East Timor Economy Profile 2012

East Timor will celebrate its 10th anniversary of formal independence on 20 May 2012.

Like amount nations emerging from conflict and fragility, East Timor has faced significant challenges. Following the independence ballot in 1999, additional than thirds of the country’s infrastructure was destroyed, health and education services collapsed, and the country was left with very few experienced or qualified people. The road to recovery has been difficult—people in fragile and conflict-affected states are additional than twice as likely to be under-nourished as those in other developing nations, additional than three times as likely to be unable to send their children to school, and twice as likely to see their children die before age.

In this context, East Timor has made good evolution and has a lot to be proud of —it has for example achieved its Millennium Development Goal targets for infant and under mortality rates, and for antenatal care coverage, despite having of the highest birth rates in the region. The increasing stability and solid economic increase of the last few years have put East Timor in a good position to build on these gains.

Australia has been East Timor’s major development partner over the last decade, and is working closely with the Government of East Timor to reduce poverty by helping to increase access to health services and education, boosting agricultural productivity, and improving rural infrastructure such as roads and water and sanitation systems.

East Timor still faces a lot of problems—poverty and malnutrition are widespread, maternal mortality rates are part the highest in the region, and there are few jobs for a growing people. But across the country, there are signs that life is changing for the better for a lot of East Timorese people, and Australian aid is helping to make a difference.

Timor-Leste is of the poorest nations in the world, with basic income, health, and literacy levels similar to those of nations in sub-Saharan Africa. Both infrastructure and resources are lacking in urban and rural areas. Unemployment and underemployment combined are estimated to be as high as 70%. Half of the country's people lives below the poverty line.

Oil and gas revenues have surged since 2005 as major projects in the Joint Petroleum Development Area that Timor-Leste shares with Australia have come online. The government set up a special Petroleum Fund in 2005 to facilitate the sustainable use of its revenues over the long term. Petroleum Fund assets reached $6.9 billion in 2010.

The economy is dependent on government spending (financed by petroleum revenues) and assistance from international donors. Private sector development has lagged due to human capital shortages and an inefficient regulatory environment.

FOREIGN RELATIONS

Timor-Leste joined the United Nations on September 27, 2002. It is pursuing membership in the Association of Southeast Asian Nations (ASEAN) and became a member of the ASEAN Regional Forum (ARF) in July 2005. Timor-Leste's foreign policy has placed a high priority on its relationships with Indonesia; regional friends such as Malaysia and Singapore; and donors such as Australia, the United States, the European Union, Japan, and Portugal.