Urban Poverty in Timor-Leste

The aim of this Urban Poverty in Timor-Leste study is to improve MDF’s understanding of poverty in urban areas of Timor-Leste. There are two key research questions. Firstly, what opportunities exist for pro-poor business growth? Secondly, what are the characteristics of urban poverty? To answer these questions, a combination of primary research, literature reviews and key informant interviews were conducted and secondary data analysed.

Key question one: What opportunities exist for pro-poor business growth in urban areas of Timor-Leste?

Outside the tourism and agribusiness sectors (where MDF is already working) there are few opportunities for pro-poor business growth in urban areas of Timor-Leste.

The construction and services industry is growing and these companies can have a pro-poor impact, creating jobs and offering training. Supporting service businesses, however, offers limited opportunities for impact at scale. Where feasible, supporting local businesses to benefit from Timor-Leste’s construction boom would be beneficial. Supporting micro-enterprises in service sectors could have a more direct pro-poor impact.

Key question two: What are the characteristics of urban poverty in Timor-Leste?

Many households interviewed associated poverty with laziness. Low education levels, a lack of external support, and cultural obligations were also perceived as factors keeping families in poverty.

The most common activity recorded in our sample was employment, followed by small informal businesses. Most households had at least one member who was formally employed, who often provided the bulk of household income.

Self-employment could provide a good income – but there is high competition. Without access to finance, respondents struggled to diversify their businesses and differentiate themselves from the competition.

At MDF, we focused this study on Dili, which allowed us to go into depth in a single location. Dili is an appropriate focus because it is the biggest urban centre in Timor-Leste, with a population almost ten times that of the nearest rival. Dili also receives high numbers of migrants from rural areas and other towns. Consequently, the findings presented below may not be applicable to other urban centres.

Throughout this study, we excluded businesses working in the agribusiness or tourism sector. These are important potential growth sectors with linkages to urban environments, but MDF already has a portfolio in both. The aim of the study was to find new opportunities.

Click on the link below to download the entire Urban Poverty in Timor-Leste report.