Informal Sector Activities in Timor Leste

Paper author: 
Mata Dalan Institute (MDI)
Paper publication date: 
Friday, May 20, 2022

The Informal Sector in Timor-Leste has been severely impacted by COVID-19. This research by Timorese Organization Mata Dalan Institute (MDI), supported by Oxfam in Timor-Leste presents key findings about resources, opportunities and challenges that contributed and impacted on the informal sector in Timor-Leste during COVID-19 and State of Emergency periods in Timor-Leste.

The informal sector is defined by groups of unregistered household owned enterprises. Their economic activities are not formally protected under legislation for labour or social security. The informal sector makes an important contribution to the world economy: over 60 per cent of the global population of 7.9 billion is employed in the informal economy. International Labour Organization (ILO) research reveals that “93 per cent of the world’s informal employment is in emerging and developing countries” confirming that the sector plays a significant role in the “survival strategy” of many people. With little legal or social protection, many informal actors have few work rights and so are unlikely to have decent working conditions, particularly if they are women.

This survey engaged 400 economic agents (214 women and 186 men) including persons with disabilities (2 women and 3 men).

Key findings include the following:

  1. The data show that 93 per cent of respondents (49% women and 44% men), including people with disabilities, reported that public health controls significantly affected their activities and daily income in the informal sector. Only a small percentage was able to continue with their economic activities as normal.
  2. Informal Sector incomes reduce dramatically during COVID-19
  3. The Government subsidy of USD200 to household provided positives advantages to informal sector actors
  4. But most of the informal sector did not benefit from the Government’s economic recovery program
  5. Including the majority of the informal sector actors did not contribute their products to the food basket program

The Report also includes recommendations for policy makers around sites and facilities, financing, trainings, data, registration, and subsidies for the informal sectors.


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Oxfam in Timor-Leste

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Cover photo: Joana Carceres, Vegetable seller in Taibesi market / Oxfam in Timor-Leste