Timor-Leste’s ticking time bomb

Economy grows yet unemployment is worsening rapidly

Christovao Freitas Almeida finally managed to find work at the Education Ministry. (Photo by Siktus Harson)

When Christovao Freitas Almeida graduated from high school in 2007, work was thin on the ground. Too poor to go to university, the 26-year-old found himself stuck in his village in Timor-Leste’s northwestern district of Aileu, close to the capital Dili. Young and jobless, the future looked bleak.

For six years Christovao was among a worryingly large proportion of Timorese without a job. The country, which for 24 of the past 40 years was engulfed in war, has Southeast Asia’s highest unemployment rates, at 11 percent according to the country’s Labor Ministry. The youth has taken the brunt of the crisis, and even a university degree no longer provides anything close to a guarantee of work.

By dint of his geographical location, however, Christovao became one of the lucky ones. Staff from the NGO Plan International arrived at his village one day in 2013, offering free skills training for unemployed villagers. He spent six months honing his computer and communication skills, and this year landed a job at the Education Ministry in Dili. He now earns a monthly salary of $160, above the $115 minimum wage set by the government, but he remembers well the hard years.

“Most of my time was spent playing, drinking, and sometimes getting drunk. That’s what jobless people often do, drinking and get drunk, and can easily get provoked [to fight],” he told ucanews.com.

This came to the fore in 2006 when, triggered by upheaval within the Timorese military, the country became embroiled in a major crisis, with soldiers and police taking over the streets of Dili, forcing 150,000 people to flee. In the aftermath of the crisis, the UN warned that underlying problems that had contributed to the spread of violence among civilians were not being addressed, one of them being mass unemployment.

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On paper, things don’t look bad for the Timorese economy. The country’s GDP grew by eight percent last year, according to the Asian Development Bank, and this is set to continue into 2015. But, warns Paulo Alves, director of employment at the Secretary of State for Vocational Training and Employment, that doesn’t always translate into job creation in Timor, the region’s poorest country.

The proof is in the figures. Timor has accumulated more than $10 billion since independence in 2002 from offshore oil and gas reserves, yet it remains a low-income country, with extreme levels of poverty and complex social problems.

“The problem here is that the labor force grows rapidly, while employment opportunities are growing at slow phase,” Paulo told ucanews.com.

Every year, he said, about 15,000 to 20,000 people graduate from high school. Only about 2,000 to 3,000 of them can afford to continue to university, while those from poor families seek immediate work to improve their families’ financial wellbeing. According to a World Bank report last year, by 2030, 470,000 individuals will have attempted to enter employment, a consequence of the fact that Timor-Leste has one of the world’s highest birth rates, with more than 40 percent of Timor Leste people below 15.

At present, the country does not have labor-intensive sectors such as a garment industry, which in many other countries – such as Bangladesh or Indonesia – draws a huge amount of even unskilled labor. Agriculture, which employs more than 60 percent of Timorese, is only seasonal, and therefore not considered a fix. “When crop seasons [rice, corn, and coffee] end, people will again be jobless,” said Paulo.

One government response to the problem has been to create a “three dollar program” in which it pays people $3 a day to work in government-sponsored projects such as road construction.

“One of most important things is to encourage more private companies to invest in sectors that can recruit many local people, such as in tourism and commercial sectors,” said Alves. He cited Dili’s first and only shopping mall, Timor Plaza, as an example. The business center inaugurated last year has employed hundreds of local Timorese.

While the energy sector is presently not a solution to the problem, the government’s ambitious $1.3 billion Tasi Mane oil and gas project will focus on recruiting locals, and become the backbone of the country’s petroleum industry.

“We estimate that the project will cut unemployment by 95 percent, as it will need more than 100,000 local people,” said Paulo, adding that the Labor Ministry has established a subdivision that will be in charge of training oil and gas workers.

Another strategy to curb domestic unemployment has been a deal struck in 2008 with Korea and Australia, in which young Timorese are sent to work in both countries, focusing mainly on the fisheries, agricultural, and industrial sectors. More than 1,400 people have been sent to both countries, with total remittances of $2.9 million.

Etha Mota, head of Plan International’s youth empowerment for sustainable development program, said in the last two years the group has been involved in training more than a hundred young people like Christovao aged 15 to 24 with different skills depending on their needs.

Yet this training will only be more effective when employment opportunities are made available nationwide.

“On the one hand the huge labor force is an opportunity for the country,” Etha said. “On the other it is a threat because not everybody has the chance to work, even though they want to.”

Published in UCA News, May 12, 2014

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