Tempo Semanal Exclusive - Timor-Leste Helps PDT Win: $528 million Pledged to PDT and other winners by the G20.

President Barack Obama, President Lee Myung-bak of South Korea, and Prime Minister Stephen Harper of Canada present an award to Scott Gilmore of Peace Dividend Trust at the SME (small and medium sized enterprises) Finance Challenge Award Winner Ceremony at the G-20 summit in Seoul, South Korea, Friday, Nov. 12, 2010. (AP Photo/Charles Dharapak)

On 12 November 2010 Peace Divident Trust (PDT) won not only one of the 14 G20 SME Finance Challenge awards but were also given one of three People's Choice Award and were thus presented with the award by President Obama and other leaders at the G20 Summit in Seoul, South Korea.  PDT won the award for a new project model  Factor Finance for Procurement.  World famous Forbes Magazine carried photos of the award ceremony here.  $528 million have been pledged by the G20 to PDT and the other winners.
This could not have happened had Timorese, in addition to (Haitians and Afghans) - members of the communities in which PDT currently work - not voted. On 5 November 2010 President Jose Ramos-Horta even called upon members of the public to vote for PDT.

South Korean President Lee Myung-bak (C), U.S. President Barak Obama (third from L) and Canadian Prime Minister Stephen Harper (third from R) pose with SME Finance Challenge Award people’s choice winners Scott Gilmore, Peace Dividend Trust executive director (L); Sylvia Beate Wisniwski, European Fund for Southeast Europe executive director (second from L); Obama, Myung-bak, and Harper; SME Finance Challenge Award people’s choice winner Onno Schellekens, Medical Credit Fund co-founder (second from right), and Bill Carter, Ashoka's diamond leader for Africa - at the closing of the G-20 Seoul Summit on Nov. 12.  

President Obama

On 12 November the Ashoke Foundation, organiser of the G20 SME Finance Challenge issued a statement that. "G-20 Commits More Than One-Half Billion Dollars to Challenge Winners People’s Choice Winners Announced for the G-20 SME Finance Challenge  (Washington, DC – November 12, 2010) At a ceremony closing the G-20 Summit in Seoul Korea, the G-20 agreed to commit a total of US $528 million to scale up the winning proposals to increase financing for small and medium enterprises (SMEs) from the online G-20 SME Finance Challenge. The Group of 20 and Ashoka’s Changemakers, with support from the Rockefeller Foundation, selected the 14 best worldwide models of catalyzing finance for small and medium enterprises (SMEs) through an online competition. Korea, the U.S., Canada, and the Inter-American Development Bank (IDB) have agreed to launch an SME Finance Innovation Fund and committed a total of US $528 million to support the fund. The form of funding provided to the winning proposals will vary based on their individual requirements, and may include grants for technical assistance or capacity-building, risk sharing or first-loss capital, mezzanine capital, and investment capital.

President Obama with Timor-Leste Ambassador to USA, Constancio Pinto (far right) and his family.

Ashoka reports that President Obama stated that “I am very pleased that we have been able to launch this concrete program through the G20 that is making a difference in people’s lives,” Obama said. “Between the Koreans, Canadians, and the U.S., we are going to contribute $528 million to put into practice some of the extraordinary ideas that are represented by the winners, and to boost the actual work they are already doing. When it comes to creating jobs and opportunity, often times it’s the small and medium sized enterprises that make all the difference in people’s lives, and one of the biggest challenges for such companies is to make sure they receive the financing that they need."


PDT Executive Director, Mr. Scott Gilmore told Tempo Semanal on 13 November from Seoul International Airport that ""It was very gratifying to see an idea that was born in Timor-Leste, being honoured on the world stage by President Obama and other leaders. We are grateful to the people of Timor-Leste for their support.  Their votes won PDT the G20 People's Choice award. I am also personally grateful for President Ramos-Horta's ongoing and vocal support for our work helping Timorese entrepreneurs and creating Timorese jobs."

The idea of PDT born in Timor-Leste during the UNTAET period 1999-2002.  During that time, PDT's Scott Gilmore, his colleague Edward Rees, and others were working for the UN and other international organisations in Timor-Leste following the 1999 Popular Consultation.  While they believed that the overall mission of the international community was a valuable one they were disappointed that so much money could be spent with so little impact and return on investment.  UNTAET and its successors were highly limited in getting much done largely due to do the fact that the way and means in which the international community operates in fragile and conflict affected states around the world is flawed.  According to Mr. Rees "We found that the system is resistant to new ideas and change, for political, bureaucratic and and practical reasons; but that change was and is still desperately needed".

One area in which PDT is concerned is how the international community spents its money.  So little is directed towards practical economic development.  Given the fact that peace rests in many ways upon a robust economic base it was an opportunity missed by UNTAET, and its partners that they were spending so little time and money on rebuilding Timor-Leste's economy.  UNTAET (and its subsequent missions UNMISET, UNOTIL and now UNMIT) and its partners have large procurement budgets that were/are making foreigners rich as opposed to the people that were the primary client - the Timorese. Timor's own Lao Hamutuk has detailed the gap between commitments and delivery in Timor aid in a September 2009 report.

Recently AusAID, Timor-Leste's biggest and most important donor, announced a major reversal in its Aid policy in Timor-Leste with a decision to dramatically reduce the number high paid consultants that they employ in Timor-Leste - recognising that they have had a bad approach in the last 10 years.  According to ABC News in Australia "Australia will phase out more than a third of its adviser positions in East Timor over the next two years. Australia's aid agency, AusAID, will cut 29 of its 82 advisory positions in East Timor in a shake up that is aimed at making its aid more effective. The move follows similar cuts for Papua New Guinea and is part of a review of how advisers are used across the whole AusAID system."  Mr. Gary Lee of Australia's AID WATCH is quoted as saying "It is a welcome step but it is overdue in the sense that Australia has a historical reliance, I would say over reliance, on technical assistance and the use of advisers within the aid programme. And what this has translated to is that a lot of the aid money ends up back in the hands of Australian companies, consultants and advisers, and not enough money is directed to the delivery of basic services."

Some years later after UNTAET PDT was founded and launched its first Peace Dividend Marketplace (PDM) project in Afghanistan in 2006, with follow on projects in Timor-Leste in 2007 and Haiti in 2009. According to Mr. Rees, "We plan to move forward with a PDM project in Liberia and perhaps also South Sudan in 2011."  He also stated that "We are hopeful that the international community and the Government of Timor-Leste adopt a Timor-Leste First policy, in which the procurement of local goods and services is prioritised as and where appropriate and practical, this type of policy has been adopt in other g7+ states such as Afghanistan, and is being strongly considered in Haiti."

According to Mr. Rees, "These projects create connections between international buyers and local suppliers to build capacity through direct experience, create wealth through the award of contracts and thus create jobs.  They are a brand new approach to rebuilding countries in the wake of conflict and other disasters."  He also added, " I would like to personally thank Ilidio Ximenes, Brigida Soares, Eduardo da Costa and the rest of the Timorese staff in Dili both past and present, as without their hard work this award would never have come to pass."

But PDT project in Timor-Leste remains under funded and its future beyond May 2011 is not certain.  According to Mr. Gilmore "We would like to ensure our Timorese supporters that PDT is working hard to secure additional donor funding that will allow us to continue our work in Timor-Leste".

To date PDT has been funded in Timor-Leste by AusAID, Norway, the Canada Fund, the Arsenault Family Foundation, and eni.