Skip to Main Navigation

Overview

Emerging from decades of conflict, Timor-Leste became the first new sovereign state of the 21st century in May 2002.

Faced with the task of rebuilding public infrastructure – including roads, ports and airports, water and sanitation systems, government facilities – and institutional frameworks, Timor-Leste has made significant progress in key areas since independence. Meanwhile, fragility remains a challenge as the country contends with the legacies of past conflict.

Today, with a population of over 1.3 million people, Timor-Leste is a peaceful, democratic nation. While poverty levels remain high, progress has been made in improving living standards. The proportion of Timorese living in poverty, measured by the national poverty line, declined from 50% in 2007 to an estimated 42% in 2014.

The government of Timor-Leste managed to contain the COVID-19 pandemic throughout 2020, however, a significant rise in cases in early 2021 has underscored the threat to public health that the pandemic poses. Headway is being made in the vaccination roll-out, with 40% of the country and 70% of Dili fully vaccinated (as of October 2021). However, with the country under an extended state of emergency, the impact on the economy has been significant, with a contraction of over 7% in 2020.

Investments in human capital are directly linked to Timor-Leste’s future growth, productivity, and competitiveness. In 2020, the Human Capital Index for Timor-Leste stood at 0.45, as compared to the East Asia and Pacific’s regional average of 0.59. A healthier and more skilled workforce is necessary to better meet future labor demands across the economy.

While Timor-Leste has succeeded in saving the proceeds of its natural resource endowment, key remaining challenges include how to increase the productivity and effectiveness of government spending, and how to ensure the environment is preserved as an important economic and social resource for future generations.

Encouraging private sector-led growth in the economy will be vital for job creation. In a young country with a fast-changing political and social landscape, there is also a need to focus on improving institutions that create the enabling environment for good policy-making, economic prosperity, and inclusion.

Last Updated: Oct 15, 2021

Image
PHOTO GALLERY
More Photos

In Depth

Additional Resources

Country Office Contacts

Dili
Palm Business & Trade Center
Dili, Timor-Leste
+670 332-4649
Washington, +1 202-473-4709
1818 H Street NW, Washington, DC 20433