Question

How trade should be changed in East Timor. Should they choose different exports/imports? Should the government be more involved? less involved? Refer to import substitution and/or export promotion. (Please cite there the information is from?

Answer 1

1- EAST TIMOR-

1- East Timor have Mixed Economy-

1-The Government system is a republic, the chief of state is the president, and the head of government is the prime minister.

2-Timor - Leste has a mixed economy in which there is limited private freedom, but the economy remains highly controlled by the government.

3-Over the last 15 years, petroleum dependency has been the main feature of Timor's economy. Although on a downward trend , petroleum still accounted for more than 40 % of the overall GDP in 2017, and more than 90 percent of total exports .

4- If you import more than you export, more money is leaving the country than is coming in through export sales. On the other hand , the more a country exports, the more domestic economic activity is occurring. More exports means production, jobs and revenue.

5-If a country imports more than it exports it runs a trade deficit. If it imports less than it exports, that creates a trade surplus. When a country has a trade deficit it must borrow from other countries to pay for thr extra imports.

6-Exporting allows a country's producers to gain ownership advantages and develop low- cost and differentiated products. It is viewed as a low- risk mode of production and trade.

7-When a country exports goods , it sells them to a foreign market , that is, to consumers, businesses, or governments in another country. Those exports bring money into the country, which increases the exporting nations GDP .The money spent on imports leaves the economy, and that decreases the improving nation's GDP .

8 -East Timor has been an important issue for both  Indonesia and for Australia- Indonesia relations since 1975, when the collapse of Portugal's willingness to continue colonial rule (after the fall of the authoritarian Caetano regime in April 1974) was followed by an attempted declaration of independence in East .

9-Timor and then by invasion by Indonesia. Australia's interest in East Timor has reflected the legacy of contacts during World War Two ( when Australian commandos operated against the Japanese with assistance from many East Timorese), and controversy over the manner of Indonesia's invasion, the deaths of five journalists working for Australian media in October 1975 and ongoing allegations of human rights and other abuses while east timor has been incorporated as a part of Indonesia.

10- IMPORT SUBSTITUTION-

1-Import Substitution aims at reducing current imports by making some of them at home and use the savings in foreign exchange to import the desired goods.  

-EXAMPLE -

-Agricultural goods and on import substitution- that is , the manufacture ( often from imported materials and parts ) of products thst were once purchased from abroad .the principal industries are food processing, textiles brewing, and cigarette production.

11- EXPORT PROMOTION-

1- Export Promotion aims at increase in exports or means total activities of the government and state institutions, which have a positive impact on the export performance of the economy.

-EXAMPLE-

- Examples of grants and subsidies for exporters include the Market Access Program (MAP) and the Export Enhancement Program (EEP) .on the other hand EEP pays cash bonuses to exporters of certain U.S agricultural commodities Tax abatements also take their part in export promotion effort to the U.S firms .