Building Timor-Leste

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East and West Timor – Building Business across the Border

Cross border trade between Timor-Leste and neighboring Indonesia has provided an opportunity to build bridges and markets yet, although good intentions exist on both side, remains relatively inaccessible to most Timorese suppliers. At first glimpse, it might be hard to tell why. Businessmen and women in West Timor have money and the desire to spend; farmers in East Timor have product and the aspiration to sell. What’s gone wrong here?

Typically overrun with cattle waiting to be transported to West Timor, Raflima's (one of the most active Covalima cattle exporters) holding grounds are empty in December as the company awaits a new export permit.

The cross border event hosted by Peace Dividend Trust during December of last year on the border of Bobonaro and West Timor, under the guidance of Matchmaking Associates Ilidio Ximenes and Brigida Soares, has shed significant light on the subject.

What was the first obvious barrier to improving the frequency and success rate of border trade? Inadequate communication. This was one of the first meetings the participating parties (Timorese suppliers, Indonesian buyers, Indonesian Customs Officers, the Bononaro Chamber of Commerce, and the Government of Timor-Leste) have had since Timor-Leste’s independence.

Indonesian and Timorese officials sit together while Brigida Soares, PDM-TL Matchmaking Associate, delivers the introduction.

Once people got talking, matters got interesting. Regular trade between the two countries, which all agreed benefit both sides of the border, is indeed in reach. It will just take time and energy to make sure it’s done right. The Indonesian border representatives expressed the importance of understanding the regulations and quality criteria, used by their agents to inspect incoming international goods, including Timorese product. The government of Timor-Leste, in some capacity, should continue following these matters up to ensure this is just a temporary problem, remedied through the provision of information and support, and then regularly monitored.

If not, exporters will continue to waste their efforts attempting to move goods that do not meet Indonesian standards. This loses them both time and money, especially if you’re dealing in the cattle trade (an industry with great potential in Timor-Leste), where the product needs to be fed and watered during quarantine. If no accessible and easily digestible explanation of regulations exists, new and veteran exporters may become frustrated and call it quits. Also worth noting, if no communication channels exist between exporters and border agents, changes in standard specifications may also frustrate and discourage further trade.

On a more positive note, what was also clear when Timorese suppliers sat and talked with Indonesian buyers was how great of an opportunity border trade is to building a sustainable income from abroad. It’s not aid money or charity money. It will stay in country and “hari’i Timor-Leste”.

One Indonesian buyer, with an interest in local agricultural products like mung beans, soy beans, corn (to name a few) stood up and said (this being loosely translated from Tetum) “I want to buy and you have the products. You just have to tell me what you have and I’ll buy it. Just call me and tell me.” The need, and importance, of communication was emphasized repetitively. (Also important, if you are a local supplier and are interested in exporting these products, please get in touch with us at timor-leste@pdtglobal.org.)

For other encouraging signs, I didn’t have to look any farther than the analytics from PDT’s BuildingMarkets.org web portal. In June of 2010, the website was translated into Bahasa Indonesia and the number of hits since then speaks for itself.

There has been an increase by over 240% in visits from Indonesia in the six months since the site's translation into Bahasa Indonesia.

Successes were made at the event. Telephone numbers were exchanged. Buyers and sellers now have a better idea of what to expect when attempting to transport goods across the border. The two country’s governments were there to understand where both sides were coming from, and to get in their say as well. Now, all participants have a solid foundation to build on when  improving the border trade system in place. Further communication, whether through events like these or other mediums, is instrumental in achieving a system that encourages, rather than obstructs, border trade.

PDM-TL Matchmaking Associate Ilidio Ximenes speaks with TVTL.

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5 Comments

  1. Shane McCarthy says:

    You report that your project exported 1600 head last year from Covalima/Bobanaro but the official statistic from MAFF and Customs is 685 head from all of Timor, including Oecusse. We were only able to get about 100 head exported. Hmmmm. Something ain’t right.
    Shane

  2. Edward Rees says:

    Shane,

    Thanks for that. We will look into it and get back to you.

    Edward

  3. Edward Rees says:

    Dear Shane,

    We are still not sure where you got the number “1600 head last year from Covalima/Bobanaro” statement. If we did say this (although we looked across the blog and couldn’t find it), then yes – it’s incorrect and should be amended.

    However, in this blog post http://buildingmarkets.org/blogs/timor/2011/03/01/the-voice-of-an-exporter-–-raflima’s-almerio-moniz/ we were referring to the approximately 1500 head of cattle worth almost $600,000 that we helped Raflima with during the course of the PDT-Raflima relationship. The first transaction was in December 2008 and the most recent June 2010. In retrospect and to be more accurate we track Raflima’s purchases from local cattle owners, as opposed to explicit exports. We assume Raflima exports all those that it purchases, however there will invariably be some margin of error. Raflima did export 1,544 cattle during the 2008-2010 period, of which approximately 1,300 were sourced with PDT assistance, we over estimated that number, but have triple checked. The value is about 600k, but the numbers of cattle we were out slightly.

    The owner of Raflima, Rozito Manek encourages you to contact Raflima’s manager, Francisco Assis (738-4202) if you have any questions.

    Cheers,

    Edward

  4. […] in Bobonaro and Cova Lima. Mrs. dos Santos was one of the driving forces behind last year’s cross border meeting in Bobonaro, and has put in tremendous efforts in supporting the local agricultural sector. Mr. […]

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