There was a very interesting story in the NYT/IHT this week about the World Bank coming out and admitting that it has been partly to blame for the slow progress in Timor-Leste. It really highlights the difficult balance donors face in trying to give countries what they need while ensuring that the money doesn't go to waste, and this is something I've covered in my stories about the g7+ grouping of fragile states.
Some key excerpts from the article:
The World Bank delayed the opening of four desperately needed hospitals for a year because it adhered too rigidly to its own procurement rules. This was in a country where the child mortality rate was among the highest in Southeast Asia, life expectancy was barely over 55 and there had been “a total breakdown of the health care system.”
Efforts to support education were unsatisfactory. On the positive side, the bank helped build and repair schools. But, at the request of the new government, which was trying to dismantle the Indonesian education system, it distributed teaching materials in Portuguese. This had been the main language of instruction before the Indonesian occupation, when Timor was a Portuguese colony, and the new government restored it as an official language along with Tetum, an indigenous language. But Portuguese was spoken by only 5 percent of the population, and few younger teachers could understand the materials.
The report asserts that, at the urging of the bank which provides loans to developing countries with an explicit goal of fighting poverty East Timor saved too much of its precious petroleum revenues rather than spend them on social projects, an approach that contributed to needlessly high levels of poverty and unemployment.
Poverty, already at twice the rate of Indonesia, “rose significantly through most of the evaluation period and declined only after 2007, when the government, against bank advice, increased its spending using petroleum resources,” the report states.
The bit that I've highlighted seems to me to be the most important section. It was only after 2007, when government spending increased, that poverty finally began to drop.
Here's a comment from Fretilin lawmaker Jose Teixeira, taken form Facebook:
The World Bank coordinated the East Timor Fund and then the Transitional Support Fund, from where the donor funding for the national budgets during that time were administered. The government was at the beck and call of the Bank and donors… budgets having to be approved by the development partners' meetings prior to being taken to the national parliament for approval.
And one from L'ao Hamutuk's Charlie Scheiner:
It's nice to see the WB finally recognizing some of the many problems with its projects here during the last decade. Eight years ago, La'o Hamutuk was writing about this: see, for example, one 2002 article about the CEP program, link here.
Of course, nobody should underestimate the challenges that Timor-Leste posed back in 1999. It was an "empty shell" with zero infrastructure and no semblance of government. There weren't even any judges in the country and the numerous shortcomings of the UN mission really emphasised the problems that came with trying to build a state near enough from scratch. You have to wonder: how different would things be in Timor-Leste if everyone were to do it all again?