On unlocking a new frontier for investment in South-east Asia
How do you assess Timor-Leste’s current economic trajectory, particularly following ASEAN accession?
JOSÉ RAMOS-HORTA: Timor-Leste is at an inflection point in its national development, moving from post-conflict recovery towards a new phase of institution-building and economic development. This trajectory has only been possible because of the foundational achievement of peace and reconciliation, both within the country and with Indonesia. That forward-looking approach – choosing to prioritise stability and cooperation over division – created the conditions for national recovery and long-term progress. Progress has been made over the past two decades. The country has expanded its infrastructure, improved nationwide electricity coverage and strengthened digital connectivity. Investments in education and health care have contributed to an increasingly skilled human capital base, with a growing number of graduates, professionals and skilled workers emerging both domestically and from international training programmes.
ASEAN membership represents a major strategic milestone in this journey. It integrates Timor-Leste into one of the world’s most dynamic regional economic blocs, providing access to a much larger market and a framework for deeper cooperation. Integration is not only institutional; it is economic and practical. The key challenge now is to translate that membership into tangible gains through trade facilitation, investment attraction, regulatory alignment and participation in regional value chains.
What are the main drivers of long-term economic diversification in Timor-Leste?
RAMOS-HORTA: Economic diversification is a long-term process that requires strong foundations. For Timor-Leste, those foundations have been peace, basic infrastructure and human development. Without these, diversification cannot be sustained. The Petroleum Fund has played a central role in financing national development. It has enabled the country to invest in infrastructure, education and social services while maintaining overall macroeconomic stability and avoiding excessive external debt.
Looking ahead, diversification efforts will focus on several key sectors. Agriculture remains a priority, but it continues to face structural constraints, particularly in logistics, transport costs, access to finance and commercial organisation. Addressing these bottlenecks is essential for increasing productivity and enabling small producers to access markets more effectively. Tourism represents a major opportunity, given Timor-Leste’s biodiversity and natural landscapes. With the right infrastructure and services, it can become a driver of inclusive growth and the development of small and medium-sized enterprises across rural and urban areas. Over the longer term, there is also potential in logistics, aviation-related services and niche industries, given the country’s strategic location within a fast-growing regional economy connecting major Asian and Pacific markets.
How important are international partnerships in supporting Timor-Leste’s development strategy?
RAMOS-HORTA: No country develops in isolation, and for a small emerging economy, international cooperation is essential. Timor-Leste maintains strong relations with ASEAN members, Australia, China, Japan, South Korea, the US and multilateral institutions. These partnerships support infrastructure development, capacity building, institutional strengthening and investment. Our approach is based on openness and balance. We view international relations not as a zero-sum endeavour, but as a network of complementary partnerships that contribute to national development priorities. The objective is to ensure that these partnerships translate into tangible outcomes, including infrastructure, skills development and economic opportunity. The country’s experience in post-conflict reconciliation is also important. It demonstrates that deeply divided societies can achieve lasting peace through dialogue, reconciliation and forward-looking nation-building.
What is your message to international investors regarding Timor-Leste’s future outlook and opportunities?
RAMOS-HORTA: Timor-Leste is a small country, but strategically located within a region of over 700m people in South-east Asia and more than 4bn across wider Asia. This strategic location means investment in Timor-Leste is not simply investment in a small domestic market, but an investment in broader regional opportunities. ASEAN membership further strengthens this by providing a structured framework for trade and investment. The country offers political stability, a young population and a reform-oriented development path. While natural resources are limited compared to some neighbours, long-term opportunity lies in its strategic location, improving infrastructure and gradual integration into regional systems. For investors, the key opportunity lies in timing. Timor-Leste is still in a formative phase, with expanding infrastructure, strengthening institutions and a policy environment that increasingly supports openness and competitiveness.
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