A development boom in Suai and Oecusse is being financed by revenue from offshore oil and gas reserves, but many Timorese remain in poor health, with 40% living below the poverty line. Timor-Leste's dusty dry seasons give way to wet seasons that cut entire villages off and see wide rivers pouring out into the coral reefs surrounding the country. The politicians in power since independence (2002) have maintained their grip on the country, despite regular allegations of corruption and nepotism.


Who controls the oil and gas resources in the waters between Timor-Leste and Australia has been a topic of debate since before Indonesian occupation in the 1970s. After independence, Australia signed several treaties with Timor-Leste, including one that shared the revenue from the oil and gas deposits evenly (US$40 billion from the Greater Sunrise field – which lies about 150km from Timor-Leste and 450km from Darwin – alone). However, Timor-Leste argued that the maritime border should be halfway between the two countries, which would put most of Greater Sunrise in its territory.

In January 2017 espionage allegations against the Australian government led Timor-Leste to tear up the 2006 agreement, and eight months later Timor-Leste’s chief negotiator, former president and resistance hero Xanana Gusmão signed what he called a 'historic' deal in the Permanent Court of Arbitration in Copenhagen, addressing the issues of the Greater Sunrise field. He returned to the cheers of thousands, but outside observers say Timor-Leste still may have been short-changed in the deal.

In the meantime, revenue from oil and gas is quickly being spent on large infrastructure projects in Suai and Oecusse. While money is being poured into projects like a US$120 million international airport in Oecusse (with a view to attracting international visitors for, among other things, medical tourism and casinos), commentators are concerned that Timor-Leste's oil and gas revenue may be completely depleted within a decade.


High in the hills outside Dili is one of Timor-Leste's few natural resources: coffee. Some 100,000 people work seasonally to produce arabica beans, noted for their chocolate and cardamom character. You can practically pick coffee cherries from the side of the road as you roam through coffee-producing areas like Alieu, Liquiçá and Gleno. Shade-grown and organic, Timorese coffee is prized by companies such as Starbucks, which has moved from suggesting Timorese coffee is good for blends, to suggesting it's a stand alone level. Still, Timor-Leste is currently only producing 0.2 percent of the global coffee supply, and prices for the cash crop fluctuate, making the industry a work-in-progress.

The Returning Rulers

Peaceful presidential and parliamentary elections were held in 2017 and saw Francisco 'Lu Olo' Guterres elected president, and former prime minister Mari Alkatiri elected to the position once again – a decade after his last stint (he was Timor-Leste's first prime minister from 2002–2006). Nobel-prize winner and former president and prime minister José Ramos-Horta took up a new post as Minister of State and Counsellor for National Security.

Alkatiri's Fretilin party led a minority government for the first time in Timor-Leste's history, after winning just 23 seats in the 65-seat parliament. Original plans to form a coalition with new youth party Khunto (which surprised many by winning five seats) failed, and Fretilin formed a coalition with the PD (Democratic Party), with which it had had a longstanding antagonistic relationship. The minority government failed to pass the budget, and adhering to the constitution, called fresh elections for March 2018. Many debate whether this minority government will be able to pass the next budget and last the five-year term.