By: Dionísio Babo Soares*
Understanding the real meaning of poverty.
Timor-Leste has made considerable progress since restoring independence in 2002, thanks to successive governments, national institutions, communities, and development partners. The IX Constitutional Government, led by Prime Minister Xanana Gusmão and supported by the CNRT–PD governing coalition, has continued this development process through initiatives in infrastructure, rural and urban development, public services and other areas of national importance.
Nevertheless, despite these achievements, the latest United Nations Global Multidimensional Poverty Index (MPI), released on 12 October 2026 by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI), offers Timor-Leste an important opportunity to reflect on its development achievements, remaining challenges and national priorities.
A fundamental question arises: Have these achievements brought about lasting improvements in people’s living standards?
According to the most recently verified country estimates, 48.3 per cent of Timor-Leste’s population is classified as multidimensionally poor, while another 26.8 per cent remains vulnerable to multidimensional poverty. Furthermore, 17.4 per cent experience severe multidimensional poverty.
These findings deserve serious consideration, not because they necessarily establish the country’s current poverty rate, but because they reveal the depth and interconnected nature of the development challenges Timor-Leste has worked to overcome.
However, an important methodological distinction remains. Although the latest global report was published in October 2026, the most recently verified MPI estimates for Timor-Leste still rely on household survey data collected in 2016. These figures therefore provide an internationally recognised assessment of historical conditions rather than a direct measurement of poverty in 2026.
This distinction matters. Over the past decade, successive governments have invested in infrastructure, electricity, education, health services, social protection and public institutions. These investments have contributed to important changes in national development. Nevertheless, without updated and comparable survey data, we cannot determine precisely how much they have reduced multidimensional poverty.
The findings therefore raise a question of fundamental national importance: How can Timor-Leste translate its public investments, national resources and economic opportunities into lasting improvements in people’s everyday lives?
Poverty is more than a lack of money.
Traditionally, we often understand poverty in terms of household income, expenditure or people’s ability to purchase basic goods and services. These measures are essential, but they do not tell the whole story.
A family may earn enough to remain above an income poverty threshold while still living in a house without adequate sanitation, reliable drinking water or appropriate cooking facilities. Children may attend school but struggle to learn because of poor nutrition, inadequate teaching resources or difficult conditions at home.
Similarly, a household may receive social assistance but remain vulnerable because employment is uncertain, agricultural production is low or essential health services are difficult to access.
The Multidimensional Poverty Index captures these overlapping disadvantages through ten indicators across three equally weighted dimensions: health, education and living standards.
In Timor-Leste, living-standard deprivations account for 47.6 per cent of the national MPI, followed by health at 29.3 per cent and education at 23.1 per cent.
These percentages represent each dimension’s contribution to overall measured multidimensional poverty, not the percentage of households deprived in each category.
The prominence of living standards suggests that improvements in water, sanitation, housing, electricity, cooking facilities and household assets are particularly important to reducing multidimensional poverty.
This gives us a more practical understanding of development. Building a road matters, but it becomes a meaningful development achievement when it connects farmers to markets, children to schools, pregnant women to health facilities and communities to economic opportunities.
Similarly, expanding electricity access represents progress, but its developmental value increases when households use that electricity for productive activities, refrigeration, education, communications and small businesses.
In other words, we should measure infrastructure not only by what we construct, but also by how it improves people’s lives.
Recognising progress without overlooking the challenges.
Timor-Leste has made considerable progress since restoring independence in 2002. Our country emerged from conflict with severely damaged infrastructure, limited institutional capacity and substantial social and economic challenges.
Through national determination, successive governments’ efforts, and international cooperation, we have established functioning democratic institutions, expanded public services, and developed essential infrastructure.
We must recognise these achievements fairly.
Historical MPI data also demonstrate that progress is possible. Comparable UNDP–OPHI trend estimates indicate that multidimensional poverty declined substantially between 2009–2010 and 2016, from 69.6 per cent to 46.9 per cent under the methodology used for that historical comparison.
This represented significant progress during the early years of state-building. It also illustrates why we must apply consistent methodologies when comparing results across different reporting periods.
More recently, the Government’s 16 September 2026 announcement, drawing on the 2024 Timor-Leste Living Standards Survey, reported that national monetary poverty declined from 41.8 per cent in 2014 to 37 per cent in 2024. This represents a 4.8 percentage-point reduction over ten years.
We should welcome this progress as a national achievement, reflecting the collective efforts of successive administrations, institutions, communities and development partners.
However, these findings also remind us how far we still have to go. Monetary poverty affects 45.5 per cent of the rural population, compared with 18.4 per cent in urban areas.
This disparity highlights an enduring challenge: the benefits of national development have not yet reached all communities equally.
We should not compare the 37 per cent national monetary poverty estimate directly with the 48.3 per cent multidimensional poverty estimate as though they measure the same conditions or cover the same period.
Rather, we should understand them as complementary perspectives. One examines economic resources and consumption, while the other examines overlapping disadvantages in essential aspects of human well-being.
Together, they reinforce the need for development policies that address both household purchasing power and access to essential services.
Rural development must become a national priority.
For Timor-Leste, one of the clearest lessons is that we must approach poverty reduction geographically as well as economically.
Much of our population still depends on agriculture and rural livelihoods. However, agricultural productivity, market access, irrigation, storage facilities, transportation and access to modern technology remain uneven.
In many rural communities, the challenge is not simply a lack of economic activity, but the limited capacity to turn hard work into reliable and sustainable income.
Farmers may produce maize, rice, vegetables, coffee and other commodities but struggle to earn reasonable returns because of high transport costs, post-harvest losses, limited processing capacity and weak market connections.
A stronger rural development strategy must therefore go beyond agricultural production alone. It should connect agriculture with infrastructure, local industries, cooperatives, financial services, markets and appropriate technologies.
The Government could prioritise integrated rural development programmes in municipalities with the greatest concentrations of deprivation. These programmes should combine improvements in water and sanitation, roads, health facilities, schools, irrigation and agricultural value chains.
Municipal governments and local communities should actively identify priorities, monitor implementation and assess results.
This approach would also help ensure that national investments respond to communities’ actual needs rather than relying solely on centrally determined development priorities.
The objective should be clear: rural development must create sustainable livelihoods, not merely deliver infrastructure projects.
Human capital underpins lasting progress.
The report’s findings on health and education are equally significant.
Education remains one of the most important instruments for breaking the intergenerational transmission of poverty. However, expanding access to schooling must go hand in hand with improvements in learning outcomes, teacher preparation, language support, educational facilities and the relevance of skills to the labour market.
For a country with a predominantly young population, investment in education is inseparable from the future of the national economy.
Young people need opportunities not only to complete their education but also to secure productive employment, establish enterprises and contribute meaningfully to national development.
This requires closer coordination between education policy, vocational training, private-sector development and national employment strategies.
The health dimension presents another important challenge.
Malnutrition, inadequate maternal and child health services, preventable diseases and difficulties in accessing quality care can undermine human development throughout a person’s lifetime.
A child affected by chronic malnutrition may experience lifelong consequences for learning, health and productivity.
We should therefore recognise investments in maternal health, early childhood development, nutrition, community health services and preventive care as investments in the country’s future productive capacity.
Addressing multidimensional poverty also requires recognising that health, education, and economic development reinforce one another.
Healthy children learn better. Better-educated young people have greater opportunities for productive employment. Stable livelihoods let families invest more in nutrition, education, and housing.
Breaking the cycle of poverty requires strengthening these connections rather than treating each development challenge in isolation.
Social protection must create pathways out of poverty.
Timor-Leste has established social protection arrangements that support veterans, older persons, vulnerable households and families facing hardship.
These programmes play an important role in national solidarity, social protection and stability.
However, the central policy challenge is to ensure that social protection does more than provide temporary relief.
For households able to participate in economic activities, the Government should increasingly complement social assistance with access to skills training, productive assets, financial services and employment opportunities.
For older persons, persons with disabilities and others requiring sustained assistance, adequate and predictable social protection remains essential to preserving dignity and security.
This approach recognises that different forms of vulnerability require different policy responses.
The Government could strengthen coordination between social protection programmes and local development initiatives, using reliable household information and transparent eligibility criteria to improve effectiveness.
Such coordination would also reduce fragmentation, ensure assistance reaches those who need it most, and connect social support with broader development opportunities.
The ultimate goal should be to protect people against hardship while helping those who can move towards greater economic independence.
The challenge of transforming petroleum wealth into human development.
Timor-Leste’s Petroleum Fund represents one of the country’s most important national achievements.
It reflects a collective decision to manage finite petroleum resources for present and future generations.
However, substantial sovereign financial assets do not automatically guarantee high living standards or a diversified economy.
The central economic challenge is to transform national wealth into productive capacity, sustainable employment and improved human well-being.
Public expenditure has supported reconstruction and infrastructure development. Nevertheless, reducing multidimensional poverty over the long term requires an expanding domestic economy capable of generating employment and income beyond the public sector.
This is particularly important as petroleum production has declined and the country’s continued reliance on Petroleum Fund withdrawals raises serious questions about long-term fiscal sustainability.
The next stage of national development should therefore place greater emphasis on agricultural productivity, tourism, fisheries, small and medium-sized enterprises, skills development and domestic value creation.
The Government should increasingly assess public investment by whether it reduces development constraints, creates opportunities for productive economic activity and improves the delivery of essential services.
Economic diversification is not simply about generating alternative sources of government revenue.
It is fundamentally about creating opportunities for people to earn a living, participate in markets and improve their families’ well-being.
The long-term success of managing petroleum wealth will depend not only on how carefully we preserve financial resources, but also on how effectively we convert those resources into lasting productive and human assets.
ASEAN membership creates opportunities, but also responsibilities.
Timor-Leste’s accession to ASEAN in October 2025 represents an important milestone in the country’s regional integration.
Membership creates opportunities to deepen trade, attract investment, expand connectivity and strengthen cooperation in education, technology, agriculture and economic development.
However, regional integration alone will not eliminate poverty.
To benefit meaningfully from ASEAN membership, Timor-Leste must strengthen domestic productive capacities, improve competitiveness and equip its workforce with the skills required to participate in regional markets.
Without these complementary measures, deeper integration could increase competition for domestic producers without generating corresponding benefits for workers and local businesses.
The objective should therefore be to use ASEAN membership as a tool for national economic transformation.
Policies that support farmers, entrepreneurs, cooperatives and young professionals could help connect the domestic economy to wider regional opportunities.
At the same time, improving product standards, logistics, business services and access to finance would help domestic enterprises compete more effectively and participate in regional value chains.
We should ultimately assess the success of integration not only through diplomatic achievements or trade agreements, but also through new employment, higher productivity, improved household incomes and stronger national economic resilience.
ASEAN membership offers an opportunity. Our domestic policies will determine how widely our people share its benefits.
The role of the United Nations and development partners.
The United Nations has been an important partner in Timor-Leste’s journey from conflict towards peace, democratic governance and sustainable development.
We should understand the UNDP–OPHI Multidimensional Poverty Index in the context of this longstanding partnership.
The MPI is a global statistical instrument jointly developed and published by UNDP’s Human Development Report Office and the Oxford Poverty and Human Development Initiative at the University of Oxford.
It does not constitute a separate assessment of any particular government’s performance.
Its value lies in providing evidence that can help countries identify overlapping disadvantages, understand the different dimensions of poverty and design more effective development responses.
The UNDP Country Programme for Timor-Leste 2026–2030 and the United Nations Sustainable Development Cooperation Framework for the same period provide opportunities to align international assistance with national priorities.
These frameworks emphasise inclusive development, resilience, stronger institutions, improved livelihoods and the principle of leaving no one behind.
The World Bank, Asian Development Bank and bilateral partners also play significant roles by providing technical expertise, financing and support for institutional development.
However, external assistance should complement, rather than replace, national leadership and ownership.
Development partners can contribute most effectively when they coordinate assistance around measurable national outcomes, institutional capacity-building and long-term sustainability.
For Timor-Leste, the priority should be to build a coherent partnership in which government institutions, municipalities, civil society, communities and international organisations work towards shared development objectives.
The partnership’s effectiveness should ultimately depend on the results it delivers for people, especially those living in rural, remote, and underserved communities.
A practical national agenda for 2027–2030.
As Timor-Leste approaches the final years of its Strategic Development Plan 2011–2030, the MPI findings provide an opportunity to reassess national priorities and strengthen implementation.
I would propose six interconnected directions.
First, establish a more current and comprehensive evidence base.
The Government, through the National Statistics Institute and relevant ministries, should work with UNDP, OPHI and other technical partners to update multidimensional poverty measurement using recent household information wherever the necessary indicators are available.
The 2024 Living Standards Survey provides an important starting point, but a careful technical assessment is needed to determine whether it can support a fully comparable global MPI.
Reliable, timely information would allow policymakers to identify where deprivation persists, assess changes over time, and direct resources more effectively.
Second, place rural poverty reduction at the centre of the next medium-term development programme.
The Government should direct more resources to municipalities and communities with overlapping deprivation, prioritising basic services, productive infrastructure, and rural livelihoods.
A geographically targeted approach would help address rural-urban disparities while strengthening local economic opportunities.
Third, strengthen investment in human capital.
The Government should treat health, nutrition, education, early childhood development and vocational skills as interconnected national priorities, supported by clear performance indicators and sustained financing.
Greater coordination between these sectors would help ensure that improvements in one area reinforce progress in others.
Fourth, improve the effectiveness of public expenditure.
We should assess every major development programme not only by its budget allocation or completion rate, but also by the measurable benefits it delivers to households and communities.
This requires stronger monitoring, evaluation, transparency and accountability.
The central question should not be how much the Government spends, but whether public expenditure produces meaningful, lasting development outcomes.
Fifth, accelerate productive economic diversification.
The Government should support agricultural value chains, fisheries, tourism, entrepreneurship, and private-sector employment through a coordinated approach that connects infrastructure, skills, investment, and market access.
Such an approach would help transform public investment into opportunities for productive employment, increased household incomes and stronger domestic economic resilience.
Sixth, establish a national results framework for reducing multidimensional poverty.
Such a framework could set measurable targets for health, education, water, sanitation, housing and household resilience.
The Government should report progress regularly and disaggregate findings by municipality, gender, age and other relevant characteristics wherever reliable data are available.
This would help policymakers identify which programmes deliver results, which communities remain underserved and where further action is necessary.
Together, these six directions would help shift national development planning from a predominant focus on activities and expenditure towards a stronger emphasis on outcomes and measurable improvements in people’s lives.
Poverty reduction is ultimately about human dignity.
Development debates often focus on figures, rankings and international comparisons.
Such measures help us assess progress and identify challenges. However, poverty is not simply a statistical category.
Behind every percentage is a child whose education may be interrupted, a mother who struggles to obtain adequate health care, a farmer who cannot access a market or a young person who cannot find meaningful employment.
Behind the statistics are families making difficult decisions about food, transport, schooling, medical treatment and other household necessities.
For Timor-Leste, the ambition of development must therefore extend beyond reducing the numerical incidence of poverty.
It must expand people’s capabilities, strengthen their resilience and enable them to participate fully in the country’s economic and social life.
That is the deeper meaning of multidimensional poverty reduction.
Conclusion: From national achievements to improvements in everyday life.
The 2026 United Nations Global Multidimensional Poverty Index reminds us of historical deprivation and offers a valuable framework for national reflection.
We should not interpret the previously reported country estimates as evidence that almost half of the population necessarily remains multidimensionally poor today, because the underlying national survey dates from 2016.
Nor should these findings diminish the genuine achievements Timor-Leste has made over the past two decades.
Rather, the report should encourage a forward-looking assessment of how the country can accelerate progress while strengthening the quality, inclusiveness and sustainability of development.
The Government’s September 2026 findings on declining monetary poverty provide grounds for encouragement. However, persistent rural deprivation and the deep history of multidimensional poverty show why sustained, coordinated policies remain essential.
As Timor-Leste advances through ASEAN membership and approaches the 2030 development milestone, the quality of national progress will increasingly depend on our ability to connect economic growth, public investment, institutional effectiveness and social protection with tangible improvements in people’s lives.
The challenge is not only to spend more, but to spend better; not only to build more, but to ensure that what we build serves communities effectively; and not only to achieve economic growth, but to make that growth inclusive, productive and sustainable.
Ultimately, the true measure of Timor-Leste’s development will not be the size of its national budget, the value of its sovereign wealth or the number of infrastructure projects completed.
It will be whether a child in a remote village can grow up healthy, receive a quality education, find meaningful opportunities and build a more secure future.
That is the promise of independence, the purpose of national development and the responsibility we share towards the next generation.
Disclaimer: The views expressed in this article are personal and intended to contribute to public discussion on poverty reduction and sustainable development in Timor-Leste. They do not represent the official position of any institution with which the author is affiliated. The article draws on publicly available information, including official reports and statistical publications. The data and interpretations may be revised as the relevant institutions publish updated findings or methodological clarifications.