East Timor gets aid lifeline

Preparations are underway for independence on 20 May

International donors have agreed to provide East Timor with $440m in aid to help it through its first three years of independence.

At the end of a meeting in the East Timorese capital, Dili, donors pledged $360m in fresh aid to bolster a fund that has already been set up containing $80m.

We're delighted, absolutely. It's far more than what we expected

Deputy Foreign Minister Fernando de Araujo

The East Timor government had asked for enough funds to cover a large budget deficit over the next three years until taxes from offshore oil and gas projects start rolling in.

East Timor will rank as one of the world's poorest countries when it formally gains its independence on Sunday.

"We're delighted, absolutely. It's far more than what we expected," Deputy Foreign Minister Fernando de Araujo told AFP news agency.

"This meeting has been successful in what it set out to achieve," the World Bank's East Asia and Pacific director, Klaus Rohland, told the closing session.

The two-day donors' meeting was co-hosted by the World Bank and the United Nations and attended by representatives from 27 countries and organisations.

The fledgling administration had presented aid donors with a multi-million-dollar development plan that prioritises poverty alleviation, with 39% allocated to health and education spending in fiscal year 2003, increasing to 48% by fiscal year 2006.

Damaging legacy

East Timor's economy has suffered from centuries of neglect as a Portuguese colony and decades of conflict with the Indonesian military after its invasion in 1975.

UNDP findings

Average life expectancy of 57 years

More than 50% illiteracy

Per capita GDP is $478

Half the population earn less than 55 US cents a day

50% of infants are underweight

But it was the systematic destruction by retreating Indonesian troops and militias after the vote for independence almost three years ago which ensured the transition to nationhood would be extremely difficult.

The BBC correspondent in Jakarta, Richard Galpin, says that given the international community has been so deeply involved in rescuing East Timor since that traumatic independence vote - it is currently run by the UN - it was always likely the international community would continue to provide support.

A report released by the United Nations Development Program (UNDP) on Monday underlined the dire economic effects of East Timor's unstable past.

Per capita gross domestic product is $478 and half the population is earning less than 55 US cents a day.

Very few people have received adequate education and more than half are illiterate.