page_title: East Timor
section_title: Economy
hierarchical_section_title: East Timor / Economy
caption_attribution_description: English: Mountain village in East Timor
context_page_description: East Timor or Timor-Leste, officially the Democratic Republic of Timor-Leste, is an island country in Southeast Asia. It comprises the eastern half of the island of Timor, the nearby islands of Atauro and Jaco, and Oecusse, an exclave on the northwestern side of the island surrounded by Indonesian West Timor. Australia is the country's southern neighbour, separated by the Timor Sea. The country's size is about 15,007 km².
  East Timor was colonised by Portugal in the 16th century and was known as Portuguese Timor until 28 November 1975, when the Revolutionary Front for an Independent East Timor declared the territory's independence. Nine days later, it was invaded and occupied by the Indonesian military; it was declared Indonesia's 27th province the following year. The Indonesian occupation of East Timor was characterised by a highly violent, decades-long conflict between separatist groups and the Indonesian military.
  In 1999, following the United Nations-sponsored act of self-determination, Indonesia relinquished control of the territory.
context_section_description: The economy of East Timor is a market economy, which used to depend upon exports of a few commodities such as coffee, marble, petroleum, and sandalwood. It grew by about 10% in 2011 and at a similar rate in 2012.
  East Timor now has revenue from offshore oil and gas reserves, but little of it has been spent on the development of villages, which still rely on subsistence farming. As of 2012, nearly half the East Timorese population was living in extreme poverty.
  The Timor-Leste Petroleum Fund was established in 2005, and by 2011 it had reached a worth of US$8.7 billion. East Timor is labelled by the International Monetary Fund as the "most oil-dependent economy in the world". The Petroleum Fund pays for nearly all of the government's annual budget, which increased from $70 million in 2004 to $1.3 billion in 2011, with a $1.8 billion proposal for 2012. East-Timor's income from oil and gas stands to increase significantly after its cancellation of a controversial agreement with Australia, which gave Australia half of the income from oil and gas from 2006.
  The country's economy is dependent on government spending and, to a lesser extent, assistance from foreign donors. Private sector development has lagged due to human capital shortages, infrastructure weakness, an incomplete legal system, and an inefficient regulatory environment. After petroleum, the second largest export is coffee, which generates about $10 million a year. Starbucks is a major purchaser of East Timorese coffee.
   9,000 tonnes of coffee, 108 tonnes of cinnamon and 161 tonnes of cocoa were harvested in 2012 making the country the 40th ranked producer of coffee, the 6th ranked producer of cinnamon and the 50th ranked producer of cocoa worldwide.
  According to data gathered in the 2010 census, 87.7% of urban (321,043 people) and 18.9% of rural (821,459 people) households have electricity, for an overall average of 38.2%.
  The agriculture sector employs 80% of East Timor's active population. In 2009, about 67,000 households grew coffee in East Timor, with a large proportion of those households being poor. Currently, the gross margins are about $120 per hectare, with returns per labour-day of about $3.70. There were 11,000 households growing mungbeans as of 2009, most of them by subsistence farming.
  In the Doing Business 2013 report by the World Bank, East Timor was ranked 169th overall and last in the East Asia and Pacific region. The country fared particularly poorly in the "registering property", "enforcing contracts" and "resolving insolvency" categories, ranking last worldwide in all three.
  As regards telecommunications infrastructure, East Timor is the second to last ranked Asian country in the World Economic Forum's Network Readiness Index (NRI), with only Myanmar falling behind it in southeast Asia. NRI is an indicator for determining the development level of a country's information and communication technologies. In the 2014 NRI ranking, East Timor ranked number 141 overall, down from 134 in 2013.
  The Portuguese colonial administration granted concessions to the Australia-bound Oceanic Exploration Corporation to develop petroleum and natural gas deposits in the waters southeast of Timor. However, this was curtailed by the Indonesian invasion in 1976. The resources were divided between Indonesia and Australia with the Timor Gap Treaty in 1989. East Timor inherited no permanent maritime boundaries when it attained independence. A provisional agreement (the Timor Sea Treaty, signed when East Timor became independent on 20 May 2002) defined a Joint Petroleum Development Area (JPDA) and awarded 90% of revenues from existing projects in that area to East Timor and 10% to Australia. An agreement in 2005 between the governments of East Timor and Australia mandated that both countries put aside their dispute over maritime boundaries and that East Timor would receive 50% of the revenues from the resource exploitation in the area (estimated at A$26 billion, or about US$20 billion over the lifetime of the project) from the Greater Sunrise development. In 2013, East Ti
caption: A mountain village in Aileu
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