Promoting Caffeine-Fueled Economic Growth in Timor-Leste

By Paolo Spantigati

Paolo Spantigati, ADB Country Director for Timor-Leste, hopes a coffee festival will be the first step in the country’s bid to diversify its economy.

Timor-Leste’s economic outlook is encouraging - with expected growth rates of 5% in 2016 and 5.5% in 2017. But since declining oil royalties highlight a need to diversify sources of growth, the coffee industry is being considered to spur exports. 

Coffee has been Timor-Leste’s top non-oil export for the past 150 years. More than 25% of all households grow coffee, with an estimated 16,000 hectares of coffee plantations throughout the country.

Political conflicts and underinvestment in the sector in 1975-1999 contributed to a loss of farming skills among farmers and a legacy of aged trees. Since then, progress has been made in training farmers and rolling out replanting programs. Starbucks and other multinationals have started to source organic coffee from Timor-Leste, but local firms need to boost production and improve the quality of their beans to compete with established names, and gain easier and faster access to big markets.

ADB, UNDP and Australia’s Market Development Facility have helped establish the first professional coffee trade organization in Timor-Leste to help develop the sector and improve farmers’ incomes. The organization’s first major event was Festival Kafe Timor held on 28 November-3 December to promote the industry and celebrate the country’s long coffee history.