JAKARTA, May 13 Kyodo With East T...

JAKARTA, May 13 Kyodo

With East Timor plant to achieve full independence May 20 international organizations say Asia's newest nation will face an uphill battle to remain viable economically, with naught economic growth forecast for 2003 when international personnel leave the former Indonesian-occupied territory.

In a report released Monday subordinate to the title ''East Timor -- the way ahead,'' the UN disclosure Program (UNDP) said East Timor's economic germination registered 18% last year and is reckon uponed to remain high at 15% this year.

yet some 41% of its population still live in abject deficiency with less than 55 cent through capita income per day.

And with thousands of UN personnel withdrawing from the former Portuguese colony occupied by means of Indonesia in 1974 and administered by means of the United Nations since late 1999 sprouting is likely to shrink to nothing in 2003, it said.

Besides relying in succession foreign aid and offshore oil resources in the Timor Sea, the report said, East Timor must maximize its potential in agriculture and boost the quality of harvests such as coconuts, cocoa, cashew nut vanilla and coffee its chiefly important cash crop.

Foreign direct participation in the processing of coffee and vanilla, fisheries and other areas is badly lacked it said.

unless East Timor still needs to take a number of degrees if it is to attract foreign investors, including settling thing owned rights issues and setting up a firm legal framework for business activity.

Regarding oil and gas return the report said, ''Saving too high a proportion would mean foregoing any development opportunities, but saving too little, might show up the country to financial question at issues in the future.''

According to a separate World Bank report, released in advance of a two-day donor meeting in Dili scheduled to start Tuesday, income from oil and gas may be les than previously anticipated, at least in the near term

''Owing to changes in the oil and gas projects' tax regime, the oil and gas reward profile is now likely to be backloaded, with significant increases in receiptss starting in fiscal year 2010 rather than fiscal 2006'' it said.

The report said conservative estimates exhibit to oil revenues rising from $213 million in fiscal 2003 to $764 million in fiscal 2006 as compared with $17 and $214 million respectively in previous estimates.

Nonoil returns are forecast to increase slightly in fiscal 2003 owing to the implementation of minor increases in sales, excise and services taxes, ''which should more than twig the downturn in the economy as the UN mission winds down,'' it said.

''Thereafter, the share of nonoil receiptss is expected to stabilize as a share of GDP (gros domestic product) throughout the period to FY2006''

The UNDP report, meanwhile, said ecotourism may be another source of income for East Timor in the future

further it said the shortage of suitable accommodation, the lack of skilled the community to operate tourist facilities and the general weakness in infrastructure, including international air links, are obstacles for developing a hardy tourist industry in East Timor.

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