Timor-Leste

Current National Issue of Timor-Leste (2025–2026)

Economic diversification and ASEAN integration, especially as the country transitions away from oil dependence

Oil & Gas Production End Date

Oil and gas production ended in 2025, including production from the Bayu-Undan field

Causes of Timor-Leste’s Current Economic Issue

Declining petroleum revenues, limited private-sector development, and business barriers

Impacts of the Current Economic Issue

4.0% projected GDP growth in 2026; Petroleum Fund faces long-term pressure; need for jobs and private investment

Government Response to Economic Diversification

Support MSMEs and exports; improve infrastructure and digital trade; attract quality investment

Why ASEAN?

Access to regional trade and investment; greater integration into ASEAN value chains

Timor-Leste’s Form of Government

Semi-presidential republic

President of Timor-Leste

Head of State, elected directly by the people for a 5-year term; also serves as Supreme Commander of the Defence Force

Prime Minister of Timor-Leste

Head of Government and leads the executive branch

National Parliament of Timor-Leste

Unicameral National Parliament; members are elected by the people for 5-year terms

How Timor-Leste’s Leaders Are Chosen

After parliamentary elections, the President appoints the Prime Minister based on the party or coalition with a parliamentary majority

Council of Ministers

Led by the Prime Minister; develops and implements government policies and proposes legislation

Political Strengths of Timor-Leste

Competitive elections and peaceful transfers of political power since independence in 2002; strong public participation; democratic institutions developed despite being a relatively young state.

Political Challenges of Timor-Leste

Fragile democratic institutions, especially judicial independence and government capacity; CNRT–FRETILIN disagreements; slow consensus-based decision-making; need to strengthen rule of law and institutional capacity.

ASEAN Membership Date

Timor-Leste became ASEAN’s 11th member on October 26, 2025

ASEAN Political-Security Community Participation

Timor-Leste participates alongside other ASEAN members; in 2026 it worked with ASEAN on transnational crime, immigration, border management, and counterterrorism cooperation

ASEAN Legal Instruments Acceded To

ASEAN Convention on Counter Terrorism (ACCT) and ASEAN Convention Against Trafficking in Persons (ACTIP)

Economic Role of Agriculture

Important source of employment and income; coffee is one of Timor-Leste’s main export products; other products include coconut, food crops, and livestock

Bayu-Undan Field

Oil and gas production from this field ended in 2025, creating a need for Timor-Leste to diversify its economy

Economic Challenges and Opportunities

Petroleum Fund provides financial resources; coffee and agriculture offer export opportunities; tourism and private-sector development have potential; ASEAN membership can support trade, investment, and regional economic cooperation

ASEAN Economic Opportunities

Membership can connect Timor-Leste to regional markets and supply chains; create opportunities for foreign investment, exports, businesses, and skills development; and support transition away from petroleum dependence

2002 Independence

Sustained democratic stability and peaceful transitions

National Poverty Rate

42% living below the national poverty line

Human Capital Challenge

Invest heavily in youth education and healthcare

2024 WTO Accession

Formal integration into global trade markets

Youth Unemployment Challenge

Struggling formal sector stifles workplace opportunities

Economic Diversification Priority

Shift focus to agriculture and tourism sectors

ASEAN Roadmap

Active preparation for 11th member status

Fiscal Cliff

80% of budget relies on depleting oil reserves

Regional Integration Benefit

Unlock regional trade and foreign direct investment