In May 2002, Timor-Leste (formerly known as East Timor) gained independence. Violence had left the country and its families torn apart, with nearly 70%of all buildings, homes and schools destroyed, and an estimated 75%of the population displaced.
Over the past decade, Timor-Leste has created the preconditions for successful development. It has credibly emerged from a crisis of internal violence and political instability in 2006-2007, built a coalition, 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.
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. Xanana Gusmão remains in the Government as the Minister of the newly created Ministry of Strategic Planning and Investment.
Educating, keeping healthy, and productively employing its young population are the biggest development challenges facing Timor-Leste in 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 social and economic development in Timor-Leste can be seen as remarkable.
The government’s Strategic Development Plan for 2011 – 2030 offers a vision, targets and indicators for the next two decades. It is built around four pillars:
(i) Social capital, which is comprised of health, education and social protection;
(ii) Infrastructure, including transport, telecommunication, power, and water supply and sanitation;
(iii) Economic foundations, which targets three sectors for development – agriculture, tourism and petrochemicals – to bring about non-oil growth, jobs, and new sources of public revenues; and
(iv) A cross-cutting theme focused on macroeconomic management and improving the capacity and effectiveness of government institutions.
Last Updated: Apr 02, 2015