Timor-Leste is the youngest nation in Southeast Asia and the poorest country in the region. It has overcome tremendous challenges since independence but struggles with serious economic development problems. The focus of this paper series is economic diversification, which is one of the dominant policy issues in Timor-Leste, more than 20 years after independence from Indonesia. Given the multiple and delicate challenges that the country is facing, it is viewed as an alternative path toward sustainable and inclusive economic development, reducing dependence on petroleum and seeking new economic opportunities.
Current politics in Timor centers on personalities, history, and using ‘oil money’ as the solution to problems – it cannot cope with the rapidly changing the world and its domestic development challenges. Changing its way of doing politics and the way society is being governed is imperative to address structural issues in Timor’s development and maintain the relevancy and legitimacy of democratic institutions.