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Timor-Leste: fragile journey to peace and prosperity

Image credit: United Nations Photo (Flickr: Creative Commons)

On 22-23 May 2017, the Timor-Leste hosted the landmark Global Conference on the United Nations (UN) 2030 Agenda in partnership with the informal High-Level Support Group for the Sustainable Development Goals (SDGs) and the g7+ Secretariat to pursue A Roadmap for SDGs in Fragile and Conflict-Affected States. With the inauguration of Timor-Leste’s new President Francisco ‘Lo Ulo’ Guterres, which coincided on the 20 May 2017, the past month has offered a snapshot of Timor-Leste’s journey away from being a fragile state. Despite these recent developments, however, there remains scepticism around whether Timor-Leste can effectively tackle the challenges that loom over the nation today and in the coming years—namely, harnessing its demographic youth bulge and diversifying the economy.

Only located roughly 500 kilometres away from Australia’s northern shores, Timor-Leste’s independence, achieved in 2002, arises from a history of Portuguese colonisation that lasted more than 500 years. Furthermore, Indonesia’s devastating invasion and occupation from 1975–1999 saw the death of an estimated 150,000 men, women and children—roughly equivalent to 20% of Timor-Leste’s pre-invasion population. As Asia’s youngest nation, Timor-Leste also has a disproportionately high youth population—known as “youth bulge”—a result of the seismic demographic shift caused by conflict since the mid-1970s.

In Timor-Leste, an estimated 60% of the 1.26 million population is aged 25 or under. This is also combined with a high fertility rate of 4.9 children per woman—the 15th highest fertility rate in the world. Additionally, this is compounded by an urbanisation rate of 3.75% per year, with many migrating from the rural countryside to cities such as Dili in search of improved economic opportunities and lifestyles. This urbanisation trend is significant as more than 60% of Timor-Leste’s population is employed within the agricultural industry. Among its South Pacific neighbours, however, that demographic and urbanisation composition is not unique.

Timor-Leste is also one of the hungriest countries in the world. Factors such as climate change devastate more than half of the country’s livelihoods, resulting in volatile conditions where generating employment and sustainable opportunities for the next generation of Timor-Leste’s leaders remains one of the biggest challenges to future prosperity and national security.

Timor-Leste has in fact already experienced emerging challenges brought about by its youth bulge through the manifestation of criminal youth and martial arts gangs in the early 2000s. The legacy of armed conflict, violence and displacement over several decades has seen a flourishing of youth and martial arts gangs, largely rooted in causes such as ethnic rivalries, and gangs serving as platforms for unity and identity. Naturally, this is exacerbated through high youth unemployment, lack of access to education and political instability, among many other pre-conditions.

Unsurprisingly, the demography of East Timorese in those gangs has been found to be mostly single males aged 18 to 24. However, evidence suggests females, university educated and allegedly high-ranking leaders employed in government and international NGOs would also be among those. Although the Timor-Leste government has banned martial arts, such as pencak silat, without effectively addressing root causes such as youth unemployment, the risks for these youths remain.

The key to generating sustainable opportunities for Timor-Leste’s next generation is undoubtedly linked to the diversification of its economy, in which oil revenues comprise over 90% of government revenue. At the current rate, it’s predicted that Timor-Leste could become bankrupt as early as 2027. In November 2016, Timor-Leste’s independent think-tank La’o Hamutuk advocated that, as Timor-Leste’s oil reserves are quickly drying up and the Petroleum Fund continues to wither away, the government remains ‘too optimistic’ and ‘Timor-Leste badly needs an economic and social development program which is based on facts, not fantasies’.

International NGOs, such as the United Nations, have fostered the innovative creation and diversification of sustainable opportunities in Timor-Leste, especially targeted towards its youth. Many also believe that the accession of Timor-Leste to the Association of Southeast Asian Nations (ASEAN) will open the gates to the thriving ASEAN Community valued at approximately US$1.5 trillion dollars. Furthermore, prospects such as growing coffee exports and the untapped tourism industry remain promising opportunities for the future generation of Timor-Leste.

Government expenditure and underdevelopment of the private sector has also raised serious doubts. For instance, the Oecusse Special Economic Zone has received almost US$500 million in public funds in the past three years, but with no significant private investment, and a lack of transparency and accountability. This is starkly contrasted to spending more than US$1.1 billion dollars on three of the government’s largest infrastructure projects between 2017 and 2021. It remains to be seen whether the government’s questionable expenditure on infrastructure projects can be more effectively utilised, and whether the undeveloped private sector can be supported and buttressed.

There are many challenges that face Timor-Leste, especially when dealing with its youth bulge and economic diversification. As the Timor-Leste government g7+ Secretariat convened in Dili last month to analyse the snapshot of the country’s dynamic transformation, Timor-Leste’s journey to peace and prosperity undoubtedly remains fraught, fragile and far-off.

Reginald Ramos is the Indo-Pacific Fellow at Young Australians in International Affairs.

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