2013年-IMF国际货币组织全球_Democratic_Republic_of_Timor_66页_1mb

2013 Article IV Consultation Summary: Democratic Republic of Timor-Leste

Core Content

The 2013 Article IV Consultation with the Democratic Republic of Timor-Leste (DRT) was conducted by the IMF staff, with discussions held in Dili from June 4 to 17, 2013. The consultation aimed to assess the economic developments and policies of the country, with the staff report finalized on October 7, 2013, and presented to the Executive Board on October 23, 2013. The report highlights the country's economic challenges, policy recommendations, and outlook for growth and sustainability.

Main Points

Economic Context

• Resource Dependence: The economy is heavily reliant on natural resources, particularly oil. Government spending, driven by oil exports, has led to rapid non-oil GDP growth but with high inflation, loss of competitiveness, and weak employment generation.
• Political Stability: The country has achieved political stability following the 2012 elections, with Prime Minister Xanana Gusmão re-elected. The UN peacekeeping mission has ended, but fragilities remain.
• Strategic Development Plan (SDP): Launched in 2011, the SDP aims to achieve upper middle-income status and significant poverty reduction by 2030.
• g7+ Membership: Timor-Leste is a founding member of the g7+ group of fragile and conflict-affected countries and has taken a leadership role in promoting the New Deal approach.

Economic Outlook and Risks

• Growth Expectations: Non-oil GDP growth is expected to average around 8.5 percent in the medium term, significantly lower than the double-digit growth from 2008 to 2011.
• Key Risks:
  • Fiscal Sustainability: Current expenditure trends are not sustainable, risking public sector asset depletion and inflation.
  • Oil Production Uncertainty: The end of oil production by 2024 and lack of agreement on new oil fields could impact growth.
  • Inflation and Competitiveness: High inflation undermines competitiveness and poverty reduction.
  • Private Sector Development: Weak private sector growth and structural bottlenecks hinder labor-intensive growth.

Policy Discussions

• Shift to Higher Quality Growth: The focus is on transitioning from government-led growth to a more inclusive and sustainable growth path driven by the private sector.
• Three Broad Elements:
  1. Fiscal Policy: Reducing public expenditure, improving its quality, and diversifying revenues.
  2. Private Sector Development: Catalyzing private sector growth through structural reforms, improved competitiveness, and addressing bottlenecks.
  3. Financial Sector Development: Enhancing access to finance and improving regulation and supervision.

Key Policy Recommendations

A. Bolstering the Macroeconomic Framework

• Fiscal Sustainability: The revised budget aims to stabilize public expenditure and reduce the fiscal deficit from 92 percent of non-oil GDP in 2013 to 27.5 percent by 2018.
• Exchange Rate: The real effective exchange rate (REER) is overvalued, which has reduced competitiveness and hampered employment.
• Petroleum Fund (PF): The PF, with assets equivalent to over two times GDP, is a key source of revenue. Its value is projected to stabilize in the medium term under the revised budget (Yellow Road).

B. Fiscal Policy

• Expenditure Choices:
  • Capital Expenditure: Prioritizing high-impact projects that generate employment and returns, such as infrastructure and human capital development.
  • Recurrent Expenditure: Containing wage bill growth, better targeting of subsidies and transfers, and maintaining social cohesion.
• Revenue Diversification: Introducing a VAT and improving tax administration to broaden the tax base and reduce reliance on oil revenues.
• Asset-Liability Management: Developing a framework to manage public debt and off-budget liabilities, with a focus on transparency and accountability.

C. Boosting Growth by Catalyzing the Private Sector

• Private Sector Development: The government has initiated projects such as a one-stop shop for new businesses and public-private partnerships (PPPs).
• Structural Reforms: Needed to improve competitiveness, enforce contracts, and enhance access to finance.
• Human Capital: Investing in health and education is crucial for long-term growth and poverty reduction.

D. Monetary and Exchange Rate Policies

• Full Dollarization: Maintained as a nominal anchor due to limited capacity for independent monetary and exchange rate policies.
• Inflation Management: Reducing inflationary pressures through prudent fiscal policy and improved absorption capacity.

E. Financial Policies

• Financial Sector Development: Enhancing access to finance and improving regulation and supervision to support inclusive growth.

F. Other Issues

• Implementation Capacity: Despite strong governance frameworks, the implementation of policies remains a challenge.
• Social Cohesion: Balancing fiscal restraint with social protection is essential to maintain stability and support poverty reduction.

Authorities' Views

• The authorities agreed with the staff analysis and recognized the need for fiscal restraint and structural reforms.
• They emphasized the importance of reducing subsidies, especially in the electricity sector, and improving the efficiency of public spending.
• The Council of Ministers has approved the revised budget, indicating political consensus on the new approach.
• Capacity-building in tax administration and public financial management is a priority to support the introduction of a VAT and improve fiscal sustainability.

Conclusion

• The revised budget framework, known as the "Yellow Road," is seen as a sustainable path that balances fiscal restraint with growth promotion.
• The transition to a more inclusive and private-sector-led growth model is essential for long-term economic stability and poverty reduction.
• Continued support from international financial institutions and donors is necessary to strengthen governance, implement reforms, and ensure fiscal and economic sustainability.