Many Southeast Asian countries adopted a state of emergency to combat COVID-19. Likewise, Timor-Leste, with 24 confirmed cases and zero deaths to date, also declared a state of emergency, in force from March 28 until April 26 (later extended). The state of emergency in Timor-Leste involves the restriction of movement, surveillance, compulsory 14-day quarantine for those possibly exposed, and practicing good hygiene and social distancing at home or work.
“In view of the declaration of a state of emergency, the Government through this Decree ensures its implementation by adopting the necessary measures that prevent the disease, contain the pandemic, save lives and ensure the subsistence of supply chains of essential goods and services for our population, even if they may limit some fundamental rights and freedoms,” reads the official proclamation.
Although a lockdown is not the only approach to limit the spread of the virus, it is preferable for the Timorese government considering the country’s weak medical systems. In 2019, only 5 percent of the national budget was distributed to the health sector. According to the Global Health Observatory, there were 59 hospital beds per 10,000 people. The worst possible scenario is devastating: 30 percent of the population could be infected, 15 percent would require assisted ventilation, and 3 percent could die in a small country with a population of 1.3 million. While the national parliament on April 23 approved the government proposal to prolong the state of emergency for another month to fight COVID-19, it does not come without costs.
The Economic Impact
The state of emergency, coupled with the global economic woes, affected the Timorese economy severely through the curtailment of business hours and revenue, unemployment and loss of income, and bankruptcies by businesses. COVID-19, “a crisis like no other,” not only threatens to cause a global economic recession in 2020, but on top of that oil market prices have plummeted. Global economic growth is projected to contract by 3 percent, global trade is projected to fall by 11.0 percent, and oil prices are projected to fall by 42 percent in 2020. The Timorese economy will also enter recession due to its highly dependency on oil and trade. According to an Asian Development Bank (ADB) report, per capita GDP growth in Timor-Leste is expected to be negative 3.7 percent in 2020.
The looming economic storm is further compounded by a $1.8 billion hit to the Petroleum Fund (PF), which constitutes 90 percent of the government budget. Even though oil production in the Timor Sea continues during the state of emergency, the dwindling PF could further constrain the government’s fiscal ability to cover economic losses or stimulate growth during the health crisis. Although the national parliament already approved $250 million out of $400 million requested to combat COVID-19, and $500,000 for per diem financing for the parliament members, extending the state of emergency could gradually exhaust the fiscal capabilities of the Timorese government due to the extra costs of purchasing medical protective equipment and emergency relief while keeping the government in operation.
Compared to their counterparts in developed countries — such as the United States, which is providing a series of drastic economic stimulus and rescue packages — governments in underdeveloped countries have relatively limited resources to combat COVID-19, and continue to heavily rely on foreign aid and humanitarian aid from their development partners. Timor-Leste has received medical support from the Australian government, EU, WHO, UNDP, and UNICEF, and others. But while many developed countries turn inward to concentrate their resources to protect their own people, industries, and economies, Timor-Leste can hardly expect substantive help from main partner countries at this moment.
The economic crisis ranges from the national level down to businesses, individuals, and households. Although the state of emergency decree law does not force businesses to close, many shops shut down or shortened their hours. For example, big supermarkets usually close by 6 p.m. while small shops and restaurants closed their doors. Now, due to reduced revenues, many small companies and shops owners find it difficult to cover the necessary costs while paying staff salaries. Loss of income and unemployment could surge. According to the Business Activity Survey 2019, 53000 citizens were employed in public and private businesses in 2018, marking a decrease in employment since 2017. While contracted workers could be laid off, Timor-Leste’s 250,000 informal or vulnerable workers, who are not covered with annual leave or care, could suffer from loss of income and/or lose their ability to buy food. Although it is hard to say how much of the population participating in the labor force will become unemployed during the COVID-19 crisis, projections for 2020 show that the average household may suffer income loss ranging between $170 and $670.
The Social Impact
The social impacts of the state of emergency in Timor-Leste are also extreme. About 41 percent of the population lives under the national poverty line in Timor-Leste. The restriction of movement prevents many daily cash workers and informal workers from coming out and working. Due to the cancellation of public transportation under the state of emergency, many of them are forced to accept decreased income or simply stay home without money to put food on the table. Street venders have to walk miles to find customers; taxi drivers who lose their income have to depend on neighbors for food; farmers have no way to sell their produce in the cities; small shop owners have no customers even if they open their shops the whole day. Some have limited access to the services of clinics and hospitals, since the country’s medical resources are primarily going to fight COVID-19.
The poor are not only forbidden from moving around or engaging in economic activities, but also having their livelihoods removed, which renders them more likely to fall into greater poverty and starvation. The stalls of vegetable sellers in the Tasi Tolu bus terminal were destroyed for coming out to sell during the state of emergency. A woman who lost her income of $50 a month needs to go door to door to ask for free rice to eat. Prolonging the state of emergency could further disadvantage the poor, who lack access to medical services, income, and livelihoods.
In addition stay-at-home orders and social distancing could expose women and girls to greater risk of violence. The Nabilan Baseline Report showed that 59 percent of ever-partnered Timorese women aged between 15 and 49 years have experienced physical and/or sexual intimate partner violence. Women could be trapped at home with the perpetrators under the movements restrictions; compounded by financial loss and stress, and the diversion of police and health resources, the results could be devastating to vulnerable women and children. As cases of sexual- and gender-based violence and intimate domestic violence have surged in many countries during COVID-19 lockdowns, it is worrying that a similar trend will appear in Timor-Leste during the state of emergency. Nevertheless, resources are being diverted away from the already limited access to women’s basic medical care and services, such as pre- and post-natal healthcare and contraception, which severely decreases the accessibility of services for victims of SGBV and IDV need.
It remains to be seen how the government plans to protect the livelihoods of the hardest-hit people and businesses in Timor-Leste, since the details of the economy stimulus package are yet to be elaborated. So far, the government has given each household $15 in electricity credits. In addition, each household will get $100 per month. However, for the vulnerable population who need to stay home but are running out of cash and essential goods for survival, as well as workers and businesses who are vital to the economy of the country, it is not clear how the government’s current assistance package plan will help. In addition, the political uncertainty after the national budget was rejected in January this year might slow down or obstruct the process of emergency relief.
In Timor-Leste where more than 40 percent of the population lives under poverty line and the social safety net is limited, figuring out how to save lives while minimizing the resulting economic and social costs will be crucial to the government’s plan to combat COVID-19. Sacrificing one for the other would result in tragic consequences, especially to vulnerable groups. Timor-Leste cannot afford to leave the vulnerable behind. It is important that the Timorese government start bringing those who are invisible and miserable back to the center of discussion now — before it is too late.
Dr. Li-Li Chen is a lecturer at the Department of Political Science, Faculty of Social Sciences, Universidade Nacional Timor Lorosa’e (UNTL) of Timor-Leste. She has a Ph.D. from the University of Florida.