Timor-Leste’s economic future hinges on bold, private sector-led reforms to diversify beyond oil and attract sustainable investment. Yet the challenge for fragile markets like Timor-Leste is not only accelerating growth but ensuring that growth is inclusive in a context of heavy petroleum dependence, limited private sector capacity, and deep structural vulnerabilities. But who benefits, and whether reforms can create jobs, empower women, and reduce inequality, will define whether economic transformation truly delivers for the nation.

This became clear to me years ago during my work in Indonesia’s East Nusa Tenggara province with Australia-Indonesia Partnership for Promoting Rural Incomes through Support for Markets in Agriculture (PRISMA). I met Ibu Maria, a hardworking mother of two who farmed peanuts and raised pigs. PRISMA’s strategy in peanuts helped farmers like Maria improve productivity and income. But, when peanuts became more profitable, her husband gradually took over the peanut farming, leaving her without access to the very income she had helped build.

That experience was an eye-opener. It showed me that while growth can be achieved, equitable growth is far more complex. Without deliberate attention to gender, disability, and social inclusion, the benefits of market transformation risk bypassing those who need them most.

This lesson is especially relevant now for Timor-Leste.

Recent data underscores the urgency of promoting equitable economic growth in Timor-Leste. The 2022 Census shows that 7.9% of the population aged 5 and above lives with a disability. Employment among persons with disabilities remains very low at around 19.6%, with women particularly disadvantaged at approximately 15–16%, compared to men at about 23%. Many persons with disabilities are concentrated in subsistence agriculture or vulnerable informal work, with limited access to services, finance, and decision-making opportunities. These figures highlight persistent barriers to inclusion and the need for targeted interventions to ensure equal participation in economic and social life.

Australia’s Market Development Facility (MDF) identified that these inequalities remain central barriers to economic transformation. While MDF interventions in agriculture, tourism, and coffee are opening opportunities for women and youth, persistent gaps in economic participation underscore why Timor-Leste’s next phase must focus not only on growth but on equity.

This is where Palladium’s experience offers valuable insights.

Lessons from Palladium’s Programs

Across Asia and the Pacific, we have seen that equitable economic growth is possible when private sector development deliberately embeds gender equality, disability, and social inclusion (GEDSI) as part of its growth strategy.

PRISMA
PRISMA’s decade-long work in eastern Indonesia demonstrated that women, youth, and people with disabilities are not passive beneficiaries but active economic agents when markets are designed to include them. By the program’s completion, 38% of beneficiaries were women, 25% were youth, and 476 persons with disabilities also benefited directly. PRISMA piloted approaches, such as tailored agronomic services for women farmers and universal design in input distribution networks, to reach farmers with disabilities. PRISMA’s facilitation helped 13 private companies integrate disability inclusion, seven companies implement youth-inclusive business models, and two companies implement indigenous-inclusive business models.

One such case is Martini, a dairy farmer from Boyolali, East Java, who lives with a mobility disability. In 2023, PRISMA introduced a disability-inclusive business model to Nufeed, a company known for its animal feed that boosts milk production and animal health. This collaboration took a successful product and made it accessible to farmers with disabilities, like Martini. Martini not only improved her productivity and milk yields but also became a local feed agent, selling six-to-seven tonnes of feed per month. Her increased income elevated her family’s well-being and positioned her as a leader in her community. Martini’s journey shows how disability-inclusive design can unlock economic potential that benefits both households and businesses.

PRISMA also measured women’s economic empowerment outcomes, finding improvements in women’s decision-making power and control over income. Importantly, more than 39 private sector partners adopted gender-inclusive practices, demonstrating that inclusion can align with business incentives.

MDF
MDF has been steadily building inclusive market systems in Timor-Leste for several years. By 2024, MDF-supported businesses generated AUD 13 million in additional revenue and benefited over 86,000 people. Many of these households are female-headed or include young people, reflecting the program’s deliberate focus on widening participation. In the coffee sector, MDF partnered with processors and exporters to improve quality and productivity, ensuring that women coffee farmers were not excluded from training and leadership opportunities. In tourism, MDF supported enterprises that created new wage jobs for youth.

For example, MDF supports ReLoka, a social enterprise employing women and people living with disabilities. ReLoka creates handicrafts using hand embroidery, silk screening and recycled glass. With MDF's support, ReLoka is introducing a new product line that incorporates dyeing ingredients in its fabric products, revitalising a traditional Timorese craft. The intervention promotes social inclusion, providing job opportunities for women and people with disability, often in leadership roles. In 2024, MDF's support helped ReLoka employ two additional people with disabilities and purchase dyeing ingredients from 25 people, earning them an additional USD6,400 (AUD9,600).

BPP
The Business Partnerships Platform showcases how blended finance can scale inclusion. By co-investing with businesses, BPP has enhanced women's workforce participation, improved the livelihoods of smallholders, and promoted disability-inclusive practices. These partnerships reveal that inclusive strategies, such as gender-intentional supply chains, not only broaden markets but also build resilience. For fragile contexts like Timor-Leste, this blended approach shows how donor funds can catalyse private capital while embedding GEDSI in business models.

Across these programs, a few lessons stand out that could be applied in Timor-Leste:
• Inclusion drives scale: Women and youth are central to household and community economies; excluding them undermines sector growth.
• Private incentives matter: Inclusion is sustainable when businesses see commercial returns alongside social impact.
• Policy linkages are critical: PRISMA’s influence on Indonesian policy and MDF’s role in shaping Timor-Leste’s coffee strategy show how inclusive market practices can translate into systemic change.
• Disability inclusion has multiplier effects: Designing for accessibility opens markets not only to persons with disabilities but also to wider customer groups.

Together, these experiences confirm that inclusion is not a “nice-to-have”; it is a proven pathway to more resilient, competitive, and equitable economies in fragile markets.

Economic transformation in fragile markets like Timor-Leste cannot rely solely on growth. As I learned from Ibu Maria, productivity gains without attention to equity can unintentionally reinforce exclusion. True transformation requires ensuring that women, youth, and people with disabilities are not just present in markets, but active participants and contributors to the growth.

Our experiences through the private sector development programs shows that systemic inclusion is possible and profitable. It strengthens systems, empowers communities, and creates resilience against future shocks.

For Timor-Leste, the path forward is clear: growth must be equitable, if it is to be sustainable.

For more, read What Could Economic Transformation Look Like in Timor-Leste.