About the CBI

September 2005
 Background Note: East Timor

Flag of East Timor is red, with a black isosceles triangle (based on the
hoist side) superimposed on a slightly longer yellow arrowhead that extends
to the center of the flag; there is a white star in the center of the black
triangle.

PROFILE

OFFICIAL NAME:
Democratic Republic of Timor-Leste

Geography
Area: 15,007 sq. km.
Cities: Capital--Dili, Baucau.
Terrain: Mountainous.
Climate: Tropical; hot, semi-arid; rainy and dry seasons.

People
Nationality: Noun--Timorese; adjective--Timorese.
Population (2004): 924,642.
Religion: Catholic 98%.
Languages: Portuguese, Tetum (official languages); English, Bahasa Indonesia
(working languages).
Education: Literacy--41%.
Health: Life expectancy--49.5 years. Mortality rate (under 5)--126 per 1,000
live births.

Government
Type: Parliamentary democracy.
Independence (from Portugal): November 28, 1975.
Restoration of independence: May 20, 2002. (See History section.)
Constitution: March 2002.
Branches: Executive--president (head of state), prime minister (head of
government), cabinet. Legislative--unicameral parliament. Judicial--Supreme
Court and supporting hierarchy. As the Supreme Court has not yet been formed,
the Court of Appeal functions, on an interim basis, as the Supreme Court.
Major political parties: Revolutionary Front of Independent East Timor
(FRETILIN), Democratic Party (PD), Social Democratic Party (PSD), Timorese
Social Democratic Association (ASDT).

Economy
GDP (2004 est.): $322 million.
GDP per capita (nominal): $430.
GDP composition by sector: Services 57%, agriculture 25%, industry 17%.
Industry: Types--coffee, oil and natural gas.
Trade: Exports--coffee, oil and natural gas. Major markets--Australia,
Europe, Japan, United States. Imports--basic manufactures, commodities. Major
sources--Australia, Europe, Indonesia, Japan, United States.

GEOGRAPHY AND PEOPLE
East Timor is located in southeastern Asia, on the southernmost edge of the
Indonesian archipelago, northwest of Australia. The country includes the
eastern half of Timor island as well as the Oecussi enclave in the northwest
portion of Indonesian West Timor, and the islands of Atauro and Jaco. The
mixed Malay and Pacific Islander culture of the Timorese people reflects the
geography of the country on the border of those two cultural areas.
Portuguese influence during the centuries of colonial rule resulted in a
substantial majority of the population identifying itself as Roman Catholic.
Some of those who consider themselves Catholic practice a mixed form of
religion that includes local animist customs. As a result of the colonial
education system and the 23-year Indonesian occupation, approximately 17% of
Timorese speak Portuguese and 63% speak Bahasa Indonesia. Tetum, the most
common of the local languages, is spoken by approximately 91% of the
population. Mambae, Kemak, and Fataluku are also widely spoken. This
linguistic diversity is enshrined in the country's constitution, which
designates Portuguese and Tetum as official languages and English and Bahasa
Indonesia as working languages.

HISTORY
Portuguese and Dutch traders made the first western contact with East Timor
in the early 16th century. Sandalwood and spice traders, as well as
missionaries, maintained sporadic contact with the island until 1642, when
the Portuguese moved into Timor in strength. The Portuguese and the Dutch,
based at the western end of the island in Kupang, battled for influence until
the present-day borders were agreed to by the colonial powers in 1906.
Imperial Japan occupied East Timor from 1942-45. Portugal resumed colonial
authority over East Timor in 1945 after the Japanese defeat in World War II.

Following a military coup in Lisbon in April 1974, Portugal began a rapid and
disorganized decolonization process in most of its overseas territories,
including East Timor. Political tensions--exacerbated by Indonesian
involvement--heated up, and on August 11, 1975, the Timorese Democratic Union
Party (UDT) launched a coup d'état in Dili. The putsch was followed by a
brief but bloody civil war in which the Revolutionary Front for an
Independent East Timor (FRETILIN) pushed UDT forces into Indonesian West
Timor. Shortly after the FRETILIN victory in late September, Indonesian
forces began incursions into East Timor. On October 16, five journalists from
Australia, Britain, and New Zealand were murdered in the East Timorese town
of Balibo shortly after they had filmed regular Indonesian army troops
invading East Timorese territory. On November 28, FRETILIN declared East
Timor an independent state, and Indonesia responded by launching a full-scale
military invasion on December 7. On December 22, 1975 the UN Security Council
called on Indonesia to withdraw its troops from East Timor.

Declaring a provisional government made up of Timorese allies on January 13,
1976, the Indonesian Government said it was acting to forestall civil strife
in East Timor and to prevent the consolidation of power by the FRETILIN
party. The Indonesians claimed that FRETILIN was communist in nature, while
the party's leadership described itself as social democratic. Coming on the
heels of the communist victories in Vietnam, Cambodia, and Laos, the
Indonesian claims were accepted by many in the West. Major powers also had
little incentive to confront Indonesia over a territory seen as peripheral to
their security interests. Nonetheless, the widespread popular support shown
for the guerilla resistance launched by the Timorese made clear that the
Indonesian occupation was not welcome. The Timorese were not permitted to
determine their own political fate via a free vote, and the Indonesian
occupation was never recognized by the United Nations. [INS::INS]

The Indonesian occupation of Timor was initially characterized by a program
of brutal military repression. Beginning in the late 1980s, however, the
occupation was increasingly characterized by programs to win the
"hearts-and-minds" of the Timorese through the use of economic development
assistance and job creation while maintaining a strict policy of political
repression, although serious human rights violations such as the 1991 Santa
Cruz massacre -- continued. Estimates of the number of Timorese who lost
their lives to violence and hunger during the Indonesian occupation range
from 100,000 to 250,000. On January 27, 1999, Indonesian President B.J.
Habibie announced his government's desire to hold a referendum in which the
people of East Timor would chose between autonomy within Indonesia and
independence. Under an agreement among the United Nations, Portugal, and
Indonesia, the referendum was held on August 30, 1999. When the results were
announced on September 4--78% voted for independence with a 98.6%
turnout--Timorese militias organized and supported by the Indonesian military
commenced a large-scale, scorched-earth campaign of retribution. While
pro-independence FALINTIL guerillas remained cantoned in UN-supervised camps,
the militia killed approximately 1,300 Timorese and forcibly pushed 300,000
people into West Timor as refugees. The majority of the country's
infrastructure, including homes, irrigation systems, water supply systems,
and schools, and nearly 100% of the country's electrical grid were destroyed.
On September 20, 1999 the Australian-led peacekeeping troops of the
International Force for East Timor (INTERFET) deployed to the country,
bringing the violence to an end.

GOVERNMENT AND POLITICAL CONDITIONS
East Timor became a fully independent republic on May 20, 2002, following
approximately 2-1/2 years under the authority of the UN Transitional
Administration in East Timor (UNTAET). The country has a parliamentary form
of government with its first parliament formed from the 88-member Constituent
Assembly chosen in free and fair, UN-supervised elections in August 2001. The
29-member Cabinet is dominated by the FRETILIN Party, which won the majority
of Assembly seats. Mari Alkatiri, FRETILIN's Secretary General, is Prime
Minister and Head of Government, and Xanana Gusmao--elected in free and fair
elections on April 14, 2002--is President and Head of State. UNTAET's mandate
ended with independence, but a successor organization, the UN Mission for the
Support of East Timor (UNMISET), was established to provide additional
support to the Government. In April 2005, the UN Security Council unanimously
passed a resolution establishing a small follow-on special political mission
in East Timor, the UN Office in East Timor (UNOTIL), to succeed UNMISET when
its mandate expired on May 20, 2005. UNOTIL will remain there until May 20,
2006.

Under the constitution ratified in March 2002, "laws and regulations in force
continue to be applicable to all matters except to the extent that they are
inconsistent with the Constitution;" and Indonesian and UNTAET laws and
regulations continue to be in effect. During the period from December 2004 to
September 2005, the government held local elections in all 13 districts. In
July 2005, the Prime Minister announced a restructuring of the Cabinet and
the first reshuffle since independence. East Timor witnessed its largest and
longest political demonstration in April and May 2005 when several thousand
protestors took part in a demonstration led by the Catholic Church that
lasted 20 days. The demonstration ended peacefully with the signing of an
agreement between the Catholic Church and the Prime Minister that resolved
several key issues of disagreement.

Principal Government Officials
Head of State (President)--Kay Rala Xanana Gusmao
Head of Government (Prime Minister)--Mari Alkatiri
Minister of Foreign Affairs--Jose Ramos-Horta
Ambassador to the United Nations and United States--Jose Luis Guterres

East Timor maintains an embassy at 4201 Connecticut Avenue, NW, Washington,
DC 20008 (telephone: 202-966-3202).

ECONOMY
As the poorest nation in Asia, East Timor must overcome formidable
challenges. Basic income, health, and literacy indicators are among the
lowest in Asia. Severe shortages of trained and competent personnel to staff
newly established executive, legislative, and judicial institutions hinder
progress. Rural areas, lacking in infrastructure and resources, remain
brutally poor, and the relatively few urban areas cannot provide adequate
jobs for the country's growing labor force. Many cities, including the
country's second largest, Baucau, do not have routine electrical service.
Rural families' access to electricity and clean water is very limited. While
anticipated revenues from offshore oil and gas reserves offer great hope for
the country, effective use of those resources will require a major
transformation of the country's current human and institutional
infrastructure. Meanwhile, as those substantial revenues come on line,
foreign assistance levels--now standing at among the highest worldwide on a
per capita basis--will likely taper off.

East Timor has made significant progress in a number of areas since
independence. It has become a full-fledged member of the international
community, joining the United Nations, the International Monetary Fund, the
World Bank, and the Asian Development Bank (ADB). It is surviving the massive
exodus of UN personnel, equipment and resources, and has effected a
relatively smooth transition to Timorese control of the government and its
administration. It produced a National Development Plan, and its Constituent
Assembly has transitioned into a National Parliament that has commenced
reviewing and passing legislation. In July 2005, Parliament universally
passed a law creating a petroleum fund to effectively manage and invest oil
revenues to ensure these funds are invested in the country's development
after exploitation of these resources ends. A nascent legal system has been
put into place and efforts are underway to put in place the institutions
required to protect human rights, rebuild the economy, create employment
opportunities, and reestablish essential public services.

FOREIGN RELATIONS
East Timor joined the United Nations on September 27, 2002. It is pursuing
observer status in the Association of Southeast Asian Nations (ASEAN) and
became a member of the ASEAN Regional Forum (ARF) in July 2005. East Timor's
foreign policy has placed a high priority on its relationships with
Indonesia; regional friends such as Malaysia and Singapore; and donors such
as Australia, the European Union, Japan, Portugal, and the United States.

U.S.-EAST TIMOR RELATIONS
East Timor maintains an embassy in Washington DC, as well as a Permanent
Mission in New York at the United Nations. The United States has a large
bilateral development assistance program, $22.5 million in 2004, and also
contributes funds as a major member of a number of multilateral agencies such
as the Asian Development Bank and World Bank. The U.S. Peace Corps has an
active program in East Timor.

Principal U.S. Officials
Ambassador--Grover Joseph Rees III
Deputy Chief of Mission--vacant (Seiji Shiratori arrives in October 2005)
Political/Economic/Commercial Affairs--Elizabeth Wharton

The U.S. Embassy in East Timor is located at Praia de Coquieros, Dili; tel:
670-332-4684, fax: 670-331-3206. The embassy's web site is under
construction.