Timor-Leste Ministry of Finance

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BUDGET EXECUTION REVIEW WORKSHOP, DILI CONVENTION CENTER

The Government held a two-day workshop on 1-2 August 2011, on the 2011 Budget Execution Review led directly by the Prime Minister HE Kay Rala Xanana Gusmão, co-chaired by Minister of Finance HE Emilia Pires and moderated by Dr. João Mariano Saldanha, Senior Macro Economic Adviser of Ministry of Finance and attended by all Members of Government, Directors Generals and related Directors and other heads of state agencies.

The objective of the workshop was to update on the current state of the 2011 budget execution and how to overcome the challenges facing the country relating to inefficiency within bureaucracy so as to enhance financial administration and management in the line ministries for the best use of 2012 budget.

Prime Minister updated the forum that Timor Leste has achieved remarkable achievements over the past few years that include peace and stability maintenance in the country, the successful solution of IDPs, the pensions for veterans, for the elderly and vulnerable groups, and the double digit economic growth that placed TL as one of the 10 fastest economies in the world, poverty reduction and the successful institutional reforms.

However Prime Minister also indicated that the country still faces lots of challenges including: the high poverty incidence, the unemployment phenomenon; the infrastructure deficiencies, limited domestic production which has forced the country relying on products import from overseas. Prime Minister specifically underlined that inefficiency in the state budget management has occurred because:

• Budget submission does not respect fiscal envelope;
• There is tendency of creating debts and also  tendency of using contingency budget justifying that all requests are urgent or emergency;
• Public services are always delayed and inefficient;
• Weak Ministries’ financial  management due to lack of coordination between Ministers, vice ministers and secretaries of state and directors;
• There is tendency of spending budget in the last month of December (end of fiscal year);
• Vehicles misuse and miss management and mal practices including selling fuel coupon;
• Project costs do not reflect reality in the ground.

Mr. Gusmão gave guidance for the next steps to be taken into consideration including: to strictly sticking on the fiscal envelope in the next 2012 budget, to avoid debts, and to avoid attitudes of treating everything as emergency hence justifying virements, but unfortunately services are always delayed. He then advised everybody to correctly identify and set up clear roles and responsibilities for everyone (minister, SE and Director) and then strengthen the capacity of the line ministries’ financial administration in order to better perform according to the rules and procedures.

Ultimately, Prime Minister strongly reminded to avoid debts for the future Government and execute the 2011 budget according to the Annual Action Plan and expected that the 2012 budget will comply with the fiscal envelope and the national priorities as outlined in the Yellow Road.