Should An Independent East Timor Join the World Bank?
Presently the World Bank has influence in East Timor because it has been entrusted to manage the funds donated to the people of East Timor by several countries, including Australia, Japan and Portugal. Although the World Bank is not lending money, it has power because (i) UNTAET has invited it in (ii) the donor countries have placed it in a position of trust, and (iii) because East Timor does not yet have a properly constituted Government. However when the US$520 million of Trust Fund moneys are spent, and when East Timor has its own Government, what will be the role of the World Bank? The Bank only operates in states which are World Bank members. Will East Timor join the World Bank? The incentive to join would be to gain access to the cheap loans of the International Development Association (IDA) – the ‘soft loan’ arm of the World Bank. Long term loans with only 1% interest are available to very poor countries – but only if they agree to comply with World Bank economic policy conditio
