In May 2002, Timor-Leste (formerly known as East Timor) became an independent nation. Violence had left the country and its families torn apart, with nearly 70 percent of all buildings, homes and schools destroyed, and an estimated 75 percent of the population displaced.
Over the past decade, Timor-Leste has created the conditions for successful development. It has credibly emerged from a crisis of internal violence and political instability in 2006/2007 and increased tangible services for the population, creating hard-won political stability, absence of conflict and a new confidence in the state. Largely peaceful democratic elections for President (March and May 2012) and Parliament (June 2012) reflect these achievements.
After 13 years of independence, Timor-Leste has achieved tremendous progress since being ravaged by conflict – drawing down money from the Petroleum Fund and channeling it through budget to meet pressing needs. The effectiveness of this process is evident in the near-halving of infant and child mortality rates; significant gains in health and education; economic growth to rival regional neighbors; increasing citizen participation, and the gradual strengthening of state institutions such as Ministry of Finance, Ministry of Defence, the police, courts and the judiciary.
In February 2015, Timor-Leste’s Prime Minister since independence, Xanana Gusmão, voluntarily stepped down and was replaced by Dr. Rui Araujo, a member of the opposition party FRETILIN and a trained medic. Gusmão remains in the Government as the Minister of the newly created Ministry of Strategic Planning and Investment.
Ensuring Timor-Leste’s young population are educated, healthy, and productively employed are arguably the biggest development challenges facing Timor-Leste over the next decade. With 60 percent of the population under 25 years of age, Timor-Leste is one of the youngest countries in the world. Benefitting from high global oil prices, Timor-Leste achieved lower middle-income status in 2011, but poverty remains persistently high, particularly in rural areas, where the majority of the population lives.
To create job opportunities for youth, sustain inclusive growth, and prepare for a future of potentially declining natural resource returns, Timor-Leste needs to diversify its economy and sources of revenue, elevate the quality of health and education services, and equip the population with viable skills. These efforts must be underpinned by capable institutions with a strong and consistent focus on quality of spending and policies that nurture private investment.
The World Development Report 2011 found that on average, post-conflict countries take between 15 and 30 years – a full generation – to transition out of fragility and to build resilience. It is against this backdrop that Timor-Leste’s social and economic development can be seen as remarkable.
The government’s Strategic Development Plan for 2011 – 2030 [external link] offers a vision, targets and indicators for the next two decades. It is built around four pillars:
i. Social capital: health, education and social protection;
ii. Infrastructure: including transport, telecommunication, power, and water supply and sanitation;
iii. Economic foundations: which target three sectors for development – agriculture, tourism and petrochemicals – to bring about growth, jobs, and new sources of public revenues beyond oil; and
iv. Institutional framework: which focuses on macroeconomic management and improving the capacity and effectiveness of government institutions.
Last Updated: Oct 06, 2015