East Timor Joins ASEAN Amidst Economic Challenges
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Just over two decades after gaining independence, East Timor has officially joined the Association of Southeast Asian Nations (ASEAN), becoming the blocS 11th member and its first new entrant since the 1990s.
Asia’s youngest and Southeast Asia’s poorest nation gained freedom from Indonesia in 2002.
A nation Once Rich in Oil and Gas
When Timor-Leste became autonomous in 2002,it gained control over huge oil and gas fields in the sea between Timor and Australia,called Bayu-Undan and Greater Sunrise. By the mid-2000s, almost all the government’s revenue, about 95%, came from oil and gas.
In 2005, the government created a Petroleum Fund to manage this wealth.Tho, as 2008, the government has been spending more than what’s considered safe to withdraw from this fund. This wealth didn’t last, and economists now describe Timor-Leste as a victim of the ‘resource curse.’
The Bayu-Undan field was one of East Timor’s biggest oil and gas sources.It produced meaningful revenue for the country for nearly two decades before running dry in 2023, leading to the project’s shutdown.
East Timor’s Entrance to ASEAN
Also known as Timor-Leste, the country applied for ASEAN membership in 2011 but waited more than a decade for approval. Several member states,particularly Singapore and Thailand, expressed concerns that the country wasn’t economically strong enough to meet ASEAN’s standards.
East Timor faced challenges with weak infrastructure, limited administrative capacity – struggling to send diplomats to ASEAN meetings – and a poor economy. Some nations also worried that adding East Timor would hinder the bloc’s progress.
Over the years, the country improved its infrastructure and strengthened its governance and economy with assistance from neighboring Indonesia. In 2022, it was granted observer status, and in 2025, it was formally admitted into the bloc.
What Experts Predicted in 2001
A year before its independence, experts predicted potential long-term poverty for the nation.
“One of the main challenges for East Timor is that the money is well spent,” said Sarah Cliffe, chief of the World Bank’s mission in East Timor, at the time. “There are many, many examples around the world of countries which have received oil windfalls, but have squandered the benefits.”
These concerns have unfortunately materialized.
What Next?
With its oil and gas reserves dwindling, the government is now focused on developing the Greater Sunrise liquefied natural gas field.A report in East Asia Forum estimates the field holds gas worth over $33 billion,but development has been stalled since 2024.
The Timor-Leste government believes onshore processing will boost the country’s industrial infrastructure and diversify its economy, currently heavily reliant on oil and gas revenues.
However, the report also highlights a limited skilled workforce, inadequate infrastructure, and a stagnant economy. Whether the Greater Sunrise field can become the foundation for the government’s vision of an industrialized state remains to be seen.
Publication Date: 2025/10/27 09:09:40