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DILI – In one of Asia’s poorest countries, those who can afford it buy bottled water to drink from the sun-blasted street kiosks and dustblown shacks dotting the Timorese hills. For a third of the population, however, the only option is dirty groundwater.
“They draw it from the ground, this is not very healthy and causes kidney problems. I have seen it myself,” said Liu Bailing, a doctor who moved to Dili from Fujian in China more than a decade ago.
Liu said that this pervasive use of unsafe water prompted him to get involved with setting up Be’e Mor, East Timor’s first and so far only domestic water company. It first started selling bottled water in late 2013 and has already captured around 10 per cent of the local drinking water market, according to Liu. Its newly-equipped bottling plant stands near Dili’s scenic beach road.
It has a significant commercial advantage, as Indonesian water brands have to mark up their retail price by 50 per cent to cover the cost of exporting to East Timor, retailing at around US$5 for a case of 600ml bottles compared to about US$3.50 for Be’e Mor.
While hopeful that it can expand its market share to around 70 per cent, Liu acknowledges that Be’e Mor could face a struggle despite the low price.
“It is still a new brand. There are old brands from Indonesia that are set in people’s minds,” he said. Despite East Timor suffering a bloody 24-year occupation by Indonesia, during which at least 100,000 people died, Indonesian television, music and celebrity culture is popular and Indonesian products widely available.
Before Be’e Mor, all of East Timor’s bottled drinking water came from its giant neighbour and former nemesis.
Be’e Mor does have another advantage, however. It was founded by Nilton Gusmao, nephew of the country’s independence hero Xanana Gusma, who last month resigned as Prime Minister.
His almost eight years in office saw the economy grow at sometimes 10 per cent per year due to oil and gas revenues, although he also prompted criticism for awarding lucrative infrastructure contracts and business opportunities to well-placed insiders.
Gusmao’s time in office saw little dent made in another of East Timor’s economic problems. Its thirst for foreign water is but part of a wider import dependence, with almost all consumer goods sourced from abroad. In 2013, it spent US$535 million on imports, while non-oil exports totalled a miniscule US$16 million, nearly all of it coffee.
While East Timor has been improving its commercial environment, poor infrastructure adds to the costs and challenges for companies wanting to set up in the country of just 1.2 million people, which covers an area around half the size of Belgium.
In practice, there are many extra costs for local businesses. For Be’e Mor, for example, technicians needed to keep the water purification and bottling machinery going must be recruited from abroad as there are no qualified Timorese, said Liu Bailing. “Spare parts, too, have to be imported from China and Japan, so the maintenance and repair costs are high.”
It also costs time and money to truck bottled water around the tiny country, where it can take a full day just to negotiate the roads that wind the less than 100 kilometres from north to south. “We lose time travelling to districts every day,” Liu complained.
Nevertheless, the Timorese government has spent heavily in recent years on infrastructure including roads and the national power supply, improving lives for the 70 per cent of the population who live in often stark poverty in rural areas.
Bendita Fraga, a 40-year-old housewife living on a farm near Dili, said that electrification had allowed her family access to new sources of clean groundwater. Pooling with neighbours, the farmers in the village bought an electric pump to extract water from a newly drilled 12-metre well.
“With the pump, we can drink cleaner water and grow more crops with the extra water,” Fraga said. That would have been impossible before the government’s recent expansion of the power supply, which now covers around 60 per cent of the population.Show