Tomas Freitas - Timor-Leste Country Risk Analysis

Timor-LesteCountry Risk Analysis:

A Macroeconomic risk

Tomas Freitas

Timor-Leste Country Risk Analysis

Outline

• Country & Economy Performance• Transparency and Accountability• Theoretical Framework • Economy Growth ( the elements of GDP)• Conclusion


Item weight SourcePopulation 1.2 Million NSD (2011)

Life Expectancy 62.5 year HDR (2011)

Child Mortality under five year old

56 Per 1000 live birth

HDR (2011)

Access Clean Water 35.7% HDR (2011)

Access to Education (Primary School)

90% MoF (2012)

Growth National Income 2,704 Million (USD) IMF (2010)

GDP Per capita $805 (USD) HDR (2011)

Real GDP Growth 9.5% ADB (2010)

Urban Unemployment 42% MoF (2012)

Rural Unemployment 80% MoF (2012)

Inflation 12.4% MoF (2011)

BOP (Current Account) 1,717 Million USD BCTL (2010)

Savings +10 Billion USD BCTL (2012)

Country & Economy Performance


Index Period Rank Score

Revenue Transparency 2010 12/40 70.5

Corruption Perceptions 2011 143/183 2.4/10

Judicial Independence 2010-2012 86/142 3.3/7

Rule of Law 2010 10% -1.2

Open Budget 2010 Minimal 34

Voice & Accountability 2010 49% 0.02

Control of Corruption 2010 18% 0.95

Human Development Report

2011 147/187 (Low)

0.495

Press Freedom 2011-2012 86/179 30.00

Timor-Leste Transparency and Accountability performance

Source: Transparency International http://www.transparency.org/country#TLS


http://www.transparency.org/country#TLS

Theoretical Framework • Macroeconomic

– Income Approach GDP: The total income earned by the household in a

nation during a year Total Income = Rent + Wages + Interest + profit

– Expenditures Approach GDP: the total amount spent on goods and services

in a nation by households, firms, government and foreigners

GDP = C + I + G + Xn) Timor-Leste Country Risk Analysis

GDP Growth

Source: IMF, World Economic Outlook


Fiscal Year ConsumptionBased on Consumer Price Index in Million US Dollar

Investment In Capital Asset (Million US Dollar)

Gov Exp in Health, Education, Agriculture, Infrastructure & Social Securityin Million US Dollar

Exports Imports Trade Balance

2004-05 107.5 - 52.3/79.0 105,645 146,108 -40,454

2005-06 107.5 - 46.1/112.0 43,451 109,127 -65,676

2006-07 120.0 - 142.9/328.6 60,685 100,802 -40,117

Transition 134.1 - 72.9/116.4 19,179 206,133 -186,954

2008 145.6 - 208.7/483.9 49,207 268,584 -219,377

2009 146.4 - 355.1/603.6 34,512 295,096 -260,584

2010 - 54 458.8/758.7 - - -

2011 - - 365/1,306.0 - - -

2012 - - 423.9/1,674.1 - - -

Elements Of The GDP


Sources: Ministry of Finance & National Statistic Directorate

Elements of Consumption

Source: National Statistic Directorate Data compiled from April 2011-April 2012 Timor-Leste

Country Risk Analysis

Government Expenditures


Sources: Ministry of Finance

Revenues contribution to State Budget

Source: Ministry of Finance Timor-Leste Country Risk Analysis

Merchandise Import of Major commodities

Commodity Value in US Dollar

Commodity Value in US Dollar

Vehicles (Cars & Motorbikes)

58,486,000 Construction materials 4,075,138

Rice 35,069,475 Tractors for Agricultures 3,186,171

Fuels 30,715,395 IT & Computers 2,972,124

Electrical Machinery(Heavy Fuel Generators)

25,198,000 Household furniture's 655,676

Aerials & Aerial reflectors, Boilers, Machinery

22,770,000 Medicines, Antibiotics & equipments

524,934

Alcohol & Tobacco 7,456,999 Vegetables, Fruits &Cooking oil

85,766


Source: National Statistic Directorate

Exports Commodity

Commodity Quantity (in Kg)

Value (in USD)

Coffee 9,941,963 8,290,612

Re Exports Heavy Containers

26,021,000


Source: National Statistic Directorate (2012)

Issues status Manatuto

in %

Dili

in %

Ermera

in %

Manufahi

in %

Food Consumption Less than adequate 32.0 27.7 71.3 28.9

Housing Less than adequate 27.7 23.1 62.6 45.4

Clothing Less than adequate 16.0 21.2 31.8 21.2

Health Care Less than adequate 19.2 15.1 56.2 22.5

Children education Less than adequate 22.2 28.4 54.4 20.2

Household income Less than adequate 69.0 56.2 86.8 69.1



Circular Flow


Timor-LesteCircular

Flow

Conclusion

• Timor-Leste economy is high risk because:– There are no factors of production.– There are no alternative commodities to export

except coffee.– The private sector relies on government projects.– Government revenue depends on oil.– There is no legal protection for local food

production.


Business

Tomas Freitas - Timor-Leste Country Risk Analysis