East Timor’s new tax system reform has been approved, and it is one of the lowest in the world. The reform is part of the country’s development plan in 2008. The reforms are intended to stimulate the economy, facilitate investment, encourage private sector growth, and ease the burden of low-income earners.

There is an agreement between East Timor and Australia about how to allocate the maritime field between both countries and therefore distribute the gas field. It is expected to increase East Timor’s revenues. Details are not yet available.

Papua New guinea and ExxonMobil are planning to build a $10b liquified natural gas (LNG) plant, scheduled to open 2013. Papua New Guinea is already an oil exporter, but until now their gas reserves have been unexploited - this plant aims to change this. The plant is estimated to produce 10m tonnes of LNG annually when operational. Final decision on the plant, 34% owned by ExxonMobil and 30% owned by the Paupa New Guinea company Oil Search Ltd., will be made in May 2008.

According to a press release issued from the Japan International Cooperation Agency (JICA), Timor-Leste (East Timor) is in need of an estimated USD 9.5 million in financial assistance to strengthen its justice system. JICA President Sadako Ogata noted that the former Portugese economy could study the aftermath of the genocide in the African state of Rwanda to help develop solutions to handle the backlog of people awaiting trial. JICA President Ogata expressed that once a forthcoming merger between JICA and the Japan Bank for International Cooperation (JBIC) is completed in 2008, the ‘New JICA’ will be able to provide not only technical assistance but also yen loans and grant aid. Timor-Leste is still grappling with stability after its independence from Indonesia on May 20, 2002 and is one of Asia’s poorest nations, which nevertheless has vast unexploited offshore oil and gas fields.

China has assisted in the reconstruction of East Timor, including financing the construction of the Presidential Palace and training civil staff. Now a Chinese state company, China Metallurgical Construction, is planning on building a hospital in Suai, a district in East Timor.

Australia will help East Timor as it faces a food shortage. According to Australian researchers, "31 to 40 per cent of crops grown by subsistence farmers in Southeast Asia can be lost to pests and diseases." Australia plans to send researchers to teach local specialists how to prevent the spread of pests and diseases in able to sustain their crops. The World Food Program predicted that up to one-fifth of the population of East Timor will be suffering from severe hunger by October if action is not taken.

Coffee, being one of East Timor's export commodities, contributes 18 percent of the country's total economy. Nine lecturers from the East Timor Coffee Academy are visiting Southern Cross University, Australia to learn and develop indigenous blends to keep the industry thriving and profitable.

 

A report by the United Nations Food and Agriculture Organization issued Friday concluded that recurring droughts and locust outbreaks in Timor-Leste have destroyed approximately 30 percent of the island-nations major crop production. As a result, 210,000 people or 1/5 the total Timor-Leste population will need at least 15,000 tonnes of emergency food assistance during the approaching "lean" season from October 2007 to March 2008.

Timor Leste will be attending the Beijing International Tourism Exposition in an attempt to attract tourism investments, according to one government official. Held in the Chinese capital, the fair will last from June 21 to 23 and will feature 800 exhibitors from 80 nations. The Timor-Leste government plans to show the culture, history, landscapes and beaches, which can make Timor-Leste a great tourist destination and attract investors to the sector.

The World Bank Board of Executive Directors approved a USD 6 Million grant to Timor-Leste's Ministry of Education and Culture for an education program that will last from 2007-2012. The aid will be used to to finance education policy development, resource management skills enhancement, learning materials and vocational skills innovation. Australia plans to match the grant under AusAID, the Australian government's aid program, providing a further USD 6 million in aid, while the Timor-Leste Government will provide USD 3.3 million to the program.