Program Data Sheet
472-001

USAID PROGRAM: East Timor
PROGRAM TITLE: Economic Revitalization (Pillar: Economic Growth, Agriculture, and Trade)
STRATEGIC OBJECTIVE AND NUMBER: Revitalization of the Local Economy, 472-001
STATUS: Continuing
PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE: $11,500,000 ESF
PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE: $7,000,000 ESF
INITIAL OBLIGATION: FY 2000      ESTIMATED COMPLETION DATE: FY 2003

Summary: USAID support to East Timor's economic recovery and growth includes the following components-

• expand national (Cooperativa Café Timor) and local-level cooperative business projects to include high-quality organic specialty coffee for export, other agricultural commodities, and small retail enterprises;
• improve management and business skills of Timorese managers;
• expand cooperative health clinics to include HIV/AIDS prevention information and services; and
• assist East Timorese to advance key economic transition issues, i.e., policy analysis, advocacy, and capacity-building.

Inputs, Outputs, and Activities: FY 2002 Program: USAID's major categories of economic recovery activities in FY 2002 will be the expansion and diversification of agriculture, rural development, training, and health activities under the East Timor Coffee Project.

While in recent years the coffee project has focused primarily on rehabilitating and strengthening the coffee components of the project, in FY 2002 activities will increasingly emphasize research and demonstration projects to develop other profitable agricultural crops and trade opportunities. At the same time, USAID will expand the coffee activity to more geographic areas and increase membership in the coffee cooperative by approximately 4,000 farmers in FY 2002 to a total of 22,000. As the largest private-sector employer in East Timor, the cooperative contributes significantly to stability, recovery, and long-term economic development by generating immediate employment and income. Through support to purchasing cooperatives of small-scale retail outlets, USAID will help lower prices and improve access to consumer goods in rural areas, and provide credit and training for small-scale and micro-entrepreneurs. USAID-supported health clinics in coffee growing areas will continue to expand, with four new clinics planned in FY 2002.

USAID's Office of Transition Initiatives (OTI) will provide critical grants that support USAID's economic recovery program, including policy analysis, advocacy, and capacity building for key economic transition issues. Initiatives include support to the East Timorese Public Administration's Office of the Timor Sea to familiarize senior public officials' with off-shore oil and gas regimes, technical assistance to the National Planning Commission to develop a private-sector development strategy as part of the National Development Plan, an assessment of the rural banking system and policy options to extend financial services, and innovative pilot projects supporting farm-to-market trade linkages and rural enterprises.

Planned FY 2003 Program: In FY 2003, USAID plans to further expand farm cooperative membership, with a target of 26,000 farmers participating by the end of the project period. In addition to continuing technical assistance to retail, agriculture, health, and training activities, the program intends to focus on strengthening Timorese managers' capacity to assume overall management of the program with a view toward reducing expatriate advisors and creating a sustainable enterprise.

The transition of OTI-managed activities to the field mission will take place during the first quarter of FY 2003; USAID does not envision programs under OTI's management beyond this time period. Incorporated in the transfer plan will be a small-grants mechanism so that USAID will have the ability to continue grants to local groups through FY 2003.

Performance and Results: A total of 122 grants provided under OTI's community stabilization program bridged gaps in local social services and economic infrastructure, i.e., irrigation systems, schools, and community buildings. OTI partnered with the World Bank to effectively complete the reintegration of Falantil ex-combatants. The East Timor Coffee Project buys premium organically grown coffee cherries from the 18,000 farm families in its cooperative network and exports organic coffee beans worldwide. The 2001 harvest generated $3.5 million for the cooperative's coffee farmers and processors. The project directly benefits one in ten Timorese families by generating income for cooperative staff, farmers, seasonal workers, and medical personnel. NCBA also has integrated business education and training into its project. The NCBA coffee project has integrated community-health maintenance and healthcare services, providing basic health services to 18,000 families through eight primary health clinics. Over 26,000 farm families will be eligible to receive CCT affordable healthcare services over the next two years. While other donors have taken the lead on HIV/AIDS in East Timor, USAID collaborated with the Ministry of Health and other donors in FY 2001 on an assessment of East Timor's vulnerability to HIV/AIDS.

Principal Contractors, Grantees, or Agencies: The National Cooperative Business Association (NCBA) implements the coffee project. In addition to local civil society organizations, media entities, and targeted support to the new East Timorese Public Administration, major OTI partners include Development Alternatives, Inc. (implementer of the small-grants mechanism) and the International Organization for Migration (final phase of a community stabilization program and the re-integration of ex-combatants project).

US Financing in Thousands of Dollars