2007 to be a growth year for East Timor, prime minister says

8 November 2006

Dili, East Timor, 08 Nov – The East Timor economy is set for string growth from 2007 due to the adoption of measures to encourage investment, namely some tax breaks, the country’s prime minister, José Ramos Horta said Tuesday in Dili.

Speaking to Portuguese news agency Lusa during a break in a seminar promoted by the World Bank, Ramos Horta said that the government was moving ahead with fiscal reform.

“We are going to do away with some taxes, reduce others and create incentives for the private sector so that, for example, an insurance company can be set up in the country,” he said.

Ramos Horta said that the recent political and military crisis was not conducive to foreign investment, but noted that in the last few weeks he had approved projects totaling some US$90 million.

In October, The International Monetary Fund (IMF) said in a statement that the crisis had been a blow to East Timor’s economic growth.

The IMF added that the crisis had caused inflation to rise and resulted in reduced international competitiveness and as a result it was expected to post negative growth in 2006, despite an increase in public spending and international aid.

Ramos Horta said, however, that the recent crisis was nothing more than a growth crisis and said he was convinced that 2007 would be a year of great economic growth for East Timor. (macauhub)