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The World Bank’s Community Empowerment and Local Governance Project (CEP) was the key donor programme to assist with community reconstruction in a newly independent Timor-Leste. Commencing in 2000, the US$18 million project provided funds to over 400 local development councils that had been newly created to meet their community’s development needs. Rather than creating genuine participatory structures, tight deadlines to disburse project funds and bureaucratic project rules reduced the councils to little more than transmission lines to Bank-controlled dollars. By bypassing existing governance structures, including that of the fledging government, the councils also bypassed sources of local legitimacy and technical knowledge, which resulted in community conflict, indifference, and poor project sustainability. The CEP’s poorly administered microcredit scheme led to a proliferation of unviable kiosks – underlining the folly of hastily attempting to construct a market economy on a deeply scarred subsistence economy.

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