Updated June 27, 2019
Timor-Leste: Background and U.S. Relations
Overview
projects, while opponents alleged that the government was
Timor-Leste (also known as East Timor), is one of the
spending unsustainably.
world’s youngest nation-states, having gained its
independence from Indonesia on May 20, 2002. This
U.S. congressional concerns have focused on internal
marked the end of more than three centuries of foreign rule,
security, human rights, and the development of democratic
including over 300 years of Portuguese rule followed by 24
institutions. The House Democracy Partnership initiated a
years of Indonesian control. The nation’s transition to
Timor-Leste program in 2006 that has managed training
independence was traumatic: Following a 1999 nationwide
programs for Timorese legislators, and assisted with the
referendum that supported independence, violence led by
building of a parliamentary library and the improvement of
paramilitary militias supported by elements of the
information technology in the Timorese parliament.
Indonesian military killed around 1,300 Timorese and
displaced nearly 500,000. Today, with a population of 1.3
Historical Background
million, Timor-Leste is one of the world’s poorest nations,
During the 1640s, Portugal began to assert control over
with one of Asia’s highest illiteracy rates.
Timor-Leste, a small outpost surrounded by Dutch-ruled
Indonesia. This colonial presence would last until 1975,
Timor-Leste has made considerable strides in building
long after Indonesia gained independence from the
stability and democratic institutions, although it continues
Netherlands, when the Revolutionary Front for an
to face many challenges in consolidating its democracy and
Independent Timor-Leste (Fretilin) gained ascendancy and
developing its economy. The nation’s 2012 presidential and
declared independence on November 28, 1975. Indonesia
parliamentary elections, conducted peacefully as a U.N.
invaded Timor-Leste on December 7, 1975, and began a
peacekeeping mission prepared to leave the country, were
period of occupation in which an estimated 100,000 to
widely seen as a turning point in Timor-Leste’s
250,000 Timorese were killed. The United Nations did not
development. Subsequent presidential and parliamentary
recognize the Indonesian action, and human rights
elections have seen high voter participation and have been
violations in Timor-Leste by the Indonesian military
considered by international observers to have been largely
became a longstanding thorn in U.S.-Indonesia relations.
free and fair.
The nation held elections in 2017, which resulted in an
ineffective minority government that served only eight
months, and then again in May 2018, when a broad
coalition known as the Alliance for Change and Progress
(AMP) took office. The current Prime Minister is Jose
Maria de Vasconcelos (also known at Taur Matan Ruak, or
“two sharp eyes” in the Tetum language), who led a guerilla
movement for independence from the 1970s until 2002. His
coalition is backed by Nobel Laureate Xanana Gusmao, a
former prime minister who was Timor’s most prominent
independence activist. AMP defeated the Fretilin party, led
by Mari Alkantiri, another prominent figure in Timor-
Leste’s independence struggle. Timor-Leste’s president is
largely ceremonial. Current President Fernando Guterres’s
five-year term runs through 2022, and parliamentary polls
must be held by 2023.
Despite these political developments, Timor-Leste’s
governing institutions remain weak, and its economy is
deeply dependent on energy resources in the Timor Sea. Oil

generates substantial revenues that are managed in a
Source: Graphic created by CRS. Data are from CIA World
Petroleum Fund from which the government can withdraw
Factbook and World Bank.
a limited amount of funds annually. The fund’s balance
stood at $16.8 billion as of December 2017. The issue of
Following the 1998 fall of Indonesia’s authoritarian
how deeply to tap the fund’s reserves for infrastructure
government, Timor-Leste held a national referendum to
development is a controversial question. Previous
choose either autonomy within Indonesia or independence.
governments have broadened the scope of fund investments
Seventy-eight percent of the nearly 99% of registered voters
to include large-scale infrastructure and human capital
who turned out opted for independence. This led to
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Timor-Leste: Background and U.S. Relations
widespread retaliation and destruction by militias backed by
Timor-Leste has broadly maintained good working relations
elements of the Indonesian military that were in favor of
with Indonesia. It is also seeking to join the Association of
integration with Indonesia. In addition to widespread
Southeast Asian Nations (ASEAN), as it is currently the
killings and displacements, militias destroyed or damaged
only nation in Southeast Asia that is not a member of the
much of Timor-Leste’s economic infrastructure, including
regional grouping. China has increased its assistance to
homes, public buildings, utilities, schools, and medical
Timor-Leste in recent years. Although its overall aid totals
facilities. To quell the violence and restore order, a U.N.-
are lower than those of many donor nations, China has
authorized peacekeeping mission, International Force
constructed the nation’s Parliament building, presidential
Timor-Leste (INTERFET), was established under
palace and foreign ministry headquarters. China also sold
Australian command and deployed on September 20, 1999.
Timor-Leste two naval patrol boats in 2010, and has
provided training to dozens of Timorese government
Relations with the United States
officials.
U.S. relations with Timor-Leste focus primarily on
fostering stability and economic development with a young
U.N. Role in Timor-Leste
nation that has major needs in many areas. U.S. assistance
Between 1999 and 2012, the United Nations provided a
seeks to “help Timor-Leste develop its democratic
range of assistance to Timor-Leste, including peacekeeping,
institutions, diversify its economy, and enhance security
supporting capacity-building efforts to strengthen the
capacity.”
security and justice sectors, ensuring the provision of
humanitarian and reconstruction aid, and addressing issues
Since Timor-Leste’s 2002 independence, the United States
faced by refugees who fled in 1999. Many were placed in
has provided $500 million in assistance to the young nation.
refugee camps in the Indonesian province of West Timor,
The Departments of State, Defense, and Justice, USAID,
though virtually all have subsequently settled in Indonesia
and Peace Corps all have presences in Timor-Leste, and in
or returned to Timor-Leste.
2017, the Millennium Challenge Corporation selected
Timor-Leste as a candidate for developing an MCC
The U.N.’s peacekeeping role ended in 2012 with the
compact.
completion of the U.N. Integrated Mission in Timor-Leste
(UNMIT), which had operated since a violent crisis erupted
The Trump Administration requested $17.4 million in
in 2006 amid infighting between two separate Timorese
assistance for Timor-Leste in FY2020, down from $18.2
police factions. The U.N. High Commissioner on Refugees
million in estimated assistance in FY2019 and $18.4
(UNHCR) also closed its office in 2012. However, the U.N.
million in actual aid in FY2018. U.S. programs include
remains active in Timor-Leste, focusing on economic
training for staff at the Ministries of Finance, Health,
development and strengthening governing institutions.
Tourism, and Agriculture, efforts to raise farmers’ incomes
and improve resilience to environmental shocks, raise
Development Challenges
nutrition standards, and deliver healthcare for women,
Timor-Leste is one of the world’s youngest nations, but its
newborns and young children. The United States offers
development progress has been limited. Some 41.8% of the
International Military Education and Training (IMET)
population lives below the poverty line. According to the
courses for Timorese defense forces ($400,000 requested in
U.N. Human Development Report 2018, Timor-Leste’s
FY2020).
median age is 17.4, with 74% of the population is under the
age of 35, making the country Asia’s youngest. Around
In July 2015, U.S. Marines conducted a joint exercise with
20% of Timorese youth between the ages of 15-24 are
members of Timor-Leste’s security forces. The exercise—
neither in school nor employed. Around 37.5% of those
known as Koa Moana 15.2—involved two platoons. The
under age five are underweight, the third highest level in
U.S. Navy also sent 150 sailors and engineers to Timor-
the world.
Leste, instructing Timorese troops on basic seamanship,
and working on community service projects.
Many international donors have sought to promote the
development of agriculture. Some 75% of Timor-Leste’s
External Relations
population lives in rural areas, and 41% of the labor force is
Timor-Leste continues to receive extensive political,
employed in agriculture. Along with rising food prices and
economic and security assistance from Australia, New
shortages of dietary staples, scarcity of arable land and the
Zealand, Portugal, and the United Nations. The relationship
impact of natural disasters have been cited as primary
with Australia is particularly important. Australia is the
reasons for deteriorating food security. Many development
largest international donor to Timor-Leste, and it played a
experts consider the country to be particularly vulnerable to
large role in providing stability in the new nation’s early
climate change, given its already low agricultural
years. Timor-Leste and Australia settled a longstanding
productivity and vulnerability to rising sea levels and
maritime boundary dispute in 2018, utilizing compulsory
extreme weather events such as hurricanes.
dispute resolution under the United Nations Convention on
the Law of the Sea (UNCLOS). The two nations still
Ben Dolven,
disagree over their joint development of hydrocarbon
resources in the Timor Sea. Timor-Leste hopes to construct
IF10320
an onshore Liquefied Natural Gas (LNG) processing plant,
while the Australian company Woodside Petroleum favors
LNG processing at existing facilities in northern Australia.
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Timor-Leste: Background and U.S. Relations


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https://crsreports.congress.gov | IF10320 · VERSION 2 · UPDATED

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