Timor-Leste Country Risk Analysis: A Macroeconomic risk Tomas Freitas University Technology of Sydney (UTS) 23 November 2013 Timor-Leste Country Risk Analysis.

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Presentation transcript:

Timor-Leste Country Risk Analysis: A Macroeconomic risk Tomas Freitas University Technology of Sydney (UTS) 23 November 2013 Timor-Leste Country Risk Analysis

Outline Country & Economy Performance Transparency and Accountability Theoretical Framework Economy Growth ( the elements of GDP) Conclusion Timor-Leste Country Risk Analysis

ItemweightSource Population1.2 MillionNSD (2011) Life Expectancy62.5 yearHDR (2011) Child Mortality under five year old 56 Per 1000 live birth HDR (2011) Access Clean Water35.7%HDR (2011) Access to Education (Primary School) 90%MoF (2012) Growth National Income2,704 Million (USD)IMF (2010) GDP Per capita$805 (USD)HDR (2011) Real GDP Growth9.5%ADB (2010) Urban Unemployment42% MoF (2012) Rural Unemployment80%MoF (2012) Inflation12.4%MoF (2011) BOP (Current Account)1,717 Million USDBCTL (2010) Savings+10 Billion USDBCTL (2012) Country & Economy Performance Timor-Leste Country Risk Analysis

IndexPeriodRankScore Revenue Transparency201012/ Corruption Perceptions /1832.4/10 Judicial Independence /1423.3/7 Rule of Law201010%-1.2 Open Budget2010Minimal34 Voice & Accountability201049%0.02 Control of Corruption201018%0.95 Human Development Report /187 (Low) Press Freedom / Timor-Leste Transparency and Accountability performance Source: Transparency International Timor-Leste Country Risk Analysis

Theoretical Framework Macroeconomic – Income Approach GDP: The total income earned by the household in a nation during a year Total Income = Rent + Wages + Interest + profit – Expenditures Approach GDP: the total amount spent on goods and services in a nation by households, firms, government and foreigners GDP = C + I + G + X n ) Timor-Leste Country Risk Analysis

GDP Growth Source: IMF, World Economic Outlook Timor-Leste Country Risk Analysis

Fiscal Year Consumption Based on Consumer Price Index in Million US Dollar Investment In Capital Asset (Million US Dollar) Gov Exp in Health, Education, Agriculture, Infrastructure & Social Security in Million US Dollar ExportsImportsTrade Balance / ,645146,108-40, / ,451109,127-65, / ,685100,802-40,117 Transition / ,179206, , / ,207268, , / ,512295, , / /1, /1, Elements Of The GDP Timor-Leste Country Risk Analysis Sources: Ministry of Finance & National Statistic Directorate

Elements of Consumption Source: National Statistic Directorate Data compiled from April 2011-April 2012 Timor-Leste Country Risk Analysis

Government Expenditures Timor-Leste Country Risk Analysis Sources: Ministry of Finance

Revenues contribution to State Budget Source: Ministry of Finance Timor-Leste Country Risk Analysis

Merchandise Import of Major commodities CommodityValue in US Dollar CommodityValue in US Dollar Vehicles (Cars & Motorbikes) 58,486,000Construction materials4,075,138 Rice35,069,475Tractors for Agricultures3,186,171 Fuels30,715,395IT & Computers2,972,124 Electrical Machinery (Heavy Fuel Generators) 25,198,000Household furniture's 655,676 Aerials & Aerial reflectors, Boilers, Machinery 22,770,000Medicines, Antibiotics & equipments 524,934 Alcohol & Tobacco7,456,999Vegetables, Fruits & Cooking oil 85,766 Timor-Leste Country Risk Analysis Source: National Statistic Directorate

Exports Commodity CommodityQuantity (in Kg) Value (in USD) Coffee9,941,9638,290,612 Re ExportsHeavy Containers 26,021,000 Timor-Leste Country Risk Analysis Source: National Statistic Directorate (2012)

Issuesstatus Manatuto in % Dili in % Ermera in % Manufahi in % Food Consumption Less than adequate Housing Less than adequate Clothing Less than adequate Health Care Less than adequate Children education Less than adequate Household income Less than adequate Timor-Leste Country Risk Analysis

Timor-Leste Country Risk Analysis Circular Flow

Timor-Leste Country Risk Analysis Timor-Leste Circular Flow

Conclusion Timor-Leste economy is high risk because: – There are no factors of production. – There are no alternative commodities to export except coffee. – The private sector relies on government projects. – Government revenue depends on oil. – There is no legal protection for local food production. Timor-Leste Country Risk Analysis