Timor-Leste Transition Support Program II

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The Second Transition Support Program Project will provide financing in support of the Transition Support Program outlined in the Government's Letter of Development Policy. Its principal benefit will be to provide a coordinated framework for the balance of payments, and budgetary support. This will reduce transaction costs, will focus attention on development priorities, and allow the Government to mobilize external financing that would not otherwise be available. The project will further facilitate: the consolidation of the institutional framework for good governance; improvements in service delivery, and performance of key sectors, including the judiciary, education, health, agriculture, and institutions supporting private sector development; increased attention to capacity building requirements in the public sector; and, strengthening of public expenditure management capacity, and improving the policy alignment of external financing, by channeling resources through the budget. While risks remain, namely, capacity constraints; failure to contain power sector subsidies; corruption; and, unemployment, the project high priority on capacity building, on management to improve cost-recovery, and, Government commitments, should outweigh those risks.