The Vice-Minister of Finance Sara Lobo Brites participated in the Great Debate where the theme of “Economic Sustainability in Timor-Leste” was addressed, on August 25, 2020, at the Nobre Palace in Lahane, as part of the celebration of the 10th anniversary of the National Defense Institute.
Sara Lobo Brites, who served as interim Minister of Finance for two years, addressed two specific issues: the reasons for establishing an economic sustainability policy for Timor-Leste, and the means necessary to achieve economic sustainability.
The Vice-Minister said that after the first decade of independence, the country started a process of sustainable social and economic development encapsulated in the Strategic Development Plan 2011-2030, which aims at transforming Timor-Leste into a “prosperous and strong nation with average upper middle income”. Thus, the ongoing reforms and priorities of the current government are in line with the Strategic Development Plan 2011-2030 to better achieve this objective.
The Vice-Minister also stressed that fiscal sustainability is a major challenge that the country faces at this time. In this context, the Vice-Minister said that the General State Budget is largely financed by revenues from the Petroleum Fund; therefore, ongoing reforms are aimed at increasing domestic revenues, thus reducing the country’s dependence on the Petroleum Fund.
The Vice-Minister also stated that the Timorese economy is characterized by high dependence on public spending, prevalence of the non-formal sector and low level of investment in the private sector; thus, it is necessary to diversify the economy to include potential sectors such as tourism, industry and agriculture. To this end, a favorable environment for private sector investment must be created, ensuring fiscal sustainability that include control and efficiency in public spending.
The Vice-Minister defended the 3 percent rule of Estimated Sustainable Income to finance the General State Budget as stipulated by the Petroleum Fund Law that provides for the sensible management of petroleum funds for the benefit of current and future generations.
At the end, the Deputy Minister of Finance stated that the Government is committed to ensuring and guaranteeing the economic sustainability of the nation in the future, and to that end it has the support of the various levels of Timorese society to achieve this objective.