This is the script for my video posted on May 22, 2026. Watch it on TikTok.
The country of Timor-Leste is Asia’s youngest state, having restored its independence in 2002 after 24 years of Indonesian occupation. But Timor-Leste is increasingly being courted by Indonesia, China, Australia, Japan, and the US despite occupying only half of a single island. So what makes Timor-Leste so interesting to the region’s far more powerful stakeholders?
Timor-Leste, also known as East Timor, occupies the eastern half of the southeast Asian island of Timor, plus a small exclave surrounded by Indonesian territory. The country sits along the Wetar and Ombai straits that provide deep-water passages between the Pacific and Indian oceans, and together this route is considered one of the most important international straits for US nuclear submarines to pass through because the channels are deep enough for them to pass undetected. This means that any country that wants to monitor or interdict this kind of traffic has a direct interest in Timor-Leste’s cooperation.
From about 1702 to the 1970s, the land we now call Timor-Leste was largely controlled by Portugal, who shared the island of Timor with the Dutch. This is why Portuguese is one of the country’s two official languages. The island was occupied by Japan during WWII, though when they left Portuguese control resumed and Portugal began to invest into the colony, funding local education and exports of resources like coffee, but the economy remained deeply underdeveloped, and when Portugal experienced a revolution in 1974, their administration in Timor-Leste fled, unable to regain control from the local factions who had seized power.
In 1975, the conservative Timorese Democratic Union, or UDT, launched a coup attempt. A rival party, Fretilin, proclaimed itself the sole legitimate representative of the East Timorese people, and it ultimately won a three-week civil war against the UDT. Fretilin began as a social democratic organization, but many were concerned that it was truly communist. Consequently, the US gave Indonesia an explicit green light to invade and use US-supplied equipment despite legal restrictions.
The Indonesian military was responsible for about 70% of violent killings in that period. The most notorious was a 1991 massacre at a peaceful memorial procession in Dili, where Indonesian troops opened fire on civilians and killed at least 250 people. Footage smuggled out by a British cameraman transformed international opinion of the occupation, and solidarity networks formed in the US, the UK, Australia, Portugal, and Japan. In 1996 the Nobel Peace Prize was awarded jointly to Bishop Carlos Ximenes Belo and Fretilin co-founder Jose Ramos-Horta for their work toward a peaceful resolution.
In 1998, Indonesian dictator Suharto fell from power and the new government then allowed an independence vote in Timor-Leste. With about 99% turnout, 78.5% voted for independence. Militias organized by Indonesia launched a scorched earth campaign in response, killing well over a thousand people. Hundreds of thousands fled to West Timor for safety, and about 80% of the territory’s infrastructure was destroyed. The UN Transitional Administration worked to establish peace and build a new state, and in 2002 the government of Timor-Leste came into being.
Fretilin and the UDT became legitimate political parties. Unfortunately, the mid-2000s saw a lot of continued unrest and fighting between factions that required additional UN intervention. In 2006, a crisis within the military forced Prime Minister Mari Alkatiri to resign and prompted Australia to lead a stabilization force back into the country. Jose Ramos-Horta, the Nobel Peace Prize winner I mentioned earlier, was elected president in 2007, but in 2008 an assassination attempt against him and his prime minister Xanana Gusmao. Eventually things stabilized, and the UN ended its peacekeeping mission in Timor-Leste in 2012.
Today, the country’s former revolutionaries run the country, primarily Fretilin and Gusmao’s social democratic coalition, the National Congress for Timorese Reconstruction, or CNRT. After a decade of others in office, Ramos-Horta was elected president again in 2022 and remains in office today, and he has led the country to join ASEAN in pursuit of greater economic ties. As of now, there is no major civil unrest in the country, and the East Timorese government is focused mainly on issues like youth unemployment, an outbreak of dengue, and a probe into corruption in police recruitment.
Timor-Leste has some interesting geopolitical relationships. Australia, for example, led the multinational peacekeeping force in the country in 1999 and has been Timor-Leste’s largest aid donor. But it was also caught planting listening devices in Timor-Leste’s national cabinet room. In 2016, Timor-Leste forced Australia into conciliation over a contested maritime boundary, because Timor-Leste has a majority interest in the Greater Sunrise offshore gas field, which contains about 5.1 trillion cubic feet of natural gas valued at upwards of 50-75b USD. Nonetheless, Australia remains Timor-Leste’s most significant defense partner.
In 2005, a bilateral truth commission was made between the governments of Indonesia and Timor-Leste, and its final report issued in 2008 found that Indonesia bears institutional responsibility for crimes against humanity in 1999. The Indonesian president fully endorsed it, and Timor-Leste has consistently opposed prosecutions, effectively deciding to move on from the past. Indonesia remains the country’s largest overall trade partner.
Meanwhile, China claims it was the first state to recognize Timor-Leste in 2002, and in 2023 the relationship was elevated to a Comprehensive Strategic Partnership. Timor-Leste has reaffirmed the One China principle, and the two countries agreed to expand their military exchanges, cooperation, training, exercises, and technology sharing, much to the US’s chagrin.
But Timor-Leste is facing some serious issues. Its economy relies far too heavily on oil revenues, but its previous oil and gas production ceased in 2025. If this continues, the roughly 18b USD sovereign wealth Petroleum Fund is expected to be fully depleted by the end of the 2030s. Coffee makes up 90% of the country’s non-oil export revenue. Timor-Leste also has a serious demographic crisis on its hand because the population’s median age is only 20 years old, fertility is very high, and unemployment is consequently a chronic issue. Large outflows of seasonal migrants go to places like Australia and New Zealand for work. If the country is going to keep its fragile peace, it will have to navigate all of these issues simultaneously amid pressure from competing powers with their own interests.
Keep reading
- Why has tiny Bhutan managed to stay independent between India and China?
- Why is Sri Lanka so important?
- Why is uber-wealthy Brunei at risk of crisis?
I’m writing a book called Groundwork about the buried history beneath geopolitics. Join the waitlist to hear when it has a publisher, a cover, and a release date.