According to a National Parliament Member, inflation is increasing as the exchange rate goes up.
MP Maria Adozinda Pires da Silva from Commission C (for public finance) said according to the public audience Commission C made with the Ministry of Finance (MF), inflation is caused by internal problems.
“If we reduce imports, we can decrease inflation within the country,” said da Silva, at National Parliament.
He said it was necessary to increase local food production to reduce reliance on imports.
“When our agriculture and private sectors are productive, we can compete,” said da Silva, MP of Frente-Mudansa bench.
He said another cause of inflation was the issue of public expense (salary increases of public servants).
Therefore, he urged the government that it was necessary to see the productivity when increasing the salary of public servants.
Meanwhile, MP Virgina Ana Belo urged the government to create an agreement which allowed it to control and have powers of intervention over the cost of goods in the market.
“The reality shows us that many shops are next to one another but the price of goods is different,” said Belo, MP of National Congress of Timor Reconstruction (CNRT).
MP Benvinda Catarina Rodrigues said another factor in rising inflation was traders’ tendency to pay importation taxes late, leaving good sitting at Dili Port for up to two weeks.
“If they get things down from Dili port to the shops automatically the price is increasing,” said MP of Frente-Mudansa bench.
She said the price of goods such as cement is cheaper in Indonesia but in Timor it was increasing.
“In Indonesia one sack of cement is $2.50 but we come to Timor especially in districts a sack of cement is sold at the price of $10.00 even $11.00, so this policy needs to be changed,” she said.
She is also concerned because local product price in the market within the country is increasing.
Prime Minister Kay Rala Xanana Gusmao said the government implemented lots of agricultural initiatives a few years ago to increase productivity by improving infrastructure, irrigation systems, seeds, fertilizers, and equipment.
He said in 2012, corn and paddy production was up on the previous year.
“So there’s an increase of agricultural products on some foods, in 2012 production increased to nearly 200,000 tons, while in 2011 was 100,000,” he said.
Gusmão said the figures were based on the amount of rice imported.
In 2011 almost 100.000 tons of rice were imported to Timor but in 2012 that figure fell to 40.000 tons, he said.
