Voices of a Better Normal

Voices for a Better Normal #1: Reimagining Decentralization Policy in Timor Leste

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Alexandre Rosa Bruno

Alexandre Rosa Bruno Sarmento is a Timorese and has
worked in various organizations in Timor-Leste. He has led and coordinated
several studies related to rural development and environment including
decentralization. The views expressed in this article is fully his own and
does not, in any manner, represent the institutions/programs he may be
associated with. He can be reached at

recent parliament discussions on local power and municipal election put
decentralization under intense scrutiny, decentralization policy remains less
at the forefront of broader public debate in Timor-Leste. This article seeks
to unmask the current policy by revealing realities faced by its biggest city
of Dili. 
In 2015, Dili, the capital city of the half-island state,
had a population of 268,005 inhabitants (excluding Atauro island). This
number represents 23% of the population of the country. Towards the end of
2022 (based on preliminary census data), the number of Dili residents soared
to 324,296, with an additional 56,264 people. This roughly equates to 8,000
new residents being born and/or settling in Dili every year. This figure
further represents an annual population growth rate of nearly 3%, the highest
of all municipalities. As Dili’s population is increasing, other
municipalities like Viqueque are shrinking, percentage wise (in spite
Viqueque’s nominal increase in overall numbers). Furthermore, this population
trend has seen increase in urbanization of Dili’s rapidly rising, and
sometimes uncontrolled, population growth. 
Although Timorese population is predominantly rural, the
upsurge of human inhabitants in the city has in turn, triggered even bigger
demand for basic rights and services that often can only be delivered by public
institutions.  Almost on daily
basis numerous Dili residents have been complaining about lack of running
water, unreliable electricity, dilapidated public infrastructure, long line
of queues in obtaining public services and particularly inadequate land to
build their houses on. In certain suburbs, there are already some residents
building their homes one on top of another. This lack of
space has been exacerbated by sea level rise of 9mm annually since 1993,
(Pacific-Australia Climate Change Science and Adaptation Planning
Program 2015
). Furthermore, according to recent ADB report (Solid
Waste Management in the Pacific Timor-Leste Country Snapshot, June
), Dili produces 18,564 cubic meters of waste per day.There is
also a proliferation of house construction on hillsides surrounding the city.
Many of these houses are built on slopes that are unstable and evidently
vulnerable to landslides during heavy downpours. Still, many more are built
along flood-prone riverbanks. If this uncontrolled building continues
unabated, Dili is poised to become home of a new generation of slum dwellers,
with all the associated problems of disadvantage and potential illegality and
criminality.Restriction in general population movement to and from major
cities like Dili due to Covid-19 pandemic (school closure and physical
distancing), have further complicated the smooth implementation of programs
that have been delegated to municipalities. Livelihood activities specially
of urban poor were hardly hit. Students’ education has also been immensely
affected This is compounded by the country’s limited technological support
for virtual learning. (Socio-Economic Impact Assessment of Covid-19
in Timor-Leste, Round 2, 2021
). On 4th April
2021, after days of endless rains, floods occurred throughout the country.
Dili was not spared. Numerous shanty houses on the hills were swept away as
expected, as were those built along the riverbanks. More than 40 people were
reportedly killed or missing. Those who survived, abandoned their houses, and
sought refuge in makeshift camps. In total more than 31,000 households were
affected throughout the country of which 82% are in Dili. Search and rescue
efforts were overwhelmed by the sheer scale of the calamity (UNICEF
Timor-Leste 2021 Floods Response Report). To curtail the
spread of illegal occupation of public land, the government has occasionally
resorted to eviction. The evicted families received compensation to return to
their villages. However most, if not all of them, simply relocated to other
parts of the city. The government has neither effective policies nor
resources to control this trend, leading to a spiraling cycle of evictions and
removals. The urban homeless are not motivated to return to their original
rural homes. In their villages, there is less opportunities for paid
employment and most have insufficient skills and resources to set up their
own businesses or farms.Although this problem is relatively minor in scale in
comparison to other mega cities in the region, it does pose a problem for
policy makers. 
One of the solutions could be effective decentralization. Decentralization
is a set of policies that delegates competencies and financial investments of
public services from central government to sub national governments or
autonomous agencies or even to private sector. According to World Bank, what
motivates governments to decentralize varies. It can be due to the need to
accelerate economic transformation, to reinforce transition to democracy, to
ease local tension or a combination of all these factors. In many countries
the main aim of decentralization is to enable decision making process and to
provide public services faster and closer to local communities particularly
in remote areas. 
(James Manor, “The Political Economy of Democratic
Decentralization” World Bank Washington D.C. 1999
)  Decentralization
is not new in Timor-Leste. During the Indonesian occupation (1975-1999),
selected socio-economic decision-making functions were devolved to local
municipal government. Municipal assemblies known then as Dewan
Perwakilan Rakyat
or DPR, functioned both at
provincial and municipal levels with relatively sufficient funding awarded to
them to implement local policies and programs. 
Timor-Leste gained independence (2002), some progress towards a decentralized
state has been achieved with the creation of the territorial division law in
2009 (Decree Law No.11/2009). In its efforts to devolve
more power to local government, the government adopted a new administrative
decentralization in 2016 (Decree Law No. 03/2016).  This brought
considerable changes to municipalities. Municipal government was restructured
and for the first time, funds were allocated directly to municipalities.
Although rural-urban migration in other countries is almost always a natural
phenomenon, when implemented correctly, decentralization can be a powerful
tool for local employment creation which may help halt the trend. Under the current
framework, municipalities can implement key programs that include among
others, education, health, agriculture, public works and water and
sanitation. The municipalities can also implement infrastructure projects up
to half a million dollars. Current decentralization policies enable
municipalities to procure basic services in health sector such as maintenance
of ambulances and fuel for vehicles. In education sector, municipalities can
offer meals in schools under their jurisdiction and implement school
infrastructure improvement projects. However
delegated functions have been thwarted by insufficient funding. Recent
decentralization reviews (Organizational and Functional Analysis of
Municipal Structure and Decentralized Municipal Budget Analysis, June
) have pointed out that funding to municipalities were merely
adequate to cover salaries and travel costs for employees. Implementation of
programs that produce tangible benefits to local communities remains to be
seen. While this can be explained by successive years of political deadlock
compounded by the effects of Covid-19 pandemic and natural disaster,
municipalities find it hard to comprehend why many planned activities remain
unfunded by the central government. Central
government’s treatment of sub-national governments across the country have
been uneven, to put it mildly. Many municipalities on the mainland receive
much less budget than their counterparts in the enclave of Oe-Cussi and
Atauro island. In the 2023 state budget, Oe-cussi alone received $120 million
USD which is almost twice as much as the budget of all 12 other municipalities
combined. Surprisingly, Dili, the biggest municipality by population, has the
smallest budget allocation per capita in 2023.  This
favoritism obviously creates regional imbalance and tends to breed social
jealousy. Resentment over this disproportionate treatment has been expressed
by municipal authorities but they have been largely ignored.Despite local
competencies, overlapping and lack of coordination of activities between
national and sub-national government continue to occur. The current
decentralization program is weak, in that, it allows central government to
voluntarily relinquish and retrieve its promises to local government at its
discretion. In addition, there is also lack of clarity on various program
implementation at all levels. Multiple decentralized programs are only
prescribed in paper but are not seriously implemented in reality. One explanation
for this is that the Central government wants to retain power and status quo
by controlling financial resources. This becomes apparent in the continued
reluctance of the central government to allocate sufficient funding to
municipalities, for example, in agriculture and public works sector. This
lack of funding is coupled with the fact that human capacity building
programs remained stagnant. Furthermore, there is often confusion between the
division of labour between national and sub-national governments.
Municipalities have often complained about overlapping of program
implementation. All these reasons combined can potentially make
decentralization programs counter-productive to socio-economic progress in
municipalities. Moreover,
there has been no feasibility studies carried out to determine what levels of
capacity exists in different municipalities to indicate what programs
municipalities can deliver efficiently and effectively. Current
decentralization policies and programs seem to have been implemented based on
study tours to foreign countries. The decentralization strategy was less
tailored to the needs of local communities.  Furthermore,
there is no strong evidence to support that Timorese public had been
adequately consulted.  The current
decentralization framework was largely based on hasty consultation with
elected politicians who may have been motivated merely by sectarian interests
than sound socio-economic analysis. The current decentralization policy seems
to be mainly political in nature with the view of strengthening local
democratic institutions and less on creating economic opportunities.There is
only one decentralization law that is applicable to all municipalities,
(excluding Oe-Cusse but including Dili), without consideration given to
unique socio-economic conditions that individual municipalities may possess.
Municipalities should have been clustered according to their common
characteristics in agricultural production or geographic landscape.
Allocation of financial resources need to be customized to the unique and
specific needs of each municipality and based on their capabilities to
implement them. Not all programs should be decentralized to all
municipalities as not all municipalities have the same capacity to implement
them.The current decentralization framework needs to be thoroughly rethought
and reconfigured if necessary. Creating decentralization legal framework
should be preceded by a comprehensive local governance policy that was
aligned with real needs of people and their communities. The laws must then
be accompanied by clear implementation guidelines, laws that are common to
all and yet flexible enough to allow municipalities to rediscover their
unique potential for creating their own socio-economic vibrancy. Allocation
of funding should follow this basic rule to ensure the most efficient use of
dwindling petroleum resources. Dili, by virtue
of its proximity and home to national government offices, must not be treated
in the same way as other municipalities. Dili’s population is more than six
times the size of other municipalities and as such it deserves a special
decentralization regime. Public investment
should be proportionately granted to municipalities according to their
socio-economic potential. When proportionate investment is applied in
municipalities, it will stimulate economic activities that pave the road for
preventing further internal migration to Dili. Dili will gradually become
less congested and the strain on infrastructure and services reduced. Against the
backdrop of the government’s projection of an imminent fiscal cliff and
declining resources, a carefully well thought decentralization policy should
be a strategic imperative for government, otherwise the decentralization
silver bullet may as well miss the target.Bibliography: 

  1. Timor-Leste Population and Housing Census 2015:
  2. Timor-Leste Population and Housing Census 2022
    Preliminary Results: 
  3. Climate Change Science and Adaptation Planning Program:
  4. Solid Waste Management in the Pacific Timor-Leste Country
    Snapshot, June 2014:
  5. Government of Timor-Leste Decree Law No.11/2009 (LEI N.O
  6. Government of Timor-Leste Decree Law No. 03/2016
    (DECRETO-LEI N.º 3 / 2016 de 16 de Março)
  7. Organizational and Functional Analysis of Municipal
    Structure and Decentralized Municipal Budget Analysis, June 2022
    (commissioned by Australian Funded PARTISIPA Program) 
  1. Timor-Leste General State Budget
  2. Manor, James “The Political Economy of Democratic
    Decentralization” World Bank Washington D.C. 1999
  3. https://timorleste.un.org/en/170064-socio-economic-impact-assessment-covid-19-timor-leste-round-2-2021 
  4. https://www.unicef.org/timorleste/media/4581/file/UNICEF%20TL%202021%20floods%20response%20summary%202Feb2022.pdf 

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