Economic Diversification in Timor-Leste

Oil dependency in Timor-Leste is a political and economic reality. As part of its economic development strategy, the government has taken a similar path to many other oil-dependent countries, taking a largely ‘top-down’ approach in which a significant portion of the annual budget (up to 22%) is allocated to large infrastructure such as major roads, bridges, and airports.

This approach does not address the economic development needs of nearly 70% of the Timorese population, who rely on subsistence farming for their livelihoods. Inclusive economic development that farmers can benefit from requires a different type of investment: smaller roads connecting farms to markets, basic agricultural technologies, access to water for irrigation, seeds, and other materials.

The purpose of this project was to assess government and civil society stakeholders’ attitudes towards economic development policy, the local driving factors for current policy approaches, and opportunities for improvement in the Timorese political, social and economic context.