Adviser salaries in Timor-Leste's Ministry of Finance

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Two stories, one in the local and one in international press, have been published about the salaries foreign advisers in Timor-Leste’s Ministry of Finance are paid. If you were on Twitter yesterday then you may have seen me babbling about something big about to come out. Well, this is it. Perhaps I’m overstating the significance of these stories, but when you see how huge the salaries are, you may change your mind.

The first story that came out is by Tempo Semanal, a local newspaper run by Jose Belo, who you may have read about for his disagreements with Justice Mininster Lucia Lobato. Tempo Semanal has published copies of the contracts of a number of foreign advisers.

Although the Tempo Semanal story makes some reference to nepotism, the report itself doesn’t offer any proof of this. However, what you do have are the salaries of people such as Canadian Michael Francino, planning and financial adviser to the Ministry of Finance. He earns a base rate of US$1,670 a day.

His total package, as far as I can tell, is for 10 months and it comes to US$589,449. Paul Toohey’s report in The Australian today highlights that Kevin Rudd earns AUS$330,000, or US238,000.

From Toohey’s story:

Former foreign minister Alexander Downer says the consultancy fees are "obscene", given that East Timor is the poorest country in Asia, where more than 50 per cent of the people earn about $US1 a day.

…It is the World Bank, in conjunction with East Timor's Finance Minister, Emilia Pires, which has approved the extraordinary consultancies. Ms Pires signs off on the contracts, which then go to the World Bank for final approval.

The World Bank's stated aim is to provide "financial and technical assistance to developing countries around the world".

Mr Downer says the UN never paid this sort of money when it was in East Timor, and still doesn't.

It’s being called a scandal and it raises a lot of issues. As you’d expect, the opposition FRETILIN party is all over this.

There are, of course, two sides to this story. Also from Toohey’s article:

Nigel Roberts, the World Bank's country director for East Timor, New Guinea and the Pacific Islands, says he accepts that the issue is important.

"I agree the optics here may look incongruous but addressing the pressing needs of the country at this stage in its development requires help from outside, given the very small number of experienced and qualified Timorese staff available.

"Using cheaper expertise isn't going to help develop the country. In an ideal world, this type of expertise would be provided on a voluntary basis, but unfortunately no employment market anywhere in the world works on this principle, and people don't discount their services when they work in places like Dili or Moresby or Honiara."

Perhaps the real question is whether these huge salaries are donor money well spent. Timor-Leste is a very poor country. Half of the population is below the poverty line. About 70% live in rural areas and this 70% accounts for the majority of the country’s poor. People live on less than a dollar a day.

This is a tricky one to call. Development takes time and it requires outside support. The money to pay these foreign advisers isn’t coming from the government, but from the World Bank, so this isn’t a question of government spending.

People are throwing around words such as “nepotism” and “corruption”, but I haven’t seen any solid evidence of either. All I have seen is that there are a lot of advisers earning a lot of money in one of poorest country’s in the world.

This is a big issue and there could be a significant fallout from it. Minister of Finance Emilia Pires recently released a statement:

You may also like to know that all the Foreign advisors plus some National (Timorese) local advisors within my Ministry are actually funded by the Foreigners' money. Make no mistake, this Government is aware that sometimes it is necessary to spend more in order to get results quickly. Sometimes we do not explain enough about what we are doing but that is because we are just too busy trying to get the results and improve the lives of our People.

Edit: I had pasted the wrong quote in above. Fixed now.

I think there will be more about this coming out over the course of the next few days and weeks. One thing to note is that the opposition recently announced that it will hold a "long march" some time in May or June. The long-awaited peace march of last year never happened, but with fodder like this that can be spun in so many ways, perhaps FRETILIN will be able to rally the masses from the districts.

I'm interested to hear people's thoughts on this matter.

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11 thoughts on “Adviser salaries in Timor-Leste's Ministry of Finance

  1. I know it sounds outrageous, but I think it's only because you don't know about average salaries for these things around the world. I live in San Francisco, and the police and firemen generally make over $100,000 per year. When they consult, it's $800 per day. So when UN types consult in Timor on a daily basis, it's $1000 per day. No surprise there. This is the real world, almost beyond our comprehension. Do you regret you didn't join this gravy train soon after college?

  2. Indeed. I'm still undecided here. It is certainly not uncommon for people to be making 5-10,0000 a month here in Timor-Leste. However, this is well known.

    What is less well known is that there are a significant number of people earning 200, 300, 400, 500k for advisory positions. Here's an extract from the story:

    Mr Downer (former foreign minister) says the UN never paid this sort of money when it was in East Timor, and still doesn't.

    "It is obscene," he says. "These are aid programs; that's how the money gets there. I'm absolutely astonished. I know about these sorts of salaries and I know how much the UN pays.

    So that's the former Aussie foreign minister, and he's as surprised as I am. Surely he of all people would know about average salaries for these things.

  3. I wonder how much of Michael Francino's consultancy fee is divided amongst his dear friends? It would be more appropriate to publish his contractual terms and see whether he meets any of the key targets that justifies his fat cat salary. I wonder how much 'Steve Brack' is getting? Maybe he is helping the Timorese from the 'bottom of his heart'……

  4. You will find that a closer look at the contracts shows that the Minister hired several of her friends on 6 figure salaries, at least two of which have not even finished University. So much for world class advice as provided by the Worldbank.

  5. Yes, I've been hearing about that today. I really think that should have been the angle of the story. The focus should have been on whether these individuals are qualified and, even if they are, whether they are worth the money being spent.

    There is certainly an issue of privacy being breached here as those contracts are in the public domain. Are they all overpaid? Are they all unqualified?

  6. Privacy?…no such thing in Timor-Leste. That's why most of can't believe that some people are actually being jailed here for accessing 'privacy' information. Really scary!

  7. Now you can wonder why some in the U.S. and a few other western nations criticize the huge U.N. & supranational agencies' budget deficits. Just look at the Red Cross which at one time had spent close to 90% of its incoming funds on existing administration & maintenance fees.

  8. I do believe that so far something wrong with the performance of a Current Ministry of Finance, she brought many of her friends to become an Advisor in her Office, this is what we called a nepotism and conspiration. I don’t know why World Bank Timor Leste would accepts and falling down into this conspiration? This was contained a Hundreds of questions that need to be investigated! The Donators institutions should be aware and put more attention on this issue and perhaps shall also take any serious action to stop this bloody attitude. The donators institution should form or establish an international auditor team to investigate and evaluate the performing of World bank Timor Leste and Ministry of finance, I was considered this attitude same as a Genocide. The funding for the development of Timorese people are installed, its bring us to the interpreter a full meaning that Timorese people are suffered because they are never getting their right as what has been expected or targeted by an International Donators. And It will step by step killing the people of Timor Leste, who are supposed to be happy enough and getting the living and life in good condition/standard.

    Thank you very much any one that take care of this Conspiration Issue.

  9. Francino was a career public finance civil servant in Canada for 29 years before becoming a consultant; it's all searchable on Google. He first worked in Timor within the UN transitional government. He was requested back both for his extensive expertise and prior knowledge and experience in Timor Leste. He was part of a team of 190 people (the vast majority of whom were Timoreses) who drafted the first budgets following Timor's referadum, in which the government paid for electricity for everyone for roughly two years. I can't debate the fiscal merrits of this approach but surely we can agree this wasn't about greed at the detriment of the Timorese living on a $1/day.

    His salary fell well within the range for the type of consulting work he did. These consultants don't have residency anywhere and therefore have no access to public services such as health care, which those of us (USians not included) take for granted. That all has to come out of their pockets so predictably these consultants want salaries to afford the true cost of doing their work. I'm not claiming they couldn't afford to be paid less, but it's not as simple as calculating what a consultant with permanent residency and access public services can expect to earn either.

    Some things are very wrong and I'm certain corruption abounds. To me that's highlighted by the laugheable media coverage that followed the assassination attempts on Ramos-Horta. Another thing is explaining how Billions of dollars in profit from Timor's offshore oil hasn't translated into new roads, hospitals, school renovations and other public infrastructure improvements. But neither of those is explained by consultant salaries, however we may feel about them.

  10. How much is the monthly salary in USD for a Project Management Advisor within Ministry of health in Timor Leste? What would be ideal figures?

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