The global COVID-19 pandemic has captured worldwide attention, and Timor-Leste is no exception. The disease has captured public attention in the country over the last five months, as there is nationwide recognition that the pre-existing public health system would not be able to cope with it.
The first case of COVID in Timor-Leste was confirmed on March 21. Less than a week later, on March 28, a state of emergency was declared by President Francisco Guterre, better known as Lu-Olo, and renewed again on April 24. The state of emergency provides constitutional basis for the government to take some restrictive measures, including the suspension of nonessential public activities, school activities, public gathering, and public transport, and close its borders. The state of emergency was renewed again on May 28 for another month. This time, the government adopted some more flexible measures, including allowing school activities, while strengthening border control, particularly along the border with Indonesia. The government’s measures have been described as “progressive and proportionate” to adapt to rapidly changing threats.
Timor-Leste’s strategy relies on early intervention and a mandatory quarantine. Particular attention was given to returning Timorese from overseas. The mandatory quarantine has helped the health authorities to monitor them and prevented the virus from spreading to the wider community. This was a necessity, as the existing system cannot respond to a public health emergency.
Timor-Leste’s strategy has brought some positive outcomes. All cases – mostly imported from Indonesia via returning Timorese students — were identified before reaching the community. This helped to prevent wider community transmission. Timor-Leste has not reported new cases since April 24 and as of May 15 there are no active cases of COVID-19 — all patients have recovered. So far, there have been no fatalities reported.
The capacity of the national laboratory to perform COVID-19 tests has also been improved. Unlike in previous months, where the lab had to confirm tests results in Darwin, now it can run the test independently. Since early March, it has carried out more than 1,500 tests, an average of one test for every 8,600 persons. Currently, the health authority has expanded its monitoring system to the other municipalities through the “Sentinel Surveillance” system. A public campaign is being undertaken to educate Timorese on hygiene and physical distancing measures.
As seen in other countries, however, the social and economist costs of the state of emergency are high. Many businesses had to downsize or close their business either permanently or temporarily as there is no income. Consequently, they also had to lay off some of their workers. Daily media coverage points to the fact that many Timorese are losing their income and economic activities due to the state of emergency.
This is a divisive issue, reflected in the Parliamentary vote on the president’s request to renew the state of emergency. Parliament members from the Conselho Nacional da Reconstrusaun Timorense (CNRT) — the party with the second largest share of seats in the Parliament — voted against the request, arguing that the economic cost of that strategy is high. The dilemma that COVID-19 poses to policymakers around the world is how to strike a balance between the policy response to a public health emergency and the economic consequences. Timor-Leste is not a unique case in this regard.
As seen around the world, COVID-19 and the state of emergency worsened the social and economic conditions that already existed. Timor-Leste’s economy was already in recession before COVID-19. Prior to the pandemic and the state of emergency, Timor-Leste already had multiple problems such as serious hunger and malnutrition, very few formal and secure jobs, and a high poverty rate.
These has been the dominant issues in Timor-Leste over the last two months, since the implementation of the state of emergency. The immediate and spontaneous response was solidarity from the people, evident in terms of distributing food items to the most needy families. This, to some extent, helped the poorest Timorese meet their immediate needs when the government’s response is constrained by its administrative capacity and lack of data.
Nonetheless, national statistics give some indicators of economic resilience. Although there was worry about the impacts of a disrupted global supply chain on domestic consumption, at this point, this has not been an issue. The inflation rate between January to March remained stable and there is no strong indication of a decline in imports. Until now, Timor-Leste has not experienced “panic buying” at the level seen in other countries.
The government also adopted an economic stimulus package worth $142 million, equivalent to 10 percent of GDP. As described by Minister for Legislative Reform and Parliamentary Affairs Fidelis Manuel Leite Magalhães, the stimulus is meant to reinforce the public health measures that are in place, including physical distancing measures, while at the same time protecting vulnerable households and the business sector. In other words, this is not a package that will lead to economic recovery, but more of a short-term measure to prevent the worst social and economic crisis, which could spread to other aspects.
The biggest part of this stimulus is the subsidy for households with an income below $500 per month. Injecting cash at the household level would have immediate impacts on their consumption level, and prevent vulnerable Timorese from falling deep into poverty in the short term. This also would have multiplier effects for the informal economy in rural areas as well as in Dili. This could provide the basis for the economy to recover.
Despite Timor-Leste’s early, decisive, and timely response, the situation is quite fragile, volatile, and uncertain. As scientists around the world race for a vaccine and treatment, no one is certain how long the global pandemic will last. As cases spike in its closest neighbor Indonesia, the worry is that COVID-19 could spill over into Timor-Leste. Although the government has barred the foreigners from entering the country, there is a high possibility of illegal entry through the land border. Therefore, Timor-Leste’s government and society in general need to take precautions and be vigilant about a possible outbreak anytime. Community transmission would still be a catastrophic situation for the country; therefore, preventing community transmission should remain the top priority. Expanding public health capacity to respond to the outbreak should remain the main policy objective.
On the economic side, while the government’s short-term approach focused on the demand side, long-run intervention requires increasing domestic production capacity, restructuring the economy and its production factors. This would not be an easy task, but requires intervention in various areas.
Guteriano Neves is an independent policy analyst based in Dili. This piece does not represent any institutions that the author is affiliated with.