World Bank to East Timor: We Messed Up

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East Timor was supposed to be the poster child for nation-building. In 2002, after two centuries of Portuguese rule and two decades of Indonesian occupation, this tiny half-island became the century’s first country. Its path to nationhood was paved by a host of international organizations keen to make the fledgling state a model of effective multilateral intervention. In 2006, Paul Wolfowitz, then head of the World Bank, called it “remarkable” success story. “In a short amount of time,” he said, “the people of [East Timor] have built a functioning economy and a vibrant democracy from the ashes and destruction of 1999.”

But East Timor’s story, like its name, is contested. Indeed, a new report by the World Bank’s internal auditors finds failure where Wolfowitz claimed success. And, surprisingly, the bank faults itself.

Here is the Times‘ summary of the findings:

On hospitals

The World Bank delayed the opening of four desperately needed hospitals for a year because it adhered too rigidly to its own procurement rules. This was in a country where the child mortality rate was among the highest in Southeast Asia, life expectancy was barely over 55 and there had been “a total breakdown of the health care system.”

On education

Efforts to support education were unsatisfactory. On the positive side, the bank helped build and repair schools. But, at the request of the new government, which was trying to dismantle the Indonesian education system, it distributed teaching materials in Portuguese. This had been the main language of instruction before the Indonesian occupation, when Timor was a Portuguese colony, and the new government restored it as an official language along with Tetum, an indigenous language. But Portuguese was spoken by only 5 percent of the population, and few younger teachers could understand the materials…

One result: By 2009, more than 70 percent of students tested at the end of the first grade “could not read a single word” of a simple text in Portuguese. “This is a dismal record after 10 years of efforts,” the report says. “A full cohort of the population may be functionally illiterate.”

On poverty

East Timor saved too much of its precious petroleum revenues rather than spend them on social projects, an approach that contributed to needlessly high levels of poverty and unemployment.

Poverty, already at twice the rate of Indonesia, “rose significantly through most of the evaluation period and declined only after 2007, when the government, against bank advice, increased its spending using petroleum resources,” the report states.

This unusually frank assessment raises a host of questions, not the least of which  is whether or not international organizations can effectively intervene in post-conflict situations. And, with other  ‘nation-building’ campaigns faltering, perhaps more will wonder if they should.