Timor-Leste country brief

Overview

The Democratic Republic of Timor-Leste is situated on the island of Timor, approximately 700km northwest of Darwin. The capital of Timor-Leste is Dili.

Timor-Leste and Australia have a close relationship based on proximity, history and people-to-people links. Australia has been at the forefront of international support for Timor-Leste since its independence in 2002, not only as the largest bilateral donor of development assistance, but also by providing a leadership role to ensure security and stability in the country.

Timor-Leste has a population of around 1.2 million. The official languages of Timor-Leste are Tetum and Portuguese, while English and Indonesian are working languages. Approximately 95 per cent of Timorese are Catholic.

Political overview

Timor-Leste achieved formal independence on 20 May 2002. Timor-Leste's independence resulted from the August 1999 UN-sponsored referendum.

The first democratic legislative elections were held on 30 August 2001 and over 91 per cent of Timor-Leste's eligible voters elected a Constituent Assembly. In March 2002, the Constituent Assembly approved Timor-Leste's Constitution (based on the Portuguese model).

Under the system, a President with limited executive power is directly elected as head of state. The Prime Minister is the head of government and is formally appointed by the President but usually will be the leader of the political party that can form a majority or majority coalition in the unicameral national parliament.

The current Prime Minister, Dr Rui Maria de Araujo, was appointed the head of the Sixth Constitutional Government on 16 February 2015, following the resignation of former Prime Minister Xanana Gusmão. Former Chief of the Armed Forces, Taur Matan Ruak replaced Dr Jose Ramos-Horta as President on 20 May 2012 following elections in March and April. Parliamentary and Presidential elections are expected to be held in 2017.

Legislative elections Presidential elections
Last held 7 July 2012 17 March 2012 (run-off following first round on 16 April 2012)
Key results National Congress for the Reconstruction of Timor (CNRT) (36.7%) Mr Taur Matan Ruak (61.23%)
Fretilin (29.9%) Francisco ‘Lu’Olo’ Guterres (38.77%)
Democratic Party (PD) (10.3%)
Frenti Mudansa (3.1%)
Term duration Five years Five years
Next elections Due by mid-2017 Due by mid-2017

Economic overview

Timor-Leste aspires to become an upper middle income country by 2030 and has set down a clear development agenda through its Strategic Development Plan 2011-2030.

Despite impressive progress since independence, the country’s economic challenges are considerable. Timor-Leste remains one of the most oil-dependent countries in the world with oil and gas revenues accounting for 70 per cent of GDP and almost 90 per cent of total government revenue between 2010 and 2015.

The key challenges facing Timor-Leste are the diversification of economic activity from public to private, and from petroleum into other sectors, while maintaining a sustainable fiscal position and improving services.

Doing business remains a challenge, with Timor-Leste placed 173 out of 189 in the World Bank’s 2016 ease of doing business rankings.

With two-thirds of its 1.17 million population living on less than US$2 a day, Timor-Leste remains one of the poorest countries in the region Most of Timor-Leste’s population live in rural areas and are heavily reliant on subsistence agriculture with little or no access to markets.

Finance and banking

The US dollar was adopted as the official currency in January 2000. Timorese coins in denominations of 1, 5, 10, 25 and 50 centavos were introduced in November 2003 to enable small denomination transactions and partially assist with monetisation of the economy.

Legal and judicial issues

Timor-Leste's legal system is based on civil law. Although a broad range of legislation has been promulgated, further strengthening of legal and judicial frameworks will be key to promoting economic development and effective governance in Timor-Leste, particularly the law on land ownership, which is currently before the Parliament. Important commercial legislation that has already been passed by Parliament includes an investment law, commercial registry and tax legislation.

The Timorese Constitution does not permit foreign land ownership, although leases and joint venture arrangements are possible.

Bilateral relations

The Australian people have a special affinity with Timor-Leste stretching back decades.

Security and Defence Cooperation

Australia was in the front-line of support for Timor-Leste's transition to independence and led the multinational INTERFET force which restored security in Timor-Leste following the 1999 post-independence ballot violence.

Australia also led the 2006-2013 International Stabilisation Force (ISF), comprised of Australian and New Zealand Defence Force members. The ISF provided security back-up to the UN Integrated Mission in Timor-Leste (UNMIT) and remained in Timor-Leste at the invitation of the Timorese Government.

Australia's defence and police engagement with Timor-Leste continue through Australian Defence Cooperation Program and Australian Federal Police’s Timor-Leste Police Development Program.

Trade and investment

Australia is a significant partner of Timor-Leste’s in the oil and gas industry. Existing treaty arrangements provide 90 per cent of petroleum in the Joint Petroleum Development Area (JPDA) goes to Timor-Leste. Revenue of the yet to be developed Greater Sunrise field, 80 per cent of which is outside the JPDA, is split 50-50.

In 2014-15, total merchandise trade between Australia and Timor-Leste was valued at $37 million. Australian exports to Timor-Leste were valued at $34.5 million with major items including passenger motor vehicles and vehicle parts. Imports from Timor-Leste were valued at $2.6 million, with over half consisting of coffee. Timor-Leste has had preferential duty free access and quota free access to the Australian market since July 2003.

People to people links

The people of Australia and Timor-Leste share deep personal connections forged through shared experiences during the Second World War, the Timorese journey to independence, and the growth of the Timorese diaspora in Australia. Many Australians remain actively connected to Timor-Leste, including through the Australia-Timor-Leste friendship group network, and community and church groups.

Development assistance

More information on development assistance to Timor-Leste.

Australia Awards

Through the Australia Awards initiative, Australia provides scholarships for Timorese students, researchers and professionals to study in Australia. The Awards are an important part of the aid program in Timor-Leste and aim to: develop capacity and leadership skills so that individuals can contribute to development in Timor-Leste, and develop personal connections with Australia. Timorese nationals are eligible for long-term Awards (Australia Awards Scholarships and the Australia Awards Leadership Program) and short-term Awards (Australia Awards Fellowships).

Volunteers

The Australian Volunteers for International Development (AVID) program promotes economic growth and poverty reduction in the Indo-Pacific region by assisting host organisations to deliver effective and sustainable development outcomes.

Australia’s overseas volunteer program, Australian Volunteers for International Development, has a one-stop entry point to Australian volunteering.

Last Updated: 1 September 2016