Poverty & Equity Brief East Asia & Pacific Timor-Leste April 2019 Timor-Leste has made significant progress in recent years in reducing poverty. The poverty rate at the national poverty line declined from 50.4 percent in 2007 to 41.8 percent in 2014. Measured using the US$1.90 per person per day (2011 PPP) poverty line, the decline was even more rapid, from 47.2 percent in 2007 to 30.3 percent in 2014. These impressive reductions of poverty, however, were not experienced equally across the country. The village- level poverty maps confirm that poverty rates were much higher in western areas of Timor-Leste than in eastern areas. The maps also show that there was far more variation in poverty rates within districts than between districts. On spatially disaggregated gender-related indicators, it was in poorer areas of Timor-Leste where there was more educationally-related female disadvantage and where there were higher levels of abuse and domestic violence against women. In contrast, there was an inverse pattern between female labor force participation and poverty rates. While monetary poverty has declined significantly, many Timorese still lack access to basic amenities. In 2014, around 35 percent of non-poor and nearly half of poor households did not have access to improved sanitation facilities. Similarly, even though access to electricity has doubled between 2007 and 2014, around 40 percent of poor households still lived without access to electricity. Moreover, one-quarter of households still did not have access to safe drinking water. Consumption growth for the bottom 40 percent of the population has not quite kept pace with the rest. Since 2007, real consumption per capita for the bottom 40 grew at the average rate of 2.88 percent per year, slightly lower than the national average growth rate of 2.98 percent per year. This pattern of consumption growth resulted in a slightly worsening of inequality, with the Gini index increase from 0.28 in 2007 to 0.29 in 2014, although this is still low by international standards. Number of Poor Rate POVERTY (thousand) (%) Period National Poverty Line 507.0 41.8 2014 International Poverty Line 372.5 30.7 2014 1.3 in U.S. dollar (2014) or US$1.90 (2011 PPP) per day per capita Lower Middle Income Class Poverty Line N/A N/A N/A 2.2 in U.S. dollar (2014) or US$3.20 (2011 PPP) per day per capita Upper Middle Income Class Poverty Line N/A N/A N/A 3.9 in U.S. dollar (2014) or US$5.50 (2011 PPP) per day per capita SHARED PROSPERITY Annualized Income or Consumption Growth per capita of the bottom 40 percent N/A N/A INEQUALITY Gini Index 28.7 2014 Shared Prosperity Premium = Growth of the bottom 40 - Average Growth N/A N/A GROWTH Annualized GDP per capita growth -7.2 2009-2014 Annualized Income or Consumption Growth per capita from Household Survey N/A N/A Sources: WDI for GDP, National Statistical Offices for national poverty rates, POVCALNET as of March 2019, and Global Monitoring Database for the rest. Poverty Economist: Ririn Salwa Purnamasari POVERTY HEADCOUNT RATE, 2001-2014 INEQUALITY TRENDS, 2001-2014 Gini Index 60 12 40.0 35.0 50 10 30.0 40 8 25.0 30 6 20.0 15.0 20 4 10.0 10 2 5.0 0 0 0.0 2001 2003 2005 2007 2009 2011 2013 2001 2003 2005 2007 2009 2011 2013 Poverty International Poverty Line Lower Middle IC Line GDP per capita rate (Thousand) (%) Upper Middle IC Line National Poverty Line GDP per capita (US$2011 PPP) Source: World Bank using TLSLS/EAPPOV/GMD Source: World Bank using TLSLS/EAPPOV/GMD KEY INDICATORS (distribution among groups) International Poverty Line (%) Relative Group (%) Year Non-Poor Poor Bottom 40 Top 60 Urban population 81 19 26 74 2014 Rural population 65 35 46 54 2014 Males 70 30 39 61 2014 Females 69 31 40 60 2014 0 to 14 years old 63 37 47 53 2014 15 to 64 years old 73 27 36 64 2014 65 and older 80 20 26 74 2014 Without education (age 16 and older) 68 32 40 60 2014 Primary education (age 16 and older) 71 29 40 60 2014 Secondary education (age 16 and older) 79 21 29 71 2014 Tertiary/post-secondary education (age 16 and older) 90 10 15 85 2014 Source: World Bank using Global Monitoring Database POVERTY DATA AND METHODOLOGY Poverty in Timor-Leste is estimated based on per capita consumption expenditure. Members of a household are considered poor if the per capita consumption of the household is below the poverty line, which is determined using the cost-of-basic-needs approach. This method calculates the poverty line as the cost of a consumption bundle that is (1) consistent with the consumption pattern of the poor; and (2) deemed adequate for meeting basic needs. The poverty line has three main components: food, rent, and non-food. The food poverty line is constructed based on representative food bundles to meet the recommended nutritional need of 2,100 calories per person per day. The rent poverty line represents the average imputed rental cost per person of a reference dwelling. The non-food (excluding rent) poverty line is estimated in terms of what the poor generally spend on non-food items. In 2014, poverty lines were estimated for the 13 districts using the Timor-Leste Surveys of Living Standards (TLSLS-3). For 2007, poverty lines were constructed for six domains (the rural and urban segments of three regions), as the TLSLS-2 sample size permitted only this degree of spatial disaggregation. Yet, both years present comparable estimates of poverty. HARMONIZATION The numbers presented in this brief are based on the EAPPOV database. EAPPOV is a database of socio-economic statistics constructed using microdata from household surveys in the East Asia and the Pacific (EAP) region and is managed by the East Asia & Pacific Team for Statistical Development (EAPTSD). As of January 2019, the collection includes 19 countries and 93 surveys. Harmonized surveys in the EAPPOV database are compiled into 4 modules following Global Monitoring Database (GMD) Harmonization guidelines. A subset of the harmonized variables form the basis of the GMD collection, including the welfare aggregate which is used for Global Poverty Monitoring. Terms of use of the data adhere to agreements with the original data producers. East Asia & Pacific povertydata.worldbank.org Timor-Leste www.worldbank.org/poverty