New Zealand has agreed on a ground-breaking long term aid programme with East Timor, says Associate Minister of Foreign Affairs and Trade Matt Robson.

The programme is the first country-to-country aid package to be negotiated by the emerging East Timorese administration.

"Many countries and agencies are helping the East Timorese prepare for independence and we're very pleased they asked New Zealand to join them around the table for their first major aid talks," says Matt Robson.

"It shows that the East Timorese have considerable trust in New Zealand and it's a great vote of confidence in what our aid workers, diplomats and soldiers have been doing in East Timor under the most difficult conditions."

The director of East Timor's National Planning and Development Agency, Emilia Pires, said the signing of the aid arrangement "set a trend for working with other international donors and marked an important step in the democratic evolution of East Timor".

The aid programme agreed in Dili last week marks a shift from emergency assistance from New Zealand to longer-term strategic development centred on poverty reduction.

Some $10 million in New Zealand Official Development Assistance (NZODA) funds is scheduled to be spent over four years on projects focusing on basic education, social and natural resource development and governance.

"New Zealand is making a serious commitment to East Timor's future peace and stability. We believe it's vital that other countries, as well as the UN and its agencies, stay effectively engaged to make sure the transition to independence is a success," says Matt Robson.

East Timor is scheduled to hold elections for a constituent assembly on August 30. The assembly will decide how the country is to be governed after independence, the date for which is yet to be decided.

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