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Efforts to rehabilitate health systems after periods of prolonged conflict have often been characterized by poor coordination of external actors – multilateral agencies, donors and non-governmental organizations (NGOs). This paper describes the process and analyses the roles of the different stakeholders in the establishment of a government-led district health system in East Timor, between 1999 and 2002, after decades of chronic conflict and Indonesian occupation. Future East Timorese policy-makers and health professionals began to mobilize in May 1999, in preparation for independence. During the emergency phase, from September 1999, when violence erupted, to March 2000, NGOs played a major role in the provision of relief to the population, coordinated by United Nations agencies. An Interim Health Authority, led by local Timorese, was established in March and the major donors began to shift funding from NGOs to the newly established Ministry of Health. A rapid phasing-out of NGOs, accompanied by a sequence of steps to build the capacity of Timorese to manage the new district health system, was implemented. Early evidence shows that health service utilization continued to grow during and after implementation.