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03 May 2009

Planning and Financial Management Capacity Building Program Delivers Significant Results to Timor-Leste's People

DILI - The World Bank is committed to working with the Government of Timor-Leste to bring about sustainable development and poverty reduction through social stability, human development and economic growth. A central element of this strategy is the Planning and Financial Management Capacity Building Program (PFMCBP), which is a five-year advisory program designed to assist Timor-Leste's Ministry of Finance strengthen its planning, budgeting, public expenditure management and revenue administration functions with a central focus on capacity building.

PFMCBP has delivered significant results for Timor-Leste since its inception in May 2006. The government's budget execution increased from US$76 million in 2005/06 to US$550 million in 2008; a more than seven fold increase in cash execution.

Improved rates of budget execution have enabled the Government to carry out a successful program of political and social stabilization in 2008, in which most Internally Displaced Persons (IDPs) were resettled with cash grants, payments were made to the petitioners, pensions were introduced for veterans, the elderly and the disabled and a major increase was achieved in the sums of money spent on labor-intensive public works. This spending, along with increased outlays on infrastructure and goods and services, delivered an estimated 12% rate of economic growth and poverty has likely been reduced in 2008.

Specialized skills are required to help develop Public Financial Management systems and consultants have been recruited globally by the ministry. Many of the impressive outcomes outlined above can be directly attributed to the assistance provided to the MoF by consultants financed under PFMCBP.

The consultants are developing skills of their Timorese counterparts through intensive on the job training and formal skills development initiatives. They are required to handover tasks incrementally as the technical skills rise within the Ministry of Finance. It is anticipated that the number of advisors hired under PFMCBP will reduce by around a third by 2010.

A large proportion of PFMCBP funds are used for the Professional Development Program, which provides scholarships, work placements and basic skills development to Ministry staff. The programs central objective is to equip Ministry Staff with the technical skills they need to contribute to a professional, ethical and transparent Ministry of Finance.

The PFMCBP cost is US$37 million over five years. If the project can continue to help stabilize the country, build durable systems and help combat corruption, it represents money very well-spent.

The program is funded through an IDA grant (P092484, US$7 million), and co-financed by a Multi-Donor Trust Fund (TF070932, US$22 million). To date the IDA Grant has financed all of the PFMCBP activities, including consultancy services. The MDTF to date has received US$11.5 million from donors. Administrative Agreements have been signed with Norway, EC, Ireland, New Zealand and Australia. The MDTF closing date is 31 October, 2011.

Permanent URL for this page: http://go.worldbank.org/YP8BIMBCE0

For further information, please contact: Aleta Moriarty, Australia Tel: +61 2 9235 6545 e-mail: amoriarty@worldbank.org Sancho Goncalves, Timor-Leste Tel: +670 723 6095 e-mail: sgoncalves@worldbank.org Release date: 30 Apr 2009

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