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What next for Timor?

By Jeremy Ballenger - posted Monday, 24 July 2006


Alternatives to coffee, oil and gas are needed. While not advocating the demise of the coffee industry, the relative economics mentioned earlier suggest several other areas for development that efficiently leverage lower relative wage levels and the use of labour intensive industry.

Leaving aside healthcare and energy, possible alternatives meeting these requirements include commercial fishing, aquaculture and agriculture. All also have the added benefit of scalability.

Although horribly devastated during the Indonesian withdrawal, Timor’s natural environment is breathtaking both on and offshore. The island is situated on the precipice of a 3.5km deep channel in the Wetar Strait, home to tuna, deepwater snapper and a vast array of marine life continually refreshing the coastal marine environment.

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A key infrastructure aspect not destroyed by retreating Indonesian and militias is deepwater ports. The northern coast of East Timor is well serviced by excellent deepwater facilities, initially designed to cater for Indonesian warships. With this infrastructure largely intact, minimal investment would be required for these facilities to support a commercial fishing industry. Fishing and the subsequent packing and export are labour intensive and thereby low cost, making it hard to ignore.

Agricultural alternatives to coffee are also necessary. That the world’s poor wind up farming our coffee and rice is inarguable. Little known is that rice paddies have an alternative use in aquaculture as hatcheries for fish farming. Work has begun in this area assisted by UN Volunteers and the Department of Fisheries and the Marine Environment (DFME) but further government and development investment is necessary, providing both economic and health benefits.

Malaria is endemic in East Timor. During the wet season, rice paddies become breeding grounds for the malaria mosquito. Integrated farming methods like aquaculture provide fish to eat mosquito larvae, an economically efficient step toward lessening the over 130,000 malaria cases treated in East Timorese hospitals each year.

Another option is vanilla. An alternative cash crop to coffee, vanilla has comparable inputs and labour intensity to farm, and the economics are hard to ignore. Coffee yields four times as much crop per acre, but on price, vanilla yields deliver a return over six times larger to the farmer even with historically low vanilla prices. More simply - raw coffee prices per kilogram are about US$2 on a good day. On a bad day, vanilla is worth US$50 per kilogram. An investment in expansion of this crop magnifies the return to the economy and increases the pace of development.

There will of course be understandable resistance to the growth of Timorese commercial fishing, aquaculture and agricultural industries, especially when they compete for export dollars with Australian business. Nobody likes competition.

But Australian industry must face the reality that this is an unavoidable eventuality.

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To deny or resist moves to boost East Timor’s economic growth invites a much less palatable outcome - the continued need for Australian soldiers and police keeping the peace in an impoverished neighbouring state.

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About the Author

Jeremy Ballenger is a Melbourne-based researcher and writer. His website is here.

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