/ Democratic Republic of Timor-Leste
Overview
Timor-Leste is a country located in Southeast Asia, occupying the eastern half of the island of Timor, the Oecusse (Ambeno) enclave on the northwest side of the island, and the islands of Atauro and Jaco. It is bordered by Indonesia to the west and the Timor Sea to the south, which separates it from Australia. Timor-Leste covers a land area of approximately 14,874 square kilometers and has an estimated population of 1.3 million as of February 2026. The country is a semi-presidential representative democratic republic administratively divided into 14 municipalities, including the capital city, Dili, which is the center of the nation's political and commercial activity.
In 2025, the non-oil GDP reached approximately US$1.85 billion, while the total GDP, including petroleum, fluctuated based on global energy prices; the per capita GDP (non-oil) was approximately US$1,335. Timor-Leste's economy is profoundly dominated by the public sector, which is funded by the Petroleum Fund, accounting for approximately 80% of state revenue. However, the service sector has grown to account for c.60% of non-oil GDP, driven by public administration, construction, and retail. The agricultural sector remains the primary source of livelihood for approximately 65% of the labor force, contributing c.18% to the non-oil GDP. Coffee is the country's most significant non-oil export, accounting for nearly 90% of agricultural exports. Top trading partners include Indonesia, China, Australia, and Singapore. The development of the Greater Sunrise gas field and the "Strategic Development Plan 2011–2030" are expected to be major future growth drivers. Additionally, the tourism sector is a priority for diversification, targeting niche eco-tourism and diving markets. Imports of refined petroleum, cereals (rice), and vehicles are among the highest in the country, with top import partners being Indonesia, China, and Vietnam.
Timor-Leste has a history shaped by centuries of Portuguese colonial rule beginning in the 16th century. It declared independence from Portugal on November 28, 1975, but was shortly thereafter invaded and occupied by Indonesia. Following a 24-year resistance struggle and a UN-sponsored referendum in 1999, the country regained its sovereignty and became the first new sovereign state of the 21st century on May 20, 2002. Since independence, Timor-Leste has focused on building democratic institutions and national reconciliation. In 2024 and 2025, the nation accelerated its efforts toward full ASEAN membership, having been granted observer status and a roadmap for accession, which remains a central pillar of its foreign and economic policy as of 2026.
