Timor-Leste: The Path From Peace To Prosperity

Timor-Leste: the path from peace to prosperity

Standing underneath the 27m tall Cristo Rei statue of Jesus and staring back across at the beautiful city of Dili, it is hard to imagine that Timor-Leste is shrouded in a past of colonialism, occupation, and civil unrest. Timor-Leste (often referred to as East Timor) is the third newest country in the world and is full of amazingly resilient and kind people. Many of them are veterans and survivors of a brutal Indonesian occupation that only ended in 1999. I had the privilege to spend several months in the country at the start of this year working alongside many of these amazing people doing research on local security issues. While the country has come a long way in just two decades, there remains a number of obstacles on the path to prosperity. This article is my personal take on what is a complicated nexus of the Timorese development, oil dependency, and the country’s hopes for a prosperous future. 

A troublesome past: 

Timor-Leste was a Portuguese colony until 1975, when a coup in Portugal caused the European nation to abandon its colony. Just nine days later, Indonesia invaded the territory and declared it the country’s 27th province. 24 years of brutal occupation ensued in which it is thought that as many as 202,600 deaths occurred from violence, forced disappearances and famine. As many as 85,000 of these deaths were from famine and hunger. When you consider that Timor-Leste only had a population of 823,386 people in 1999, the scale of death and destruction becomes almost unfathomable. 

After years of the international community turning their backs on the Timorese people, the tide began to turn in the 1990s. International media began to give more attention to the atrocities going on in the country, particularly after the 1991 Santa Cruz Massacre in which at least 250 peaceful pro-independence demonstrators were shot by the Indonesian military. Support for Timorese independence grew rapidly in Portugal, Australia, and other Western countries. 

In 1999, a UN sponsored referendum on independence overwhelmingly passed and prompted an Indonesian state sponsored terror campaign against the Timorese people in which it is estimated that 70% of the country’s infrastructure was destroyed. That year an Australian led peacekeeping force (INTERFET) helped to restore peace in Timor-Leste. After two years of a transitional UN administration, on May 20th, 2002, the Democratic Republic of Timor-Leste was declared the first new country of the 21st century. 

In 2006, the country fell back into crisis after a faction of the military quit over allegations of discrimination against ‘Westerners’ by ‘Easterners.’ Factionalism and fighting between separatists and the military quickly spread, with the violence most prominent in the capital Dili. It is estimated that over 100,000 people were forced to leave their homes during the fighting. After a request from then Foreign Minister Jose Ramos Horta, Australia, New Zealand, Portugal, and the Phillipines sent troops to help support the Timorese in restoring order and peace to the country. 

Modern day Timor-Leste the challenges ahead

While I very briefly covered what is a troublesome history, you would be amazed at the positivity of the people you meet in everyday life. Everywhere I went I was met by smiles and offers of help with everything from language to directions, with people even going out of their ways to walk me across the city of Dili if I was lost. Never in my life have I seen such genuine random acts of kindness by strangers. 

This positivity is even more astounding when you look at the “facts” about the state of the country now. Timor-Leste ranks at 131 out of 189 countries on the UN’s human development index. The HDI gives a country a score based on factors such as life expectancy, income and education. To put things into perspective, at the 131st spot, Timor sits closer to sub-saharan African countries than it does to most of its South-East Asian neighbours. When the HDI is adjusted to account for the huge inequality in the country, Timor’s score is downgraded to just 0.450 which would place it just below that of Yemen, a country recently labelled the world’s worst humanitarian crisis. 

The Timorese Ministry of Finance reported in 2011 that about 40% of the population had to survive on $30USD per month or less. While newer figures aren’t available from the ministry, the country’s Gross National Income (GNI) in 2019 sat at just $1,890 USD (or about $160 a month). However, we should note that this is an average and a select few elite have a substantially more wealthy lifestyle than the average Timorese person. 

A huge portion of the country relies on agriculture for their food and income, making their livelihoods susceptible to the weather and disease. Many people I talked to said their crops had struggled through a particularly dry wet season in 2019/20. A trend likely to continue thanks to the effects of climate change. Because of this reliance on agriculture, 460,000 people (36% of the population) live in a state of food insecurity, according to a report by IPC. 

Development progress and the power of positivity

Despite these pressing issues, the Timorese people are overwhelmingly optimistic about the future of their country. It is not uncommon to meet amazingly talented people who speak upward of 3-4 languages, and the streets of Dili are flooded with bright eyed university students eager to make their impact on society. The efforts by citizens to improve their country has not been in vain either. 

Despite Timor’s low HDI ranking, the country has made astounding progress. In 1990, the average life expectancy was only 49 years and has now risen by 20 years to an average age of 69. The GNI increased by about 80% between 1990 and 2018, and the average time someone would spend in school has increased by two years in the same period. While two years may not seem like much, the rates of literacy in the country reached 84% in 2015. This is a remarkable feat when you consider that that rate was only 46% in 2004. 

The government has also spent upward of $2 billion USD on developing infrastructure that was destroyed by Indonesia at the end of the occupation. A huge project developing Tibar port is well under way and a recently completed airport in the South of the country are examples of promising development. Infrastructure projects are vital for the country to improve trading links with the region and pave the way for tourism, exports, and stimulate job creation. 

Additionally, according to the Economist’s 2018 Democracy Index, Timor-Leste is the most democratic country in South-East Asia. This is a fact verified by the World Bank and the EU. Timor-Leste proudly boasts a 30% quota for the number of women of parliament and at the last election 35% of the seats in parliament were occupied by women. Very few other countries in the region can boast this level of participation by women in their governance systems. 

Timor’s freedom of press also ranks highly, with no journalist ever having been jailed in direct relation to their work. However, this does not mean that pressure on journalism and media does not exist. Currently, the country sits in the 78th spot for freedom of press. A rating that is higher than all of its regional neighbours but still has a long way to improve upon. 

Timor-Leste’s path to prosperity is undeniably promising, with the UNDP projecting that the country will move on from its current status as a “least developed country” as soon as 2021. The rate of development in Timor is something many countries would be envious of, but the majority of the funding behind this development comes from a less than ideal place – an oil field in the Timor Sea.

No need for an oily future? 

The revenues from oil and gas have funded a $16 billion USD sovereign wealth fund which fuels the state budget. Timor-Leste’s state budget is currently 90% funded by revenues from oil and gas, making it the second most oil-dependant country in the world. While this may seem like a big issue (and it is) it should be acknowldeged that the oil revenue has done a lot for lifting large portions of the Timorese people out of poverty. At the end of the day, every developed country in the world relies at least in part on oil and gas to power everyday life. So why should Timor move away from an oil based economy? The answer to this lies in several parts. 

Timor’s oil lies in the Bayu-Undan and Greater Sunrise oil and gas fields. Bayu-Undan holds about 350-400 million barrels of oil and the Greater Sunrise has about 200 million barrels as well as large reserves of natural gas. While this may seem like a lot, it pales in comparison to giants like Saudi Arabia who produce upwards of 10 million barrels a day. To make matters worse the Bayu-Undan field is expected to run dry of natural gas as soon as 2021. With the clock ticking on the supplies, economic diversification is more important than ever. A pressing example of the need to diversify came when oil prices recently turned negative for the first time in history, meaning Timor’s oil was worth less than nothing.

To make matters worse, this oil is potentially some of the hardest to extract in the world. Timor’s government is adamant that it wants to process the oil on Timorese soil at a place called Tasi Mane rather than in a plant in Darwin where the existing pipeline runs to. The issue with this is that for the oil to be processed in Timor it must construct a pipeline over a deep sea trench called the Timor Trough that reaches a depth of over 3,300 metres. The cost for this construction is immense and has prompted a lot of corporate partners in the project to pull out and sell their shares. 

With all these issues, does Timor-Leste need to insist on an oil based future? 

Timor-Leste’s natural beauty and vibrant culture give it immense potential as a tourism hotspot. The country boasts stunning beaches, mountains, jungles and some of the best coral reefs in the world. In fact, the country sits on the southern edge of the Coral Triangle and one dive site by Atauro Island boasts the third highest recorded biodiversity of any reef on the planet. The untapped potential of tourism is slowly becoming more known. 

In 2017, the Asia Foundation estimated that 12,500 tourists came to Timor-Leste for the sole purpose of leisure. Although this is hard to calculate because almost every worker has to enter the country on a short-term tourist visa and then change this to a work visa once in country. This number is up from an estimate of just over 6,000 in 2011, showing the growth in Timorese tourism. 

Agriculture also has huge potential for growth in Timor-Leste. The country is fast gaining a reputation for growing amazing coffee. Coffee is already Timor’s largest non-oil export and accounts for 0.2% of the global coffee trade. While this may seem like a small share of the industry, for a small country it should not be underestimated. Timor even has its own variety of coffee – the Timor Hybrid. This variety is already receiving international acclaim for its resistance to disease and high yields. 

Perhaps Timor-Leste’s biggest potential lies in its people. As mentioned above, major progress has been made in increasing literacy rates and the number of years children spend in school. This progress is likely to continue. UNICEF estimates that for every extra year someone spends in school, their average earnings increase by 10%. As already mentioned, Timorese people on average speak at least three languages, and this shows the immense untapped potential that a strong education system could help unlock. 

The Timorese people’s positivity and enthusiasm for bettering their future gives me high hopes for the country’s future. While issues from the past and economic challenges remain, the progress that the country has made in just two decades is undeniable. Timor-Leste is a nation full of untapped potential and should be given all the credit that it deserves. 

Hau hakarak la’o ba Timor-Leste fali la kleur. 

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