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actionable activities focused on developing, strengthening and supporting the overall private sector environment. The objective is to increase private investment,
create sustainable jobs and diversify the economy. The reform consists of six major reforms designed to strengthen and improve the private sector environment. These
major reforms are: 1 Land and Property Regulation Reform, 2 Economic Infrastructure Development, 3 Labour Market Reform and Workforce
Development, 4 Reform of the Business Enabling Environment, 5 Reform of the Private Investment Regime, and 6 Private Sector Reform and Development.
Whilst overall reform coordination is the responsibility of MECAE, the implementation of specific activities will be coordinated across Ministries and
relevant public entities. The reform closely complements the Fiscal Reform Program carried out by the MoF.
2.2.2.4. The Fiscal Reform, Performance Management Reform, and Budget Performance Reform
The Fiscal Reform, Performance Management Reform, and Budget Performance Reform aim to ensure the fiscal sustainability of Timor-Leste in the medium and long
term by achieving a balance between State expenditures and revenues. As such, there are three interrelated reforms carried out by the Ministry of Finance each with
its own set of goals. The Fiscal Reform will increase non-petroleum resources, while guaranteeing the
“tate’s o
it e t to its itize s. I o de to a hie e this, the Fis al Refo comprises measures in two broad areas. Firstly, it seeks to provide the Timorese Tax
and Customs systems with an efficient body of legislation that enables the State to collect the necessary revenues for pursuing its mission. Secondly, it seeks to
modernize and consolidate the Timorese Tax and Customs administrations through the modernization of IT systems and streamlining processes and procedures.
The Budget Performance Reform is to ensure that public resources are used as efficiently and effectively as possible in order to provide quality public services. The
Budget Performance Reform agenda includes measures in four areas. The first is improving the quality of public expenditure through introducing a form of Program
Budgeting, improving multi-year budgeting, and putting in place an effective system for monitoring and evaluating both the quantity and quality of public expenditure.
The second area concerns improving the IT systems and processes and procedures of the public institutions that channel and execute public expenditure. The third area is
the reform of the governance and cost structure of State-Owned Enterprises with a view towards achieving self-sustainability. The fourth area is the decentralization of
public expenditure as part of the political decentralization agenda, which will require the development of Standard Operating Procedures, the deployment of IT Systems,
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and the training and capacity building of human resources in the area of PFM at the municipal level.
2.2.3: Service Delivery and Performance Budgeting
The VI Constitutional Government is committed to ensuring the Annual State Budget ensures that public service delivery is more efficient, effective and accountable. To
further this purpose, the PMU has ee eated u de the P i e Mi iste ’s Offi e
PMO, with the mandate to link planning and budgeting as well as monitor the results to feed into planning objectives, together with the MoF. The creation of the
program classification will further help to better link planning and budgeting, and allow for structured prioritisation and the efficient allocation of Government
resources.
All of the Ministries are crucial stakeholders in the reform, and the Planning and Monitoring Unit PMU is working together with the MoF to support line ministries
throughout the budget preparation process, including by helping every Government institution define their priority programs, and by carrying out quarterly monitoring
of program expenditures.
In the context of the service delivery and performance budgeting initiative, the 2016 budget presents a classification of certain expenditures by program as well as the
usual classification by appropriation category and institution. Each Ministry has identified its major programs and submitted a joint budget submission classified by
program and activity. All budget books therefore include a Program Budgeting component, which breaks down expenditures within each line ministry by program
and activity for 2016.
2.3 Economic Overview
2.3.1 The International Economy
2.3.1.1 International Growth Trends
Legacies from the financial and euro crises are still visible in many countries in the form of weak financial institutions and high levels of public and private debt, this will
continue to sh ape the glo al e o o ’s ediu -term outlook. The varied impact of
these legacies, the recent decline in global oil prices and increased exchange rate volatility make it difficult to categorize overall global economic growth trends in
2015.
In general, growth in the advanced economies will pick up due to improvements in global financial conditions, the E
u ozo e’s g adual recovery and lower fuel prices, while in emerging and developing economies growth will slow down driven by lower
