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Timor-Leste and the Millennium Challenge Corporation

26 June 2010 updated 8 July 2010

In May 2010, the government of Timor-Leste signed an agreement with the Millennium Challenge Corporation (MCC), a U.S. government agency, for a $10.5 million, three-year "Threshold Grant" to improve childhood immunization and combat corruption in Timor-Leste. This web page contains historical background, as well as information about that agreement, the anti-corruption program and links to relevant documents. Another page describes the jobs currently being offered for MCC-funded anti-corruption work in Timor-Leste.

Ligasaun barak iha textu tuir mai iha lian Ingles, laiha versaun Tetum.

Iha Maio 2010, Governu Timor-Leste asina akordo ida ho Millennium Challenge Corporation (MCC), ajensia Estadus Unidus da America (EUA) nian ida, ba tokon $10.5, “Tama Fatin” – katak Timor-Leste seidauk elijibel kompletamente atu simu osan hosi MCC – ba tinan tolu nian atu hadi’a imunizasaun ba labarik no atu kombate korupsaun iha Timor-Leste. Pagina ida ne’e komposto hosi informasaun istoriku, no mos informasaun kona ba akordo ne’e, programa kontra korupsaun no ligasaun ho dokumentu relevante sira. Pajina ida seluk descreve kona ba servisu ne’ebe agora dadaun ofrese hela ba iha programa kontra korupsaun iha Timor-Leste, ne’ebe hetan fundus hosi MCC.

Historical background

A few years ago, Timor-Leste hoped to get more than $300,000,000 in U.S. assistance to construct local infrastructure under the MCC program. Eligibility for such MCC funding depends on some annual indicator scores which MCC uses to decide which countries qualify for that level of assistance. The MCC announces its annual scorecard near the end of the previous year, based on indicators calculated by other organizations, as listed in the table below. Scores are compared with other countries in the same income category, and MCC only supports countries when most of their scores are better than the average (median) for countries in their category.

After being selected for intermediate "threshold" status in 2004, Timor-Leste first qualified for full MCC funding in early 2006, but the process of negotiating an agreement (called a "compact") between Dili and Washington was never completed, due to the "crisis" and the change of government in Dili. For background and context, see Timor-Leste Seeks Millennium Challenge Funding from Washington written for ETAN in October 2008.

MCC tabulates new scores every October, which are labeled with the follow year's number because the U.S. Fiscal year (FY) starts in October of the previous calendar year. When FY2008 figures were announced at the end of 2007, Timor-Leste's indicators (particularly the one on controlling corruption) had fallen below the levels MCC requires for compact eligibility. However, U.S. Ambassador Hans Klemm and the Timor-Leste Government were able to persuade the MCC to bend the rules, and Timor-Leste remained eligible for another year, although compact negotiations were not completed. As scores dropped further for fiscal 2009, the Ministry of Finance tried to persuade MCC that they were serious about controlling corruption (see MoF 2008 Annual Report), but the MCC board ruled that Timor-Leste was no longer compact-eligible. [Reference: Fact sheet on MCC decision-making process.] At the end of 2008, Timor-Leste lost its eligibility for a compact but was accepted for "Threshold" status which provides a smaller level of funding to help the country improve its scores.

Timor-Leste was considered a Low-Income Country (LIC). However, due to the inflow of oil money which raised our per capita income above $1,855, Timor-Leste moved into the Lower Middle Income Country status in 2010. Comparing Timor-Leste with less poor countries made its percentages lower, and caused Timor-Leste to fall below the median passing score for Girls Primary Education Completion, making it more difficult to qualify for compact eligibility.

In the table below, green indicates when Timor-Leste passed the scores, yellow is when the rules were bent, and red indicates when Timor-Leste did not pass.

Istoria Dahuluk

Tinan hirak liu ba, Timor-Leste espera atu hetan osan $300,000,000 resin hanesan asistensia EUA nian atu konstrui infrastrutura lokal iha programa MCC nia okos. Elijibilidade ba fundus MCC nian ida ne’e depende ba rezultadu indikador annual balu, ne’ebe MCC usa atu desidi nasaun ida ne’ebe mak qualifika ba nivel assistensia ida ne’ebe. MCC anunsia ninia rezultadu kada tinan wainhira tinan ida antes besik remata, baseia ba indikador sira ne’ebe kalkula hosi organizasaun seluk, hanesan lista iha tabela iha okos. REzultadu sira ne’e kompara ho nasaun seluk iha kategoria rendimentu hanesan, no MCC supporta deit nasaun sira wainhira rezultadu barak diak liu kompara ho median ba nasaun sira ne’ebe tama sira nia kategoria.

Depois hetan seleksaun ho status hanesan “Tama Fatin” intermediariu iha 2004, Timor-Leste, ba dala uluk hetan qualifikasaun atu hetan fundus masimu iha inisiu 2006, maibe Dili no Washington nunka kompleta prosesu negosiasaun ba akordo ida (hanaran "kompaktu") tanba “krize” no mos mudansa governu iha Dili. Atu hetan informasaun dahuluk no kontextu, hare Timor-Leste buka Fundu Millennium Challenge hosi Washington, hakerek ba ETAN iha Outubru 2008.

MCC tabula rezultadu foun kada Outubru  no labela ho numeru tinan tuir fali tanba tinan Fiskal EUA nian komesa iha Outubru hosi tinan kalendariu antes. Wainhira figura tinan fiskal 2008 anunsia iha tinan 2007 nia rohan, indikador Timor-Leste nian (partikularment ida ne’ebe kona ba kontrola korupsaun monu tia ona iha nivel requirementu MCC nia okos atu ba hetan elijibilidade ba kompaktu. Maibe, Ambassador EUA nian iha Timor-Leste, Hans Klemm, konsege persua MCC atu hakle’uk regulamentu, no Timor-Leste kontiua iha elijibilidade ba tinan ida tan, maski  negosiasaun kompaktu seidauk kompleta. Hanesan rezultadu monu liu tan ba tinan fiskal 2009 nian, Ministeriu Finansas tenta atu persua MCC katak sira serio kona ba kontrola korupsaun (hare Relatorio Annual 2008 Ministeriu Finansas nian), maibe Board MCC nian decidi katak Timor lai sai tan hanesan nasaun ne’ebe iha eligibilidade ba kompaktu. (Referensia: Faktus kona ba prosesu halo decisaun MCC nian). Iha tinan 2008 nia rohan Timor-Leste lakon ninia eligibilidade ba kompaktu ida, maibe simu hanesan status “Tama Fatin” hodi hetan fundus ki’ik oan liu atu ajuda nasaun ne’e lori hadi’a ninia valor.

Uluk,Timor-Leste konsidera hanesan Nasaun ho Rendimentu Okos. Maibe tanba hetan rendimentu hosi osan mina, ne’ebe aumenta rendimentu per capita liu $1,855, Timor-Leste muda ba status nudar nasaun ho rendmentu Medio Kraik liu iha tinan 2010. Kompara Timor-Leste ho nasaun sira ne’ebe la dun kiak, halo Timor-Leste nia persentagem tun liu, no kausa Timor-Leste tun liu ba median nia okos, liu valor ba Remata Edukasaun Primaria ba Labarik Feto Sira, diffikulta liu tan Timor-Leste atu hetan kualifikasaun ba elijibilidade kompaktu nian.

Iha tabela kraik ne’e koor verde fo indikasaun wainhira Timor-Leste liu valor, kinur wainhira regulamentu hakle’uk, no mean fo indikasaun wainhira Timor-Leste la pasa.

Category / kategoria

Indicator / Indikador

Calculated by
Kalkulasaun hosi

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

Ruling Justly
Ukun ho Justu

Political Rights / Direitu Politika

Freedom House

84%

77%

76%

83%

76%

82%

62%

Civil Liberties / Liberdade Sivil

Freedom House

87%

81%

79%

74%

57%

63%

53%

Control of Corruption / Kontrola Korupsaun

World Bank Institute

72%

67%

89%

55%

43%

39%

21%

Government Effectiveness / Efektividade Governu

World Bank Institute

49%

47%

24%

35%

62%

38%

12%

Rule of Law / Estado Direitu

World Bank Institute

26%

27%

69%

73%

28%

19%

15%

Voice and Accountability / Lian no Akuntabilidade

World Bank Institute

89%

90%

88%

85%

65%

76%

76%

Investing in People
Investe iha povo

Immunization Rates / Nivel Imunizasaun

World Health Organization

20%

27%

10%

9%

15%

20%

15%

Health Expenditures / Gastus ba Saude

World Health Organization

65%

58%

91%

97%

97%

100%

94%

Primary Education Expenditures / Gastus ba Edukasaun Primaria

UNESCO

52%

62%

54%

94%

61%

93%

96%

Girls' Primary Education Completion / Labarik Feto ne’ebe Remata Edukasaun Primaria

UNESCO

 

 

 

 

 

50%

15%

Natural Resource Management  / Manajementu Rekursu Naturais

CIESIN and YCELP

 

 

 

25%

36%

46%

3%

Economic Freedom
Liberdade Ekonomia

Regulatory Quality / Qualidade Prosesu Regulasaun

World Bank Institute

13%

16%

68%

29%

16%

10%

6%

Land Rights and Access / Asesu no Direitu Rai

IFAD and IFC

 

 

 

 

 

0%

4%

Business Start-up / Komesa Bisnis

IFC

 

 

15%

13%

54%

73%

38%

Trade Policy / Politika Komersiu

Heritage Foundation

 

 

 

 

 

70%

52%

Inflation / Inflasaun

IMF WEO

58%

42%

76%

97%

79%

53%

61%

Fiscal Policy / Politika Fiskal

IMF, plus IMF WEO

97%

96%

100%

100%

100%

100%

100%

 

The 2010 scores were tabulated by MCC in October 2009 based on indicators calculated by other agencies during the previous 12 months. MCC published a Guide to the Indicators and Data Notes to explain the indicators they use and how they are compared with other countries. The graph at right shows how Timor-Leste's scores have changed over time; click on it to see it larger.

To become eligible for a compact again, Timor-Leste needs to pass Control of Corruption and at least one additional indicator in the "Investing in People" categories. In addition, the country must maintain passing grades in all indicators which were green in 2010.

Rezultadu 2010 nian ne’ebe tabula hosi MCC iha Outubro 2010 baseia ba indikador sira ne’ebe kalkula hosi ajensia sira seluk durante fulan 12 antes. MCC publika Mata dalan ida ba Indikador sira no Nota Data sira atu esplika indikador sira ne’ebe sira usa no oinsa sira kompara ho nasaun sira seluk. Grafiku iha sorin los hatudu oinsa valor Timor-Leste muda ona hosi tempu ba tempu; Click iha ne’e atu lori hare boot liu.

Atu hetan elijibilidade ba kompaktu tan, Timor-Leste presiza atu passa kontrola korupsaun and minimu aumenta tan indikador ida ba kategoria Investe ba humanu.” Aumenta tan, Timor-Leste tenki mantein ninia grau ba pasa nian iha indikador sira hotu ne’ebe marka ho verde iha 2010.

The May 2010 Threshold Agreement

After several months of negotiation, the Governments of Timor-Leste and the USA (through the Millennium Challenge Corporation) agreed on a "threshold program" designed to improve Timor-Leste's scores on the Control of Corruption and Immunization Rates indicators. This program is managed by USAID, and was announced by the RDTL Ministry of Foreign Affairs, Council of Ministers and the MCC. As required by U.S. law, MCC notified the U.S. Congress with a description of the program.

The program totals $10,496,000 over three years. Anti-corruption will get $5.2 million, immunization $2.3 million, and the remaining $3 million was added by MCC for Monitoring and Evaluation of the anti-corruption program.

Akordu “Tama Fatin” Maio 2010 nian

Liu tiha negosiasaun durante fulan hirak nia laran, Governu Timor-Leste no EUA (liu hosi Millennium Challenge Corporation) konkorda kona ba programa “Tama Fatin” ida ne’ebe dezeino atu hadi’a rezultadu Timor-Leste nian iha indkador kontrola korupsaun sira no imunizasaun. Programa ida ne’e maka maneja hosi USAID, no anunsia hosi Ministeriu Negosiu Estrangeiru RDTL nian, Konselho Ministro no MCC. Hanesan rekerementu hosi lei EUA nian, MCC notifika Kongresu EUA nian ho deskripsaun kona ba programa.

Programa ho osan hamutuk $ 10,496,000 ba tinan tolu. Kontra korupsaun sei hetan tokon $5.2, immunizasaun tokon $2.3 and restu tokon $3 sei aumenta hosi MCC ba programa Monitorizasaun no Evaluasaun kontra korupsaun.

Programming against Corruption

In September 2009, USAID released a new "Corruption Assessment for Timor-Leste, which informed the design of the MCC anti-corruption program. It provides country-specific information to supplement MCC's global 2007 Working Paper on MCC's Role in the Fight Against Corruption "Building Public Integrity through Positive Incentives".

Information about the upcoming MCC anti-corruption program in Timor-Leste began circulating in Washington circles in 2009, and several "beltway bandit" companies sent people to Timor-Leste to assess their opportunity for getting the contract. Under USAID procedures, there was no open announcement of an upcoming public tender. Instead, USAID invited six pre-selected companies -- ARD (a division of Tetra Tech), Casals & Associates (a division of DynCorp International), Chemonics, DAI,  Management Systems International (MSI, part of Coffey International Development), and the QED Group -- to participate.

USAID lists qualified bidders, including their contact information, on web pages for Democracy and Governance (scroll down to "Encouraging Global Anticorruption and Good Governance Efforts (ENGAGE)") and Evaluation Services projects. The six companies qualified for ENGAGE contracts "Provide a wide array of support services encompassing short- and long-term technical assistance and other support in innovative anticorruption, transparency, integrity and accountability program areas."  The evaluators -- AMEX International, Development & Training Services, International Business & Technical Consultants, Mendez England & Associates and Social Impact -- "Provide technical and advisory services for evaluations activities worldwide, at the mission (operating unit), bureau, and Agency-wide levels."

Even before USAID defined the program and invited proposals, these companies began recruiting in Timor-Leste for key staffers. Although only one of these six companies will get the contract, it is so lucrative that each of them has spent tens of thousands of dollars flying to Timor-Leste to prepare their bids, although QED Group has since withdrawn from the competition.

On 8 June 2010, USAID issued a 13-page Request for Task Order Proposal (RFTOP) which describes the anti-corruption project's objectives and structure and asks for bids to be submitted to USAID's Bangkok office by 16 July. The RFTOP's three pages of "Background" does not mention anything that occurred before 2006, and we hope that project implementers will have a better understanding of the history and context of Timor-Leste. USAID put out another RFTOP for Monitoring and Evaluation of the Timor-Leste MCC Threshold Program for Anti-Corruption.

The three-year project "seeks to reduce corruption in Timor Leste by strengthening institutions and organizations with mandates to promote government transparency and accountability, and by fostering integration and collaboration among these institutions/organizations." It has many components, some of which will be difficult to implement or evaluate:

  1. Anti-Corruption Commission (capacity building and developing linkages with other oversight institutions)

  2. Office of the Prosecutor General (enhance investigative and prosecution-related skills)

  3. External Audit Authority (assist in the creation of the High Administrative, Tax and Audit Court; upgrade audit skills for the Inspector General)

  4. Procurement Policies and Practices (improve policies, regulations and practices)

  5. Fiscal Oversight Skills of the National Parliament (strengthen parliament’s role as a check on corruption and collusion)

  6. External Watchdog and Public Advocacy Efforts (enhance the capacity of non-state actors, including civil society organizations, media, academia, and the private sector)

Programa Kontra Korupsaun

Iha fulan Setembro 2009, USAID publika Avaliasaun Korupsaun foun ba Timor-Leste, ne’ebe informa dezenho programa kontra korupsaun MCC nian. Ida ne’e fornese informasaun specifiku nasaun nian atu suplementa Papel Servico 2007 MCC global nian kona ba papel MCC nian iha Luta Kontra Korupsaun “Hari integridade Publiku liu hosi Insentivu Positivu.”

Informasaun kona ba programa kontra korupsaun tuir mai iha Timor-Leste komesa sirkula iha linha Washington iha 2009, no kompania “beltway bandit” balu haruka ema mai Timor-Leste atu avalia sira nia opportunidade atu hetan kontratu. Tuir prosedimentu USAID nian, laiha anunsia publiku kona ba tender tuir mai. Buat nebe akontese, USAID konvida kompania nen ne’ebe hili antes – ARD (Divisaun Tetra Tech), Casals & Associates (divisaun ida hosi Internasional DynCorp), Chemonics, DAI, Manajementu Sistema Internasional (MSI, parte hosi Coffey International Development), no QED Group – atu partisipa. Maske USAID seidauk defini klaru programa ida ne'e, kompania sira hahu rekruta staff. Mas iha deit kompania ida hosi sira nain nen ne’e mak sei hetan kontratu, ida ne’e mos lukru tebes katak kada kompania ida hosi sira na’in nen ne’e gasta tia ona dollares rihun barak ne’ebe semo ba Timor-Leste atu prepara ba sira nia tender, maski Grupo QED decide ona katak sira la partisipa iha kompetisaun.

Iha loron 8 Junu 2010, USAID hasai Requesta ida ba Proposta Task Order (RFTOP) ho pagina 13, ne’ebe descreve kona ba objectivo no strutura hosi projetu kontra korupsaun no husu tender atu submete ba Edifisio USAID nian iha Bangkok antes loron 16 Julho. Informasaun dahuluk hosi pagina tolu RFTOP nian la mensiona buat ruma ne’ebe mosu antes 2006, no ami espera katak implementador hosi projetu ne’e sei iha komprendesaun diak liu hosi istoria no kontekstu Timor-Leste nian. USAID hasai RFTOP ida tan ba programa Monitorizasaun no Evaluasaun prograa kontra korupsaun.

Projetu tinan tolu ne’e “buka atu reduz korupsaun iha Timor-Leste liu hosi haforsa institusaun sira no organizasaun sira ho mandatu atu promove transparansia no akuntabilidade governu nian, no liu hosi haforsa integrasaun no kolaborasaun entre institusaun/organizasaun sira ne’e.” Ida ne’e iha komponente sira, balu hiosi ne’e sei dificil atu implementa no avalia.

  1. Komisaun Anti-Korupsaun (hasa’e kapasidade no dezenvolve ligasaun ho institusaun sira seluk ne’ebe halo kontrola).

  2. Edifisio Prokurador Geral (haforsa abilidade investigativo no abilidade seluk ne’ebe relata ho prosekusaun).

  3. Autoridade Auditoria Externo (assisti iha kriasaun Tribunal da Contas; hasa’e capasidade audit iha Inspetor Geral)

  4. Politika no Praktika Prokurament nian Sira (hadi’a politika, regulamentu no praktika sira)

  5. Parlamentu Nasional nia kapasidade atu kontrola (haforsa papel parlementu nian atu supervisiona korupsaun no kolusaun)

  6. Esforsa Kontrola External nian no Advokasia Publiku (Hasa’e kapasidade autor non-estadu nian sira, inklui organizasaun sosiedade sivil sira, media, akademia no seitor privado.

Documents and links (most recent items listed first)

From the Millennium Challenge Corporation (MCC)

From USAID

From the Timor-Leste Government

Other / Seluk

La'o Hamutuk will continue to monitor the progress of this project, and to share information we receive with the public.La'o Hamutuk sei kontinua atu halo monitoramentu progresu hosi projetu ida ne’e, no atu fahe informasaun ne’ebe ami simu ho publiku.

 

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu ba Analiza no Monitor ba Desenvolvimentu iha Timor-Leste
1/1a Rua Mozambique, Farol, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3325013 or +670-7234330
email: info@laohamutuk.org    Web: http://www.laohamutuk.org