BACKGROUND The Island of Timor is currently divided in two parts

The Island of Timor is currently divided in two parts: the West is part of the Republic of Indonesia with provincial capital in Kupang; while the East, whose capital is Dili since its independence, had been a Portuguese territory since the 16th century. When the first traders and missionaries reached the coast of Timor in 1515, the island was organized in small states, ruled by two kingdoms, Sorbian and Belos, who practiced animism. Islam, a religion that is still prevalent in Indonesia, has never reached Timor. Even Buddhism, extensively practiced in Java, especially in the 13th century, did not prevail.

During the third quarter of the 16th century, the first Portuguese Dominican priests arrived in Timor and started developing a progressive religious influence, even as the Portuguese domination was still being settled. Culture developed in an opposite direction to that of today’s Indonesian islands of Java and Sumatra and of the coasts of Kalimantan and Sulawesi, where Islam was the dominant religion.

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In 1651, the Dutch invaded Kupang in the Western end of the Island of Timor, and took control of half of its territory. In 1859, the Dutch concluded a treaty with Portugal to determine the border between the Portuguese Timor (present-day Timor-Leste) and the Dutch Timor (Western Timor). Upon Indonesian independence in 1945, Western Timor was integrated into its territory.

Since independence in 1999, Timor-Leste has faced great challenges in rebuilding its infrastructure, strengthening the civil administration, and generating jobs for young people entering the work force. The development of offshore oil and gas resources has greatly supplemented government revenues. This technology-intensive industry, however, has done little to create jobs in part because there are no production facilities in Timor-Leste. Gas is currently piped to Australia for processing, but Timor-Leste has expressed interest in developing a domestic processing capability.
In June 2005, the National Parliament unanimously approved the creation of the Timor-Leste Petroleum Fund to serve as a repository for all petroleum revenues and to preserve the value of Timor-Leste’s petroleum wealth for future generations. The Fund held assets of $16 billion, as of mid-2016. Oil accounts for over 90% of government revenues, and the drop in the price of oil in 2014-16 has led to concerns about the long-term sustainability of government spending. Timor-Leste compensated for the decline in price by exporting more oil. The Ministry of Finance maintains that the Petroleum Fund is sufficient to sustain government operations for the foreseeable future.
Annual government budget expenditures increased markedly between 2009 and 2012 but dropped significantly through 2016. Historically, the government failed to spend as much as its budget allowed. The government has focused significant resources on basic infrastructure, including electricity and roads, but limited experience in procurement and infrastructure building has hampered these projects. The underlying economic policy challenge the country faces remains how best to use oil-and-gas wealth to lift the non-oil economy onto a higher growth path and to reduce poverty.
Country name:
conventional long form: Democratic Republic of Timor-Leste
local long form: Republika Demokratika Timor Lorosa’e Tetum; Republica Democratica de Timor-Leste Portuguese
local short form: Timor Lorosa’e Tetum; Timor-Leste Portuguese
former: East Timor, Portuguese Timor
Government type:
semi-presidential republic
US dollar (USD) and East Timor centavos
The gross domestic product (GDP) measures of national income and output for a given country’s economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.
In 2006, the GDP of East Timor dramatically rose from 3722.37 bil USD until 4306.85 bil USD (2008). During the middle of the year 2008, there is a slowly decrease until year to 2010. This is because of Rebel East Timorese soldiers events towards its president and cause a lot of damage and loss in their country.


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