Timor-Leste

Government and United Nations in Timor-Leste launch Socio-Economic Impact Assessment Round-2 to contribute to the COVID-19 response and recovery

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Dili, TIMOR-LESTE, 09 November 2021: The United Nations in Timor-Leste together with the Ministry of Finance and the Ministry for Coordination of Economic Affairs, launched the Socio-Economic Impact Assessment (SEIA-2) today. This report summarises the feedback from people throughout the country about the impact of COVID-19 on households and Micro, Small, and Medium Enterprises (MSMEs). The assessment aims to inform economic recovery plans and key policy decisions to support the most vulnerable groups of people, as well as the private sector and MSMEs in Timor-Leste.

The study identifies the continuous impact of COVID-19 on households and businesses, with a specific focus on coping strategies adopted by vulnerable families, the informal sector and micro, small and medium enterprises. While speaking at the launch, His Excellency Joaquim Amaral, Coordinating Minister of Economic Affairs, noted, "With the sense of duty fulfilled at this stage of the fight against the COVID-19 pandemic, the Government of Timor-Leste assures of its commitment to continue supporting those in need including families, communities, companies and businesses. I am convinced that the SEIA-2 report will provide the Government and other partners with relevant information and evidence on the COVID-19 impacts to guide the new policy formulation."

SEIA-2 highlights how COVID-19 has magnified many of the underlying vulnerabilities within the country, including lack of basic infrastructure, reliance on imports, limited productive activities in the country, limited access to government services and limited technological capabilities. COVID-19 has negatively impacted many poorer households throughout the country. It has also affected formal and informal MSMEs in urban and remote areas that have exacerbated the impact of the pandemic. Many employees of MSMEs have lost employment during this period. Women employees, in particular, have been badly affected.

UN Resident Coordinator Mr Roy Trivedy said, "The pandemic has presented unprecedented challenges, but it also offers opportunities for us to build back and recover better. While we are at an important juncture of COVID19 recovery, it is worth reviewing the latest evidence presented by SEIA-2 and reconsidering the medium and long-term policies aligned with Timor-Leste's commitment toward the SDGs and leaving no one behind."

The global economic downturn due to the COVID-19 pandemic is having a disproportionate impact on low-income and emerging economies. Timor-Leste experienced the largest GDP contraction since its independence. In March 2021, the Government of Timor-Leste (GoTL) introduced lockdowns and other restriction measures to prevent the spread of COVID-19. These restrictions along with the global economic slowdown and oil price uncertainty, plunged the local economy into severe contraction, with expected real GDP per capita to slip down to the 2009 level. Timor-Leste's non-oil businesses, represented mainly through micro and small enterprises, continue to be squeezed by the fallout of the COVID-19 crisis with looming long-lasting adverse outcomes for many of the most vulnerable groups of people.

"While the COVID-19 crisis has exposed stark inequities, SEIA-2 offers the Government of Timor-Leste to reconsider and prioritise resilience to climate, health, and economic shocks in the framework of the economic recovery plan. The worst effects of COVID-19 can be minimised if the country's leadership continues committing to a new social contract and implements forward-looking and comprehensive programmes to tackle critical tipping points to lift the population from multi-dimensional poverty traps", said UNDP Resident Representative Munhktuya Altangerel.

The assessment is guided by the UN Secretary General's Framework for the Immediate Socio-Economic Response to COVID-19 (https://unsdg.un.org/resources/un-framework-immediate-socio-economic-response-covid-19 ), which set out the framework for the UN's urgent socio-economic support to countries and societies in the face of COVID-19, putting in practice the UN Secretary-General's Shared Responsibility, Global Solidarity report on the same subject (https://unsdg.un.org/resources/shared-responsibility-global-solidarity-responding-socio-economic-impacts-covid-19). It is one of three critical components of the UN's efforts to save lives, protect people, and rebuild better, alongside the health response. The assessment has focused on a series of in-depth evaluations guided by the Framework for the Immediate Socio-Economic Response to COVID-19, analysing actual and potential losses for Timor-Leste's economy and vulnerable groups due to the COVID-19 pandemic.