Timor-Leste's strategic location between the Indian and Pacific Oceans positions it as a vital player in India’s Act East Policy
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The visit by President Droupadi Murmu in August 2024 is the first ever by an Indian dignitary to Dili, the capital of Timor-Leste. This visit underscores India's greater attention to the ASEAN region and its Act East Policy.
Timor is the 11th member of ASEAN, admitted in 2022 as an observer. It will become a member state when it completes the roadmap set for it. Last year, at the India-ASEAN Summit in September, attended by the Prime Minister of Timor-Leste, PM Modi announced the opening of an Embassy in Dili. The embassy is likely to open later this year. The presidential visit coupled with the opening of India's resident mission, will add impetus to increase engagement with this small country of under 1.4 million people, with whom India has fledgling development cooperation partnerships.
The presidential visit coupled with the opening of India's resident mission, will add impetus to increase engagement with this small country of under 1.4 million people, with whom India has fledgling development cooperation partnerships.
In the 1970s, Portugal withdrew from its overseas colonies, including Mozambique and Angola, resulting in civil wars in some. The Carnation Revolution of 1974 in Portugal, led to the Portuguese withdrawal from Timor and the left wing, Fretilin, won the battle in Dili. However, in July 1976, East Timor was annexed by Indonesia as its then 27th province.
In 1999, at the request of Indonesian President Habibie, an East Timor referendum was held by the UN Mission in East Timor where it was given the option of autonomy within Indonesia, dominion status, or independence. East Timor chose independence, but in the aftermath of the referendum, massive violence broke out. The UN Security Councilwas forced to introduce a multinational force to restore order and security in September 1999. East Timor was administered by the UN mission for the interim period between the referendum and its official independence on 20 May 2002. It was during this administration that Indian UN diplomats played a significant role in governance. Kamlesh Sharma and Atul Khare are well noted for their dedicated work for the settlement in Timor-Leste and its consequent development.
Timor-Leste is in the news because Sheik Hasina, prior to her resignation had made a reference to it as “A part of a Christian conspiracy of Western countries”, which she said impacted Bangladesh. Timor-Leste is a Christian-majority territory, unlike Indonesia, which has the largest Muslim population in the world, with whom it shares an island. Indonesia and Timor overcame the legacy of violence in their relationship, rendering it stable.
Timor-Leste is Asia's youngest nation and the poorest in Southeast Asia, with 42 percent of its people living in poverty. It ranks 140th on the Human Development Index, reflecting medium human development. Unemployment is high, with 20 percent of the population out of work. Timor-Leste faced economic stress between 2017-2022 due to political uncertainties, along with external shocks like COVID-19 and cyclone Seroja.
Timor-Leste is among the most petroleum-dependent countries, but the current government is seeking to diversify and promote growth in agriculture, fisheries, and tourism.
However, it has been on a recovery path and economic growth is expected to reach 3.4 percent in 2024. Its economic growth is forecast to accelerate to an average of 4.1 percent in 2024 and 2025 as easing inflation pressures and a stable fiscal outlook contribute to growth.
Timor-Leste’s oil and gas industry accounts for approximately 70 percent of GDP and 90 percent of total exports. A Petroleum Fund accumulates surplus revenues from the oil and gas sector. This is to smooth the spending of temporarily high petroleum income and shield against the volatility of petroleum inflows and safeguard the sustainable use of public finances. It is among the most petroleum-dependent countries, but the current government is seeking to diversify and promote growth in agriculture, fisheries, and tourism.
Timor-Leste's strategic location between the Indian and Pacific Oceans positions it as a potential logistics hub, offering a convenient transhipment point for cargo vessels, and serving as a maritime gateway to both the Australian and ASEAN markets. The new Tibar Bay port is Timor-Leste's first PPP, which boosts trade potential, investment, and employment.
Yet it attracts barely US$262 million in FDI in 2022. The Greater Sunrise conventional gas development located in deepwater in the Timor Sea Joint Petroleum Development Area will go onstream in 2030 and boost Timor-Leste’s gas productivity and economy.
India has dealt with Timor-Leste based on its request for development cooperation, although the pace of implementation remains slow.
East Timor is seeking multiple partners and investors in the Greater Sunrise Project, and in November 2019, Xanana Gusmao, Chief Negotiator of Maritime Boundaries and Special Representative of Timor-Leste, led a delegation to New Delhi and had discussions with Shri Dharmendra Pradhan, Minister of Petroleum and Natural Resources, seeking investments in oil and gas sector of Timor-Leste. In December 2019, a delegation from OVL, OIL and EIL, visited Timor-Leste to discuss opportunities in the upstream sector of the Greater Sunrise Project and integration with the setting up of an LNG plant.
India has dealt with Timor-Leste based on its request for development cooperation, although the pace of implementation remains slow. It was in 2013 that more intensive visits from the mission in Indonesia started and a greater coherence of developmental work with different ministries, particularly those dealing with health and petroleum, was developed. There is a growing Indian population of professionals working as consultants through international organisations, on projects with the Timorese government. As projects emerged, Indian diaspora companies obtained contracts, bringing in more Indian professionals. In 2014, the first-ever business delegation from India was organised by the Indian Embassy in Jakarta through the India Business Forum. Despite these efforts, Indian business interest remains low.
Since 2013, India instituted a meeting between the External Affairs Minister and the Timor-Leste Foreign Minister, to develop a cooperation partnership. A grant of US$1,00,000 was announced at such a meeting and was ultimately utilised in purchasing a high-grade ambulance. An IT centre was offered to Timor-Leste in 2014 and again in 2018 but it failed to materialise. A UNIDO-led establishment of the Bamboo Skills Development and Demonstration Centre in Timor-Leste was completed in 2012 by the Cane and Bamboo Technology Centre (CBTC) in Assam. For further development cooperation, India utilised its trilateral partnerships to implement projects in Timor-Leste. First was through the UN Development Partnership Fund, and the other through the IBSA fund.
A project “Leveraging ICT to improve Education and Skills in Timor Leste” was launched as a pilot in April 2019 in Oé cusse Enclave of Timor-Leste. It trained over 5,000 Timorese children in 12 schools through the India-UN Development Partnership Fund.
Timor-Leste can leverage the free trade agreements ASEAN has with countries such as India, China, and Japan.
Under the IBSA fund a project, “Conservation Agriculture, Permaculture and Sustainable Fisheries Management: Enhancing Food and Nutrition Security and Reducing Risk Disaster in TL’ initiated for US$ 1.4 million. The project was developed by Food and Agriculture Organisation (FAO) in Timor-Leste along with two NGOs—“naTerra’ and “Conservation International” in the remote part of the Aautro Island. As a part of the project, a learning centre was provided at Atekru, on Aaturo Island. The centre provides training for sustainable agriculture and natural resources conservation and development, enhancing productivity in the agricultural and fisheries sectors.
By joining ASEAN, Timor-Leste will get to access its dynamic market and will gain the capital needed for national development programmes. Timor-Leste can leverage the free trade agreements ASEAN has with countries such as India, China, and Japan.
This small country presents a huge opportunity in the gas sector. However, bigger players dominate it and India’s traditional development cooperation with the FDI approach has not worked there. It is best that India sees it through an ASEAN prism and use the India-ASEAN fund to develop cooperative ventures as undertaken in the CLMV countries—Cambodia, Lao People's Democratic Republic (PDR), Myanmar, and Vietnam. India has supported the Initiative for ASEAN Integration & Narrowing Development Gap (IAI NDG), meant to bring CLMV countries to a higher level. IAI Work Plan IV (2021-2025) laid down the measures and actions through which the partners could assist the CLMV countries. India should look at how the objective of the IAI NDG could be met for Timor-Leste. Deeper trilateral cooperation with the United States (US), Australia and Japan could be used to boost it. There is a real opportunity for a Quad development cooperation with a focus on Timor-Leste.
Gurjit Singh has served as India's ambassador to Germany, Indonesia, Ethiopia, ASEAN and the African Union.
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Gurjit Singh has served as Indias ambassador to Germany Indonesia Ethiopia ASEAN and the African Union. He is the Chair of CII Task Force on ...
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