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Economics

Clearing the Way

Timor-Leste Leads Transparency Initiatives

Dili Convention Center Members of the public sit in on the annual budget hearings. The hearings are part of a government initiative to uphold a high standard of financial transparency and accountability. The hearings are also nation- ally broadcast.

It would be a scene difficult to imagine in an industrialized country: A 13-day budget hearing broadcast live and attended by the Prime Minister and highest levels of government, business and civic leadership.

And yet, Timor-Leste, only 10 years after the restoration of independence, held these unprecedented hearings, and has become a pioneer in government transparency and accountability.

Timor-Leste is using its example to help other states around the world do the same. It represents a remarkable achievement for a country that only recently emerged from fragility so much so that other countries, including Australia, are taking note.

Timor-Leste’s Pledge

The government has also undertaken a range of other transparency initiatives.

Timor-Leste is part of the Extractive Industries Transparency Initiative (EITI), a program that calls for transparency for countries with energy wealth. Through the EITI process companies publish what they pay and governments disclose what they receive with this information verified and disclosed publicly. The EITI process prevents politicians and public servants from misusing the funds intended for the public. Moreover, the government formally publishes reports of its investments every three months. Australia has expressed an interest in joining the EITI as well.

Timor-Leste also has a Petroleum Fund. All revenue streams reported by operators and government in the EITI country framework are banked in the Timor-Leste Petroleum Fund. The Fund has $10 billion dollars. Underpinning the effort is the belief that the country and its resources belong to the people. Revenue Watch consistently ranks Timor-Leste high for its level of transparency in its financial management. In its overview report, the New York-based watchdog organization listed a number of Timor-Leste’s programs and noted its success in providing revenue information to enable public monitoring.

In 2011, the Ministry of Finance launched a Transparency Portal to make Budget, Procurement, Aid Transparency and Results available to the public. The Budget and Procurement portals are now fully functional with the Aid portal established but they require data input from donors.

Prime Minister Gusmao Prime Minister Xanana Gusmão, seated in the center, and Finance Minister Emilia Pires held budget hearings at the Dili Convention Center in August.

“Transparency is for both sides, not just the recipient country,” Minister of Finance Emilia Pires said. “Very often countries like ours get accused of being corrupt or mismanaging our funds, etc. However, with such mechanisms, we will know how much money really did go to the project, and how much went into overhead costs and consultancy fees.”

The information on the Budget portal reaches back ten years and is updated daily with fresh information giving a real time snapshot of the activities of the state and promoting greater participation from citizens.

Through the Ministry of Finance public financial information including budget law, budget manuals, and budget-related definitions of technical terms are also published. The transparency portal offers information on current-year budget execution and monthby-month revenue and expenditure information.

“Transparency means transparency. We have nothing to hide.” Timor-Leste Minister of Finance Emilia Pires

The Budget Transparency Portal publishes the revenues and expenditures, while the Procurement Portal tracks government contracts. The Aid Transparency Portal provides a listing of money received and spent.

These portals are accessible to everyone through the Ministry of Finance’s Web site and available publicly without a login and password. By contrast, developed countries, such as the U.S., Norway and Germany provide similar tools, but Timor’s investment in these portals underscores its commitment to democracy and sincere desire to lead.

It is a monumental achievement to have built the portal in such a short time. Pires noted that introducing changes to any system presents unique political challenges, but that changing the relationship between donor and recipient countries requires a fundamental transformation guided by institutional leadership and political will. Timor-Leste’s commitment to transparency underscores its longstanding focus on accountability.

“Transparency means transparency,” Pires said. “We have nothing to hide.”

And other countries, such as the United Kingdom, are increasingly looking to follow Timor-Leste. The innovations are expected to continue. The next step for the portals is to post photos of public works projects to provide the public with an even better understanding of public decisions in real time.

Eugenia McGill, lecturer at Columbia University, praised Timor-Leste for its efforts.

“That (transparency initiative) seems to be a great initiative; more countries should do that,” McGill said.

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