Is there finally hope for Timor Leste’s rural people?

Timor Leste’s Prime Minister, Xanana Gusmao, had originally planned to step down as Prime Minister in September or October 2014, but has now decided to stay on until at least April 2015. Since becoming Prime Minister in 2007, two of his major achievements have been bringing peace to the capital city, Dili, after the attempted assassination of Timor Leste’s President in 2008, and his ongoing struggle to get a fair deal for Timor Leste from its off-shore oil reserves. Through oil money, Timor Leste’s annual budget has increased steadily and its oil fund total now stands at 15.7 billion USD and rising.

However, what is the legacy of Xanana’s government, the 2002-2006 Fretilin government and the 1999-2002 UNTAET administration for the 75% of East Timorese who live in rural Timor Leste? Earlier this year, I travelled to rural Timor Leste to see just how life had changed for rural Timorese since Indonesian times.


It was my first visit to Viqueque since 1997. Viqueque was one of the heartlands of the Timorese resistance in the Indonesian period. I wondered what independence had delivered to the people there. I’d already passed through the towns of Manatuto and Baucau, seeing how little these had changed since my visits of the 1990s. At face value, outside Dili, East Timor’s independence had manifested itself in a better road between Dili and Viqueque, a single ATM machine in Baucau and a renovated church in Ossu.

When I was working for UNTAET back in 2002, I envisaged ‘small town’ Timor in 2014 being something like ‘small town’ Malaysia. Smooth roads, with trucks full of goods travelling between busy market centres, a few air-conditioned buses whizzing by, shops with neon lights open until late in the night, a few well kept public parks and community centres, and a degree of tidiness that showed people’s diligence. I envisaged well organised and active local governments, and signs of growing literacy.

From what I saw and heard, independence has so far delivered none of these things to the people living outside Dili.

To get a sense of economic, recreation and education opportunities in downtown Viqueque in 2014, see this photo, taken mid-afternoon in early 2014. The same photo can also provide insights into the level of vibrancy in local government and community activities.

Downtown Viqueque, looking north to the old Indonesian garuda monument, 2014And just in case you thought that was trick photography, here’s downtown Viqueque, looking the other direction.

Downtown Viqueque, looking south to the bridge, 2014


Certainly, there are a few small shops scattered around the outskirts of Viqueque, but you’ve now seen central Viqueque, the administrative centre of one of Timor Leste’s 13 districts.

I followed my trip to Viqueque with a trip to two other administrative centres: Gleno and Aileu. These are much closer to Dili and have through-traffic but had also not advanced economically since the 1990s. Here’s a photo of downtown Aileu, another administrative centre, in early 2014.

Downtown Aileu, 1.5 hours’ drive south of Dili


In small town Malaysia or even small town Indonesia, the number of vehicles, internet cafes, ATMs, and mini-marts has risen sharply in the past 12 years. So have education levels. Outside Dili, I saw just one ATM machine (in Baucau). Vehicles, book shops, book shelves and internet cafes were in short supply. Poverty-stricken West Timor, even in the rural areas east of Kupang, is more developed in these respects than post-independence rural Timor Leste.

Certainly East Timorese people feel freer than when they were under Indonesian rule. No military or police check points like in 1997. Locals now have no concerns about being invited down to the local police station because their name came up in the wrong discussion or in the wrong document. Locals now feel free to express political opinions.

But expressing political opinions in recent years has not yet helped rural people. The demographics of ‘small town’ Timor Leste have become unbalanced since independence. Parents accept that their children will head to Dili as soon as they are old enough, because there are so few employment or education opportunities outside Dili. Recreation facilities and organised clubs are also rare. The main recreation opportunities in Viqueque seem to be unchanged from 100 years ago: bathing in the river, cock fighting and just sitting around on verandahs. The Timorese with whom I travelled had grown up in Viqueque, and acknowledged that Viqueque was more vibrant in the 1990s.


If private enterprise can’t be induced to kick-start development outside Dili, surely Timor Leste’s government can. Timor Leste’s government has budgeted 1.5 billion USD for 2014 and 1.57 billion for 2015, equating to around USD 1,300 annually per person in the country. That’s far below the current Australian national budget, which at AUD 412.5 billion equates to about USD 15,000 (AUD 17,500) per person. However, it’s double the current Indonesian government spending per capita, which at Rp 1,876.9 trillion per year equates to about USD 650 per person.

Are rural East Timorese getting value for this 1,300 USD per person?

The answer seems to be ‘not yet’ but ‘maybe soon’. The government has restored the education, health and electricity services that were available in Indonesian times, but very little seems to have been spent on rejuvenating the economy. That may now be changing. Timor Leste’s Minister of State Agio Pereira recently reminded us of big plans for government-funded development along Timor Leste’s south coast, with “the construction of a supply base, refinery, and natural gas liquefaction plant, as well as a seaport and three regional airports, the first of which will be ready in 2016.” The extent of this infrastructure development will no doubt depend on whether the operators of the Greater Sunrise oil and gas field in the Timor Sea can be persuaded to build a pipeline to Timor Leste’s south coast. Pereira also forecast the development of 2,500 acres of hinterland for agriculture and agroforestry and issuing of permits for on-shore oil drilling.

New opportunities are also emerging for rural Timorese elsewhere around the country. I travelled the road from Dili to the West Timor border and found that, through an ADB grant, it had been greatly improved. In particular, the drainage catchments were deeper and the landslide prevention walls seemed stronger and more extensive than anything I saw in Indonesian or UNTAET times.

There are plans to develop the small jetty at Tibar, a few kilometres west of Dili, into a commercially viable container port. Then there’s the ambitious government investment in the Oe Cussi Special Zone of Social Market Economy, designed to create conditions attractive to tourists and foreign investors. A lot of the action is still just on paper, but finally some attention seems to be being paid to rural Timor Leste. Perhaps more attention than at any time since Portuguese colonisation.

If everything goes according to plan, economic activity outside Dili will finally start growing in the next few years. Such economic growth could have important flow-on effects. Dili is currently crowded with job-seekers from rural Timor Leste. Improved economic opportunities outside Dili could induce these job-seekers to return to their rural homes, thereby easing some mounting pressures in Dili, like high unemployment and rising land prices. If rural towns can grow, so too will rural markets, so farmers who were previously operating at almost subsistence level can be induced to produce excess for sale in nearby markets.

There’s no question about the availability of funding to bring Timor Leste’s rural economy to life. The question marks are about government capacity. Firstly, there’s corruption. Xanana has taken serious steps to address this, including establishing the Anti-Corruption Commission and slightly more effective structures for field monitoring of public works projects. Secondly, there’s the challenge posed by the Timorese civil service mentality of enjoying exercising authority over the public rather than serving them. Thirdly, there’s the tendency to promote civil servants based on factors like age and personal connections rather than performance. Fourthly, planning in detail, and following the plans methodically, is a relatively new skill in a country where most senior civil service positions were, until 2001, filled by non-Timorese. Finally, there’s the ever-present risk of internal division, which in recent Timorese history has often been exacerbated by unscrupulous characters.

Within Timorese society, there is the potential to overcome these challenges. During the period of Timorese resistance to Indonesian rule, Timorese demonstrated a capacity for discipline, planning under difficult circumstances, self-sacrifice, and solidarity. Today, a section of Timorese society is wealthier and more educated than in Indonesian times. The challenge is not just to build new capacity but to re-discover and re-direct past capacities.

It’s taken a while but now much of the planning is in place. Much of the required road network is in place. The money’s in place. Rural Timor Leste could soon have bustling roads and marketplaces, shops with neon lights, and plentiful opportunities for work, education and entertainment. If Timor Leste’s government can find sufficient discipline, eye for detail, service orientation and solidarity, it could just pull this off. Only then will rural Timorese taste the true benefits of independence.

Terry Russell previously worked for Concern Worldwide and UNTAET in Timor Leste.

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Terry Russell

Dr Terry Russell recently returned to Australia after 18 years living in developing countries. He now works as an international development practitioner with ABM in Sydney.


  • Terry you raise some very important points, but I cannot help but feel you have missed the main one. That is the enormous effort required to achieve political, social and economic stability in a diverse post conflict state. That vibrancy of small town Malaysia not evident in rural Timor-Leste is not at all surprising to me. The last 12 years have been an entirely different journey for these two nations. While much more needs to be done, I think more credit could be afforded the government for its efforts post 2006: Re-building everything from scratch, healing a traumatised population, maintaining peace and investing in human resources to build the capacity of the civil service. All of this takes money, time, conviction and support. As you point out the money is there (and again we should celebrate the accumulation of the oil funds which is nothing short of miraculous in a newly established political culture). From what I have witnessed* so too is the conviction of government. The analysis considers domestic capacity improvements as part of the machinery required to install the desired improvements and outcomes in rural life. I guess my point is that the political will to quarantine revenues from resource sectors is never a given. Even a couple of billion USD in sovereign wealth seems like a titanic effort by anyone’s standards but more particularly in a new nation. The measures for relative development progress employed here seem narrow. Concrete floors, greater rights and freedoms, less sick families, bums on desks in classrooms with truly qualified (and paid) teachers can’t possibly be captured in an image like this.

    Perhaps more time and support will overcome your disappointments, and more importantly see a greater transfer of benefits to the people of Timor-Leste. For an alternative journey down memory lane you may want to have a look at this multimedia essay. *FULL DISCLOSURE: The Pacific Institute of Public Policy (PiPP) is supporting the government of Timor-Leste on the Post 2015 Development Agenda. Dan McGarry, the author of the multimedia essay, also works at PiPP.

  • Really interesting insight into contemporary rural Timor Leste. I wonder how much development can come from businesses other than resource exploitation, though? What are your thoughts on this?

    • Hi Kate, I’ll offer some thoughts below re Timor Leste’s economy, though better informed people than me have probably already discussed these ideas and many others.

      One thought re Timor Leste’s economy is that it’s right next door to some pretty tough competition. Indonesia can produce almost anything more cheaply than Timor Leste and with a more pliant, better skilled workforce. Timor Leste may have to content itself with niche markets, where its competitive advantage is not regarding price but regarding its uniqueness.

      The obvious example is Timor Leste coffee, which can compete against Indonesian coffee because of its established reputation from Portuguese times, its use of overwhelmingly organic farming methods, certain countries’ sympathies with Timor Leste, etc.

      Perhaps other Timor Leste agricultural products could exploit similar themes to be marketed overseas.

      If Timor Leste’s sandalwood or teak industry ever recover, its reputation with these industries may help with marketing. If it can produce these while complying with international conservation standards, that’ll probably also give it a marketing edge over Indonesian wood.

      Tourism needs to emphasise the things that Indonesia hasn’t got: the Portuguese architectural and cultural heritage, various sites connected with the history of resistance to Indonesian rule, and (up until recently) less traffic.

      I’m sure there are other niche markets.

      Fishing has potential but policing Timorese waters could be expensive. In addition to Timorese fishing fleets, maybe Timor Leste could sell fishing rights to some larger companies from just one or two countries. The companies or even their governments could then assist with policing.

      Then there are dodgier schemes like a tax haven or money laundering facilities. Maybe that’s the only way the Oi Cussi special economic zone will ever be profitable.

      A final thought is that more of Timor Leste’s money needs to be spent domestically. Currently, middle class Timorese do their shopping sprees overseas and international advisers send large amounts to overseas bank accounts. It’s not inconceivable that a ‘playground for the rich’ could be set up on Atauro Island or the lake at Maubara. It might become a centre of vice but at least it would keep more money in-country.

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