Timor-Leste is situated on the eastern half of the island of Timor (with an enclave in West Timor), north of Australia and part of the island archipelago that stretches from Malaysia through Indonesia to Papua New Guinea. The country is 15 007 km² in size and the population is just over 1 million. Tetum and Portuguese have been chosen as the country’s official languages.
Following a UN supervised referendum in 1999 Timor-Leste fully restored its independence on May 20, 2002. The country has a parliamentary form of Government. Since independence the country had made some remarkable steps in nation building and political stability, however, security institutions are still very fragile.
The economy is agriculture-based with over two-thirds of the population living in rural areas and one-third engaged in subsistence farming. Timor-Leste used to be famous for its sandalwood exports, but the economy was shattered by the Indonesian occupation. Coffee is also a small but lucrative export crop. However, economic recovery has been slow and mired in continued political instability.
Timor-Leste has substantial petroleum and gas reserves. In 2006 the country signed an agreement with Australia on the sharing of natural resources, allocating 50% of the revenues to Timor-Leste. One of the major challenges will be the use of the petroleum revenues in a sustainable way for the development of the country.
In addition, the country faces various development challenges: widespread and structural poverty, low life expectancy, low adult literacy rates, and a lack of sanitation and potable water. In terms of identity and nation-building, Timor-Leste will need to address its turbulent past and human rights’ violations of past administrations and to work for constructive relations with its neighbours.
Timor-Leste is a relatively new member of the group of African, Caribbean and Pacific countries but has long enjoyed a special relationship with Portugal due to their shared history. The EU as a whole, including Member States, has contributed half of total assistance to Timor-Leste since 1999.
Key objectives of the EU-Timor-Leste strategy are the support for further international engagement, lasting long enough to ensure durable state formation, support to institution building as the key for an economically independent and self sustainable Timor-Leste and ensure support for the integration of Timor-Leste in its neighbouring region.
EU cooperation with the country has focused on stabilisation and dialogue, fighting poverty, and humanitarian support. As such, within the Country Strategy of the 10th EDF (2008-2013) rural development is being boosted to achieve sustained poverty reduction and food security. Support is being given to the health sector and capacity building. This is improving the country’s management systems to support growth and take advantage of the improved terms of trade. The goal is to assist Timor-Leste in building sustainable national capacity to manage and execute the budget and EDF resources, develop a sound trade policy and organise elections.
In addition, humanitarian assistance is being provided, including for emergency relief and rehabilitation and food security.