Sixth 8th Constitutional Government’s Retreat
The sixth retreat of the 8th Constitutional Government took place on January 22nd, 2021, at the Ministry of Finance auditorium, with the theme “Year 2021: Beginning of Economic Recovery with Transformation”.
The first retreat of the year for members of the Government began with the opening speech of the Prime Minister, Taur Matan Ruak, who stressed out that, this “retreat takes place in the context of preparing the implementation of the 2021 General State Budget (GSB)”, the year the Government intends to mark the beginning of the economic recovery.
This speech was followed by presentations from the Minister of Finance, Rui Augusto Gomes and the Coordinating Minister for Economic Affairs, Joaquim Amaral, on “Economic Recovery Plan (ERP): The instrument and rapprochement to Recover the Economic and Social Sectors, by transforming them.
The Minister of Finance, who led the committee responsible for the drafting of the ERP, presented the overview and the objectives of this Plan, and the measures included in the scope of the ERP that should be carried out in the medium-long term. The Coordinating Minister for Economic Affairs informed Government members about what is already being implemented regarding the Economic Recovery Plan.
The Economic Recovery Plan consists of 71 short- and medium-term measures, to be implemented by the 8th Constitutional Government by 2023, focusing on eight main areas, agriculture, industry and tourism, in the economic sector, housing, education, health and social protection, in the social sector and, cross cutting all areas, institutional and environmental aspects.
In a first phase, it is intended to mitigate the impacts of COVID-19, through short-term responses, focused on avoiding the loss of jobs, supporting families and preventing the closure of businesses – with a view to maintain consumption levels and living standards.
At this stage, the “basic basket” program is being implemented, a program to support families, through the allocation of “basic baskets”, and to support agricultural producers and food and personal hygiene products’ commercial operators, national and local, with a view to short-term economic stimulus and encouraging production and trade. Under this program, each member of the national household receives two basic baskets, with a value up to US$ 25 each.
Also referring to the package of short-term measures, support for the resumption and maintenance of the activity is included, which allows entities enrolled in the Social Security contributory regime, registered in the tax system, which show loss of turnover or revenue and who intend to resume or maintain the activity, to be entitled to partial exemption from monthly social security contributions and to the allocation of a monthly cash amount, called a support allowance for the recovery and maintenance of economic activity, for four months.
In the second phase, with medium-term measures aimed at the economic recovery (covering a period of 2-3 years), the objective will be to respond to the challenges caused by the pandemic, but also to structural weaknesses, with public policy measures that help the necessary national economic and social transformation, to make Timor-Leste not only a higher income country, but also less dependent on other countries, with a diversified economy and greater human well-being.
The Planning, Monitoring and Evaluation Unit (UPMA), of the Prime Minister’s Office, presented the main challenges and rules for implementing program budgeting. In 2021, for the first time, all expenses for the General State Budget are presented and specified by programs, in addition to the already used organic and economic classifications.
The program budgeting model aims to increase transparency, promote the setting of expenditure priorities and contribute to greater accountability and control. The programs are designed to achieve a specific result in the medium- and long-term (3-5 years) and reflect the provision of services, which are linked to the Government’s Program and Priorities, the objectives of the Strategic Development Plan (SDP) and the Sustainable Development Goals (SDGs). Each program must have a result indicator and plans for its execution. Each program is composed of subprograms, with short-terms results and for each subprogram there are activities, to be carried out annually, to produce immediate results.
Prior to the debate on the content of the presentations and conclusions of the retreat, the Ministry of Finance made a presentation on the rules on the 2021 General State Budget implementation. These rules, defined by the Government Decree no 1/2021, of January 8th, apply to the budget of the bodies and services of Central Administration, to the budget of the Special Administrative Region of Oe-Cusse Ambeno (RAEOA) and to the budget of the Social Security, and aim to ensure an effective and rigorous budgetary control and, at the same time, to simplify budget execution procedures, continuing the changes initiated in 2020, with the aim of facilitating the implementation of the 2021 General State Budget by Public Sector Administrative bodies and services.
Among the differences related to the 2020 GSB implementation Government Decree, it stands out the existence of only two financial regimes, the implementation of program budgeting, the change of the closing dates of the budget year, the flexibility of budget implementation and the increase reporting obligations.
