the value of which rose rapidly.

By 2007 the oil revenue had benefited from increased production at the Bayu Undan field and the rising price of oil, providing a total of $956m to the Fund in the twelve months to June 2007, with the Fund value exceeding previous expectations (La’o Hamutuk 2008). By 2011, according to Lao Hamutuk,12 oil and gas exports paid for 97 percent of state expenditures. The quarterly report of the Central Bank of Timor-Leste (Banco Central de Timor-Leste – BCTL) of June 2014 shows that its capital in the Petroleum Fund was $16.6 billion.

By 2008 the Timorese government was able to make its own decisions on how to improve health, education and agricultural services, and to develop the economy. For example, during a visit to Australia the Timorese Minister of Health, Dr Nelson Martins, announced that the government was progressing with a plan to import generic drugs from countries such as Bangladesh at a fraction of the cost of the brand name drugs. He explained that when dependent on donor funds, the Ministry of Health (MoH) had been obliged to buy from the major drug companies.13 He anticipated that the MoH would benefit from a dramatic reduction in the drug bill allowing greater expenditure in other areas, as well as providing increased government control over its spending.

A cost effective aid program for Timor-Leste was the provision in 2006 of Cuban doctors by the Cuban Government for $250 a month, ten times less that the UN-contracted expatriate doctors that they replaced. Some 230 Cuban doctors worked in Timor-Leste, while Cuban scholarships enabled 600 Timorese to attend medical school in Cuba and then replace the Cuban health professionals, following their graduation (Leach 2008). The US and Australia were not happy with the relationship that formed between Timor-Leste and Cuba (Molnar 2010:117), but in this country where doctors had previously been limited to the district towns, the Cuban health program enabled a doctor to be based in every sub-District at significantly less cost than Western aid-funded options.

Portugal has had a major influence on the development of the Timorese state from its inception, as a major donor to Timor-Leste and through Timor-Leste’s membership of the Community of Portuguese speaking countries (Comunidade dos Paises de Lingua Portuguesa – CPLP). The Timorese Constitution was modelled after that of Portugal, with certain adaptations from Mozambique (Molnar 2010:85). Timor-Leste’s adoption of the Portuguese language was financed by Portuguese Cooperation, including the development of a Portuguese language school curriculum and technical assistance in teacher training. Portuguese Cooperation describes itself as working as a European Union member state and within the national development strategy of Timor-Leste to provide assistance: ‘on the one hand, the consolidation of Portuguese as an official language in a wide range of contexts and, on the other, continued support towards developing an independent and effective judiciary, as well as the provision of specialist legal support to the civil service’.14 This relationship has enabled Timor-Leste to maintain some independence from the powerful influences of the Anglophone Western nations and their agencies, although these linkages have found little support amongst the majority of the nation’s young population, an issue elaborated further in chapter six.

According to the Timorese government transparency portal, in the four years 2009–2012 Portugal provided US$36 million. This can be compared to Australia, the largest donor, providing US$123 million, mostly in the strengthening of the state in the areas of policing, public sector development, the justice sector and rural water supply. The portal shows that of international commitments to Timor-Leste of $1,771 million, 57 percent or just over $1,000 million has been disbursed, with over 80 percent spent in Dili.

Another important issue in aid contributions is boomerang aid – that component which returns to the donor country as salaries and payments for goods and services. Timor-Leste’s former President, Jose Ramos Horta, has been an outspoken critic of Western aid policies, claiming on a visit to Australia in July 2009 that foreign aid was being spent on East Timor but not in East Timor. Of US$3 billion pledged to the country he stated most never made it to the people: ‘they claim to have spent on training, capacity building schemes. Yes, we needed that and there has been some positive use to that, but if that money was really used for capacity building in a proper way, every Timorese would have a PhD by now’.15

Aiming to change the power relations of international post-conflict aid, Timor-Leste played a leading role in the formation of the g7+ group of nineteen ‘fragile and conflict-affected countries’. Emilia Pires, Finance Minister of Timor-Leste in the fourth and fifth RDTL governments, had a passion for aid effectiveness that led this g7+ group to present a demand for a ‘New Deal for Engagement in Fragile States’ at the 4th High Level Forum on Aid Effectiveness, held in Busan, South Korea in November 2011. The groups’ vision was that ‘development architecture and new ways of working, better tailored to the situation and challenges of fragile contexts, are necessary to build peaceful states and societies’. A key demand was that engagement should focus on country-led and country-owned transitions out of fragility with support of international partners for ‘one vision and one plan’ (International Dialogue on Peacebuilding and Statebuilding 2011). In 2012, Finance Minister Pires was nominated Chair of the g7+ as well as being appointed by the Secretary-General of United Nations Ban Ki-moon to the ‘High-level Panel of Eminent Persons on the post 2015 Development Agenda’.

Timor-Leste’s leadership resulted in an international conference on the post-2015 Development Agenda, the largest meeting ever held in Dili at the Convention Centre in February 2013. It was attended by 227 participants from over forty-eight countries, on the theme: ‘Development for All: Stop Conflicts, Build States and Eradicate Poverty!’ The meeting produced an agreement known as ‘The Dili Consensus’16 on forms of cooperation, especially global South-South cooperation, as the key driver for change.


Harsh market economic policies of the 1980s and 90s have been modified to give recognition to the fact that development is a social as well as an economic process. This is evidenced by the importance given to meeting the MDGs, embracing concepts of democracy and promoting civil society as a check on government. Aid, however, is also used as a political tool to influence national policy decisions, promote neo-liberal economic policies and Western-style democracy, often with inadequate consultation with the people affected or understanding of pre-existing governance structures.

The international intervention from 1999 onwards presumed that Western concepts of development were those that would best meet the ‘development’ objectives of a new nation. Initially by-passing local leadership, the introduced structures, policies and practices did not take into account the socio-cultural conditions on which they were imposed. The government of Timor-Leste now leads an international movement which espouses a greater role for host countries in decision making about aid in peacebuilding and fragile environments. Next, the social and cultural aspects of rural life will be investigated and why this leads to differential impacts of development aid on men and women.

1     Bi-lateral aid is country to country aid by national government agencies. Multi-lateral aid includes donors such as UN agencies (UNDP, UNICEF, WHO, FAO etc.) and international financial institutions (World Bank, IMF, Asian Development Bank etc). The donor Organisation for Economic Cooperation and Development (OECD) countries support market-based development programs both through their own bi-lateral programs and through their contribution to the multilateral agencies.

2     TFET is a multi-donor trust fund that has supported reconstruction and development activities in Timor-Leste since 2000. The Government of Timor-Leste in coordination with the World Bank, the ADB, TFET donors, and other stakeholders, established TFET program priorities. All activities are implemented by Government agencies with support from stakeholders.

3     Mozambican National Resistance or Resistência Nacional Moçambicana.

4     ‘Official Development Assistance’ (ODA) is defined by the OECD as being flows from official sources for the ‘promotion of economic development and welfare of developing countries as its main objective’, and as ‘concessional in character with a grant element of at least 25%’. Thus concessional loans are defined as ODA while non-government organisations’ grants are not.

5     Subsistence farmers derive their principle food requirements from their farms. However they may market produce to variable degrees, depending on both the harvest and cash needs, for example to buy cooking oil, soap, clothes and to pay school fees. In a year of poor harvest a surplus may not exist.

6     Interview with World Bank Country Representative, Dili, 12 September 2005.

7     Interview, Timor Aid staff, Melbourne 7 April 2007.

8     Shops normally in a small hut made of locally obtained materials.

9     Interview, Abrantes, Dili, 30 July 2006.

10   Figures in US dollars unless otherwise indicated.

11   La’o Hamutuk submission to National Parliament Committee C (Economy, Finances and Anti-corruption) regarding the General State Budget for 2011 (


13   Seminar presentation by Dr Nelson Martins, Victoria University, 8 November 2007.

14   Government of Portugal (2007) Portugal-East Timor Program 2007–2010 pp.10–11.

15   Interview on ABC Radio ‘Australian foreign aid to East Timor “wasted”’, Connect Asia, 29 July 2009.

16   The Dili Consensus document is available at:

Activism and Aid

   by Ann Wigglesworth