SDG Push Insight Report

Timor Leste

Timor Leste
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Integrated SDG Insights

Timor Leste

UNDP’s Integrated SDG Insights explore how to achieve the SDGs by 2030. So that no one is left behind.

How To Read This Report

‘SDG Insights’ playbooks transcend development “as usual,” and leverages data innovation, AI and systems analysis to chart credible pathways that help countries meet the 2030 Agenda.

SDG Moment — This section provides an overview of a country's economic growth trajectory, with new insights on sustainability and inclusiveness of growth pathways.‍

SDG Trends & Priorities — This section builds from the foundation of national SDG progress and uses machine learning to analyse national development ambition with an SDG lens.
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SDG Interlinkages — Combined, these insights are mapped against SDG interlinkages to define policy choices the accelerate SDG progress, tailored to national context.
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‍Finance & Stimulus — These policy choices are made against fiscal constraints and opportunities for stimulus mapped in this section to ensure choices translate to development impact and leave no one behind.

1. SDG Moment

While economic growth is a key element in achieving the SDGs, many countries are intent on moving beyond growth as a yardstick for progress. In the short run, growth enables the SDGs; but in the long run, the SDGs aim to transform the pattern of growth itself.

GDP Growth Pathways

People

Poverty: Percentage of the population under each threshold (PPP$ a day).

Data not available.

Planet

Carbon Intensity: CO2 emissions intensity of GDP (tCO2 per PPP $1,000).

Timor Leste’s economy is in mitigation mode in 2023 and is projected to transition to moderate growth by 2024-2025. 1 As the country's economy continues depending on public sector spending, the challenge is to ensure coordinated multi - stakeholder action, which is necessary for SDG implementation. Despite efforts to protect the most vulnerable households from the crises, economic recovery will ultimately depend on the country's ability to spur growth and create jobs.

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Poverty rates increased following the COVID-19 pandemic and estimates show that around 55% of the population lives in multidimensional poverty. Projected economic performance could be reflected in stagnation or even in an increase of the poverty rates, for instance, measured as the population under the societal poverty line. This brings to the fore the urgency to fast -track activities resulting in economic diversification and growth. Even with the challenges imposed by climate change that exacerbate vulnerabilities, there is an opportunity for the country to enhance its resilience while preserving the environment, leading to a sustainable development trajectory.

3. SDG Interlinkages

Maps synergies and trade-offs of national priorities to the most relevant SDG targets to chart policy pathways with most potential to accelerate progress.

2.2: End all forms of malnutrition, including achieving the internationally agreed targets on stunting and wasting in children under 5 years by 2025

Despite progress made by Timor-Leste in recent years, alarmingly high levels of malnutrition and food insecurity persist. As of 2020, the prevalence of moderate to severe stunting among children under 5 years in the country stood at 46.7%, indicating a slight improvement compared to 51.7% in 2013. However, this remains the highest proportion in the region and the country ranks third globally. Nearly half of the children in Timor-Leste are stunted.

There are multiple causes of malnutrition in Timor-Leste, and consequently, there are multiple development benefits of addressing it. Well-nourished children are more likely to perform better in school, have healthier lives and eventually secure better economic opportunities, thereby reducing overall poverty rates and inequalities.

In the Programme of the IX Constitutional Government, nutrition issues are addressed in various parts, including in education, health and agriculture. Trade-offs around SDG Target 2.2. are mostly related to competing priorities for resource allocation.

8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high value-added and labour-intensive sectors

The lack of economic diversification makes Timor-Leste vulnerable to global economic shocks and hinders its ability to create jobs for its growing population. Investments on SDG Target 8.2. can contribute to lifting people out of poverty, increasing agricultural productivity and fostering economic growth.

Economic diversification is prioritized by the Programme of the IX Constitutional Government. During the Doha Conference, Timor-Leste expressed its willingness to defer its graduation from the LDC status, partially with the aim of ensuring a more robust diversification of its economy.

Timor-Leste's accession to the World Trade Organization and integration with the Association of Southeast Asian Nations also offer both challenges and opportunities with regard to diversification as the country will move towards greater openness and will compete with other countries in the region and beyond.

This target has virtually no trade-off and is fully consistent with the Programme of the IX Constitutional Government. Adequate measuring of this target requires the use of supplemental indicators.

14.7: Increase the economic benefits to small island developing States (SIDS) and least developed countries from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism

The Programme of the IX Constitutional Government in particular highlights the importance of SDG14 recognizing the importance of conservation and of the sustainable use of marine resources for sustainable development.

There are multiple potential synergies of promoting sustainable exploitation of marine resources. Fisheries and aquaculture contribute to food security and livelihoods, while the tourism sector benefits from marine and coastal attractions, driving employment and foreign exchange earnings (VNR). In promoting sustainable use of marine resources, the country has an opportunity to exchange experience with other SIDS and coastal states.

Some trade-offs may relate to the fact that the conservation objectives can contradict objectives related to the promotion of economic activities in various fields.

17.18: Enhance capacity-building support to developing countries, including for least developed countries and small island developing States, to increase significantly the availability of high-quality, timely and reliable data

Various sources reveal significant challenges that Timor-Leste faces with data availability and use, including limited technological infrastructure, shortage of skilled professionals, with expertise in data management, analysis and interpretation, data fragmentation, limited financial resources in data infrastructure, technology and capacity building initiatives. The Programme of the IX Constitutional Government contains a commitment to strengthen institutions responsible for the production of rigorous statistics and calls for the careful review of various programmes.


In the context of SDG implementation, the issue of data and related theme of statistical capacity are cross-cutting and relate to all the goals and targets.

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15.1: By 2020, ensure the conservation, restoration and sustainableuse of terrestrial and inland freshwater ecosystems and their services.

By prioritizing Target 15.1 in its 2021-2025 National Development Plan, Ecuadorreaffirmed the significance of protecting and preserving terrestrial ecosystems andtheir biodiversity. This includes recognizing that the investment projects intendedto fulfil Target 15.1 will not only contribute to achieving the SDGs 13, 14 and 15, butwill also help restore ecosystems that underpin the availability and comprehensivemanagement of water resources (SDG 6) and promote their sustainable use (Target12.2). Additionally, it will also foster the generation of new energy from renewablesources (Target 7.2).

To this end, Ecuador seeks to strengthen the management of the National Systemof Protected Areas through its 2022-2032 Strategic Plan and the implementationof the National Forest Restoration Plan 2019-2030. These instruments serve as thetechnical, legal and financial foundation for executing local forest restorationprocesses with a landscape vision, with an overall goal of covering 30,000hectares through its projects. Considering that the proportion of national territoryunder conservation or environmental management, as of 2022, stands at 22.1%, itis necessary to mobilize additional financial resources from various sources andestablish robust governance (Target 17.3) to intensify the care of protected areas.This ensures the conservation of natural and cultural resources, genetic flows, theprovision of environmental services for the benefit of the population and thealignment of policies on the ground.

Futures Scenarios

SDG Push is a futures scenario based on 48 integrated accelerators in the areas of Governance, Social Protection, Green Economy and Digital Disruption. It uses national data to explore the impact on human development by 2030 and 2050 across key SDG indicators. It does this by using ‘International Futures,’ a systems model designed to explore interactions across development systems.

Poverty <$1.90 Per Day (Number of People)
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Malnourished Children Under 5 (Number Of Children)

Malnourished Children Under 5 (Number Of Children)

4. Finance and Stimulus

Many countries are facing reduced fiscal space, high debt levels, rising interest rates and downgrades on credit ratings. Fiscal and financial constraints tend to slow or even reverse SDG progress.

Timor-Leste's gross government debt, projected at 16.7% of GDP in 2023, is less than a quarter of the emerging market and middle - income economies’ (EMMIE) average of 68.8%. The country is projected to collect 44.6% of GDP in revenue this year – 1.7 times that of the average EMMIE country at 26% – with natural resources accounting for three quarters of said revenue.

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Timor -Leste's external debt servicing this year is expected to be at 3% of revenue, hence less than a fourth of the EMMIE group's 12.3%. Due to high fiscal deficits and dependency on the finite Petroleum Fund to fund the deficits, the latest World Bank and IMF DSA from July 2022 rated the country as at ‘moderate risk of debt distress’.

SDG Stimulus

The UN Secretary General’s SDG Stimulus Plan lays out a blueprint for action within the existing financial architecture. It includes:

  • Providing liquidity to support recovery in the near term
  • Enhance debt relief for vulnerable countries.​
  • Expanding development financing by MDBs
  • Align financial flows with the SDGs and Paris Agreement, according to country-level priorities and needs, for example through the rollout of the UN Integrated National Financing Framework (INFFs).

Given the projected fiscal and financial constraints faced by

Timor Leste

possible funding options for the investments derived from the identified interlinkages are as follows:

  • Tax and revenue reform
  • Climate finance (including Loss and Damage Fund)
  • Blue economy financing (investment strategy, innovative finance)
  • Blended and public-private finance
  • Enhancing the effectiveness of official development assistance
  • Accessing financial markets and insurance
  • Remittances and diaspora resources

Methodology & Data Sources

Click here to view the Methodological Note for the Integrated SDG Insights.

This report is the result of a global exercise carried out using artificial intelligence to identify SDG priorities based on 10 national government documents, together with SDG progress and SDG interlinkage analysis. The implementation and monitoring of the 2030 Agenda in Argentina should be consulted in the Country Reports and National Voluntary Reports.

SDG Moment

Methodology
Assesses challenges and opportunities in national growth trajectories with insights on environmental sustainability and inclusiveness.

Data Sources
Future trajectories to 2025 are based on IMF-WEO GDP projections, distributions of per capita income or consumption from the World Bank, and CO2 emissions from the Global Carbon Budget 2022 and EDGAR (JRC and IEA).​

Trends & Priorities

Methodology
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Data Sources
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Interlinkages

Methodology
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Data Sources
The exercise globally considered a total of 454 documents published from 2015 to August 2022. (Miola et al., 2019 updated in 2021-2022)​

Finance & Stimulus

Methodology
Provides insight into indicators of fiscal and financial stress with options (INFF) for stimulus and other means to accelerate progress.

Data Sources
Most recent resource data from UNU-WIDER GRD (between 2018 and 2021), debt and revenue from IMF WEO (between 2020 and forecasts for 2023), external debt from IDS (2023), yields from Haver Analytics (8 June 2023), credit ratings from S&P, Moodys and FITCH (2023), and DSA ratings from World Bank/IMF (31 May 2023).