Abstract
Timor-Leste is a new, small, and poor “petrostate” with a national budget that relies heavily on revenue from offshore fossil extraction. The country’s 20-year history of independence has been shaped by its management of economic resources, particularly fossil fuels, as well as its legacy of independence struggle and international standing as a successful intervention by the international community, especially the United Nations. Although its democratic credentials have been firmly established through fair, transparent, and regular elections, recent elections (most recently in May 2023) have continued to elect leaders from the “75 generation” (those who fought against Indonesian occupation), which risks the political leadership becoming sclerotic and undermines the aspirations of the growing youth population. Additionally, the shifting geopolitical landscape as a result of the intensifying US-China rivalry in the region is likely to pressure Timor-Leste to take a stand, even if its likely accession to ASEAN membership may shield it from such pressure. The chapter explores three major endowments including socio-economic factors, oil and gas curses and the historical legacy of resistance in Timor-Leste which are key sources contributing to sustainable development prospects of the country amidst major powers rivalry in the region.
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Notes
- 1.
Rebecca Strating of La Trobe University, Australia, testified to Australia Parliament’s Proof Committee Hansard, Canberra on 14 March 2017 saying, “(W)e see this in a number of fragile resource-wealthy post-conflict states: the resource curse… To go back to that idea of being the architect of their own demise, it is very possible to that they could be … But since 2012 it seems to me that this pursuit of independence may actually create a failed state in Timor-Leste.”
- 2.
The Portuguese governor first established the rule in 1702, and the administrative rule lasted until 1975 when Indonesia invaded the colony. The Indonesian rule lasted until 1999. The United Nations transitional authority was established in October 1999, which lasted until the independence in May 2002.
- 3.
The Timorese cabinet approved a draft decree to decommission activities in the Bayu Undan oil and gas field on March 22, 2023. https://en.tatoli.tl/2023/03/23/govt-approves-draft-decree-law-on-decommissioning-activities-in-bayu-undan-field/09/.
- 4.
It is reported in news that the Bayu Undan field will change into a carbon capture and storage facility by Australian company Santos, which bought the facility from US-based ConocoPhilips in 2020. Australia’s Barossa field, another offshore natural gas field, side-produces large amount of CO2 (2.3 million tons per year), and this CO2 is scheduled to be piped from the Barossa field to Darwin and then Darwin to the Bayu Undan field for storage. By giving CO2 to Timor-Leste, Australia can claim Barossa as carbon-friendly gas field, and Timor-Leste gains by selling carbon credits to Australia. However, the dollar amount Timor-Leste will earn from this venture is not yet known. See Amanda Battersby, “World’s largest CCS project sat for sanction in 2023.” Upstream online (June 15, 2022).
- 5.
The Australian bank is ANZ Bank established in 2001, the Indonesian PT Bank Mandiri in 2003 and PT Bank Rakyat Indonesia in 2017, and Portuguese Macao Banco Nacional Ultramarino Timor in 2000. The Timorese government owned commercial bank Banco Nacional de Comercio de Timor-Leste was established in 2011.
- 6.
The UN’s 4th Committee which voted on a General Assembly resolution draft penned by Algeria, which condemned the invasion. 69 countries were in favor, 11 against (Benin, India, Indonesia, Iran, Japan, Malaysia, Mauritania, Morocco, Philippines, Saudi Arabia and Thailand), and 38 abstained (many in the Western countries including the United States).
- 7.
United Nations Security Council Resolution 384 (1975) on December 22, which was agreed upon by all 15 members including the permanent five and Japan, deplored Indonesian military intervention but stop short of condemning the invasion, and called on Indonesia to withdraw “all its forces” from Timor-Leste. UN General Assembly Resolution 3485 also deplored the intervention with 72 votes in agreement to 10, with 43 abstentions.
- 8.
See Australian Broadcasting Corporation. “Independence hero Xanana Gusmao’s party wins Timor-Leste election but falls short of majority.”
- 9.
The youth (between 15 and 23 years old) unemployment rate has been increasing since 2010 from 9.1% to 13.3% in 2022. See FRED at https://fred.stlouisfed.org/series/SLUEM1524ZSTLS.
- 10.
The first parliamentary election was held in 2001, followed by 2007, 2012, 2017, and 2018. The sixth parliamentary election took place on 21 May 2023.
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Acknowledgements
The author is grateful for edits and helpful comments by Chi Zhang and Binh Trinh on my earlier draft. I also thank the graduate students at Akita International University for valuable comments during my presentation on this topic in May 2023.
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Kohno, T. (2023). How a New, Small and Poor Country Withstands Global Challenges: Timor-Leste’s Three Endowments. In: Zhang, C., Trinh, B.T.A. (eds) Governance in Transitional Societies in East and Southeast Asia. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-99-5306-6_7
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