Washington, USA, 17 March – The International Monetary Fund (IMF) this week encouraged the government of East Timor to boost state investments, particularly in infrastructures and human resources for administration, in order to reach an annual economic growth rate of 7 percent.
The report on the IMF’s latest mission to East Timor, headed by Susan Creane, says that “rapid movement on the government’s plans to create a business-friendly environment is needed, including getting the necessary legal structure in place and reducing red tape.”
“In the near term, well-targeted public investment (in infrastructure and human capital) should be stepped up by easing budget execution constraints and further strengthening of administrative capacity under the government’s Planning Financial Management Capacity Building program. Over the longer-term, growth and job creation will need to come from the private sector,” it adds.
In the IMF’s opinion, in order to reach its development objectives, Timor will have to reach a development rate of 7 percent per year, which ” will require more forceful advancement of the government’s development strategy.”
“Despite good progress in establishing the basis for a stable and healthy economy, administrative capacity remains low and economic growth remains below the level needed to reduce poverty and strengthen human development,” the report says.
The report applauds the macroeconomic stability achieved in the half-island and acknowledges that the non-oil sector of the economy had “moderately positive,” performance in 2004 and 2005. (macauhub)