The Top Industries Of Timor-Leste Shaping Its Future

From the promising potential of tourism to the strategic significance of the petroleum sector, these industries play a crucial role in shaping the nation’s trajectory. This article takes an in-depth look at the top industries of Timor-Leste

The top industries of Timor-Leste merge from a complex history, they strive for economic development while cherishing its unique cultural heritage. Timor-Leste is forging ahead with its economic development, driven by a diverse array of industries. From the promising potential of tourism to the strategic significance of the petroleum sector, these industries play a crucial role in shaping the nation’s trajectory. This article takes an in-depth look at the top industries of Timor-Leste

Top Industries Of Timor-Leste

Agriculture

The agriculture sector is a significant source of employment in East Timor, engaging 80% of the active population. In 2009, around 67,000 households, many of them impoverished, cultivated coffee, with gross margins per hectare standing at approximately $120 and returns per labour day at about $3.70. Subsistence farming was prevalent among 11,000 households growing mung beans. Coastal fisheries contribute 94% of domestic fish catch, supporting 66% of families. Despite this, the country relies on imports as it doesn’t produce enough food for self-sustainability. Key crops include coffee, rice, maize, coconuts, cassava, soybeans, bananas, mango, and sweet potatoes. Coffee is the second-largest export after petroleum, generating around $10 million annually. In 2012, East Timor ranked 40th in coffee production, 6th in cinnamon, and 50th in cocoa globally.

Energy

East Timor consumes 125 gigawatt-hours (GWh) of electricity annually, averaging 95 kilowatt-hours (kWh) per person. The country has an electricity capacity of approximately 270 megawatts (MW), with 119 MW located in the city of Hera.
The majority of the energy infrastructure was destroyed during the 1999 East Timorese crisis by Indonesian militias. In 2005, the government recognized the high electricity cost (US$0.20 per kWh) as a hindrance to development. The Gariuai Hydroelectric Plant, with a production capacity of 326 kW, stands as the country’s sole hydro plant. Many residents rely on diesel generators. A feasibility study conducted from 2007 to 2010 highlighted East Timor’s substantial potential for renewable energy sources.

Oil and Gas Industry

During the era of the Portuguese colonial administration, the Oceanic Exploration Corporation secured concessions to develop petroleum and natural gas reserves southeast of Timor for Australia-bound projects. However, the Indonesian invasion in 1976 disrupted these plans. Subsequently, the Timor Gap Treaty in 1989 delineated resource-sharing between Indonesia and Australia, leaving East Timor without defined maritime boundaries upon gaining independence. The Timor Sea Treaty, established in 2002, created a Joint Petroleum Development Area (JPDA), allocating 90% of revenues from existing projects to East Timor and 10% to Australia. In 2005, an agreement resolved maritime boundary disputes, designating 50% of revenues from the Greater Sunrise development (estimated at A$26 billion or about US$20 billion) to East Timor. In 2013, East Timor contested a gas treaty with Australia at the Permanent Court of Arbitration, accusing the Australian Secret Intelligence Service of bugging the East Timorese cabinet room in 2004.
At independence, East Timor possessed per capita natural wealth equivalent to that of an upper-middle-income country, with over half attributed to oil and over a quarter to natural gas. The Timor-Leste Petroleum Fund, established in 2005, aimed to transform these non-renewable resources into sustainable wealth. By 2009, the fund’s value reached US$4.8 billion, increasing to US$8.7 billion by 2011.

Tourism

Timor-Leste’s breathtaking natural landscapes, rich cultural heritage, and historical landmarks position it as an emerging tourist destination. The country offers vast potential for cultural, nature-based ecotourism, and adventure tourism, featuring attractions like Dili’s iconic Cristo Rei, Atauro Island’s world-class coral reefs, and scattered Portuguese fortresses and churches. The government’s tourism policy, “Growing Tourism to 2030 – Creating a sense of national identity,” emphasizes sustainable development, aiming to attract 200,000 tourists annually by 2030. Australia, Indonesia, and Portugal currently form the primary sources of tourism, with an average stay of 3 nights and an expenditure of US $250. Timor-Leste is also increasingly appealing as a cruise ship stopover, with 67,000 and 111,000 passengers visiting in 2017 and 2018, respectively. Notable cruise ships, such as Seabourn Sojourn and Holland Maassan, have visited or are planning to visit Timor-Leste.

Transport

In East Timor, limited transportation options result from factors such as the country’s economic challenges, deficient transportation infrastructure, and limited communication networks. The absence of railways is notable, and the overall state of roads is insufficient. Outside urban areas, telephone and internet services are constrained. East Timor has six airports, with only one supporting commercial and international flights.