Support to Peaceful Development through Innovative Employment Promotion

Project description

Title: Support to Peaceful Development through Innovative Employment Promotion (IEP)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Timor-Leste
Lead executing agency: Ministry of Commerce, Industry and Environment (MCIE)
Overall term: 2013 to 2016

Timor-Leste. Oil production from candlenuts. © GIZ


German development cooperation is supporting Timor-Leste in overcoming the causes of conflict, fragility and violence, improving the non-violent management of conflict and creating conditions for peaceful and inclusive development. The conceptual basis for this support is provided by the Interministerial Guidelines ‘For a coherent German Government policy towards fragile states’. Employment promotion is regarded as a key peacebuilding measure.

Timor-Leste has been an independent nation since 2002. This small island state is heavily dependent on imports and one of the poorest countries of South-East Asia. The people outside the capital of Dili depend primarily on subsistence farming for their livelihoods.

Some 70 per cent of the population lives in poverty. Wealth and employment opportunities are very unevenly distributed, particularly between the capital city and rural regions. The national budget is funded by income from oil production, which requires relatively little input of labour. The population struggles to find employment. Although the public sector is an important employer with many workers, there are generally not enough jobs in the country. The formal private sector is small and focuses primarily on services in the capital. There are very few manufacturing companies.

The population is growing at a rate of 2.4 per cent per year. Some 15,000 students graduate from school every year to compete for only around 1,000 new jobs. Strong migratory pressure from rural regions on the cities, especially on Dili, is exacerbating the job shortage. The difficult economic situation is jeopardising the country's peaceful development.


Employment opportunities in the private sector have improved in selected sectors and regions of Timor-Leste.


The Government of Timor-Leste has made economic development a priority in its Strategic Development Plan 2011-2030. The development potential in rural regions is to be utilised more strongly in future. The project supports the partners in sustainably improving the situation in rural regions.

The project strengthens labour market mechanisms that contribute to matching the supply of workers more closely with labour market needs. The main focus lies on supporting value-added chains that are jointly selected with the partners. This approach enables individual production stages as well as new services and product marketing to be developed.

By promoting markets, stronger links are to be created between rural regions and district centres as well as the capital city. Vocational training institutions not only impart technical skills but increasingly develop abilities such as strategic thinking and deliver knowledge of basic market-economy principles. The aim is to improve the graduates' chances of finding qualified employment.

The project cooperates closely with the target groups in two districts. A development worker in each district helps to enhance the technical and institutional capabilities of the partners by providing long-term advisory services and on-the-job training.

The Government of Timor-Leste intends to strengthen the role played by cooperatives in rural development. In the Directorate for the Promotion of Cooperatives, Micro and Small Enterprises of the Ministry of Commerce, Industry and Environment, an integrated expert is providing advisory services on the management and finances of cooperatives, designing training measures and promoting interaction between the national level and the districts.

Members of the cooperatives also have the opportunity to learn non-violent conflict management skills and democratic decision-making processes.

The creation of more employment will make the greatest contribution to the country's peaceful development.

Results achieved so far

The previous project to promote employment for young people, which was completed in mid-2013, addressed similar problems. The formation of production groups was promoted at agricultural secondary schools. Today many groups generate their own incomes and have the prospect of registering as cooperatives. Practice-oriented training now prepares young people better for the demands of the labour market. The new project applies these lessons in the agricultural sector and will also apply them in other sectors yet to be selected.

Timor-Leste. Young graduates with seedlings. © GIZ