Evaluation of Australian aid to Timor-Leste Office of Development Effectiveness June 2014 © Commonwealth of Australia 2014 ISBN 978-0-9874848-1-9 With the exception of the Commonwealth Coat of Arms and where otherwise noted all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia (http://creativecommons.org/licenses/by/3.0/au/) licence. The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3.0 AU licence (http://creativecommons.org/licenses/by/3.0/au/legalcode). The document must be attributed as Office of Development Effectiveness, Evaluation of Australian aid to Timor-Leste, ODE, Canberra, 2014. Published by the Department of Foreign Affairs and Trade, Canberra, 2014. This document is online at www.ode.dfat.gov.au Disclaimer: The views contained in this report do not necessarily represent those of the Australian Government. For further information, contact: Office of Development Effectiveness Department of Foreign Affairs and Trade GPO Box 887 Canberra ACT 2601 Phone (02) 6178 4000 Facsimile (02) 6178 6076 Internet www.ode.dfat.gov.au Cover: Isabella Dacavarhlo maintains her family’s peanut and sweet potato crop while her husband in away in Dili. Isabella is joined by her daughter Elvita Bendita Da Seus Soares who is 7 years old and studies in class 1. Isabella is part of a Seeds of Life support group who received training in effective methods of planting, maintenance and post-harvest. Isabella lives in Salary village, Laga SubDistrict, with her husband and their 6 children. Photo: Conor Ashleigh, Australian Centre for International Agricultural Research. Office of Development Effectiveness The Office of Development Effectiveness (ODE) at the Department of Foreign Affairs and Trade builds stronger evidence for more effective aid. ODE monitors the performance of the Australian aid program, evaluates its impact and contributes to international evidence and debate about aid and development effectiveness. Visit ODE at www.ode.dfat.gov.au Independent Evaluation Committee The Independent Evaluation Committee (IEC) was established in mid-2012 to strengthen the independence and credibility of the work of the ODE. It provides independent expert evaluation advice to improve ODE’s work in planning, commissioning, managing and delivering a high-quality evaluation program. Foreword As chair of the committee that oversees the Office of Development Effectiveness, I have a direct interest in all their evaluations, but I had a particular interest in this one. When I was Vice President for East Asia and the Pacific with the World Bank from 2007 to 2012, I was responsible for the bank’s program in Timor-Leste, and worked closely with Australia. I am pleased to say that the story told by the evaluation about Australia’s assistance to Timor-Leste resonated strongly with my own experience during the period it covered. First, the report correctly underlines the unique challenges faced by Australia. As a close neighbour and the largest aid donor, Australia was bound to be the ‘go-to’ source for help. The need to build a functioning government was urgent, so I was not surprised that staff tried to be as responsive as possible. Unfortunately, the by-product of this responsiveness was that staff became involved in too many different things; this subsequently became a management problem for Australia. This was also a problem for Timor-Leste, which had to deal with a large number of donors. In the words of Minister for Finance Emilia Pires: ‘there were many cooks in the kitchen, all baking different kinds of cakes’. Second, the report captures the implications of the resource boom in Timor-Leste and the challenge the Timor-Leste Government faced in managing it. I can personally attest to the critical role Australia played in helping the Timor-Leste Government to manage the budget implications of this boom. Finally, and consistent with the Timor-Leste Government’s improved budget position, the report captures the increasing confidence and capacity of the Timor-Leste Government to communicate its aims and expectations and effectively lead the international donor effort. In my mind, this has played no small role in the increasingly mature relationship between the Australian aid program and the Timor-Leste Government over the period covered by the report. The lead role Timor-Leste has taken in g7+, driving the New Deal for Engagement in Fragile States (a grouping it does not have to be part of) reflects this new confidence. In my 40-year career in international development I have not encountered many development challenges greater than the one faced by Timor-Leste at its independence. It is gratifying that such significant progress has been made, in spite of the setbacks. Credit for this rests substantially with the Timor-Leste Government and its population. However, the international community played an important and effective role as well. The evaluation’s account of Australia’s role should be of value to people with an interest in Timor-Leste, but particularly for those seeking to understand and learn from the strengths, weaknesses and limitations of international assistance in post-conflict settings. Jim Adams, Chair of the Independent Evaluation Committee iii Contents Foreword ................................................................................................................... iii Acknowledgments ..................................................................................................... vi Executive summary .................................................................................................... 1 1 Introduction ...................................................................................................... 9 1.1 Context .................................................................................................. 9 1.2 Aid and the economy .......................................................................... 10 1.3 Australia’s relationship with Timor-Leste ............................................. 11 1.4 Evaluation objectives and scope ......................................................... 15 1.5 Methodology........................................................................................ 15 1.6 Report structure .................................................................................. 16 2 Country strategy development ....................................................................... 17 2.1 Introduction ......................................................................................... 17 2.2 Quality of planning for aid to Timor-Leste ........................................... 17 2.3 Operationalising aid policies................................................................ 21 2.4 Conclusion .......................................................................................... 23 3 Country strategy implementation ................................................................... 25 3.1 Introduction ......................................................................................... 25 3.2 Increasing selectivity of aid ................................................................. 25 3.3 Improving coordination and harmonisation ......................................... 28 3.4 Improving alignment ............................................................................ 33 3.5 Conclusion .......................................................................................... 37 4 Resourcing country strategy development and implementation ..................... 39 4.1 Introduction ......................................................................................... 39 4.2 Adequacy of resourcing ...................................................................... 39 4.3 Corporate planning and supervision .................................................... 41 4.4 Conclusion .......................................................................................... 43 5 Results of Australian aid in Timor-Leste ........................................................ 45 5.1 Introduction ......................................................................................... 45 5.2 Strengthening service delivery ............................................................ 45 5.3 Increasing agricultural productivity and employment ........................... 50 5.4 Improving government accountability, transparency and integrity ....... 56 5.5 Building the foundations for a safer community................................... 58 Acronyms and abbreviations .................................................................................... 62 References ............................................................................................................... 63 v Acknowledgments The evaluation was conducted by a team from Sustineo Pty Ltd and staff from ODE. It was led by David Carpenter (Sustineo) and David Slattery (ODE). Louisa Dow (ODE) was the evaluation manager and Debbie Bowman (ODE) provided oversight. The evaluation team would like to thank the Timor-Leste Government, past and present Timor-Leste program and other staff, the Australian Federal Police, and the Australian Centre for International Agricultural Research. Authors (in alphabetical order) David Carpenter (Sustineo) Louisa Dow (ODE) Stewart Norup (Sustineo) David Slattery (ODE) vi Executive summary Introduction On 30