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Timor-Leste or East Timor, officially known as the Democratic Republic of Timor-Leste, is a small island nation situated in Southeast Asia. Despite its relatively small size, the country has a rich history and culture, having been colonized by Portugal for over 400 years before gaining independence in 2002. Today, Timor-Leste boasts a diverse economy that is heavily reliant on its natural resources and international trade partnerships.

Overview of Timor-Leste’s Economy

Timor-Leste'S EconomySource:

The economy of Timor-Leste is largely characterized as being underdeveloped and highly dependent on the oil and gas sector. According to the World Bank, oil and gas account for around 90% of the country’s total exports and around 80% of its government revenue. In recent years, the government has made efforts to diversify its economy by developing its non-oil and gas sectors such as agriculture, fisheries, and tourism.

Oil and Gas Sector

Timor-Leste'S Oil And Gas SectorSource:

The oil and gas sector is the main driver of Timor-Leste’s economy. The country is located in a resource-rich region of the Timor Sea, and has significant reserves of oil and gas. The majority of the country’s oil and gas reserves are located in the Greater Sunrise field, which is jointly owned by Timor-Leste and Australia. In recent years, the country has made efforts to invest in the development of its oil and gas infrastructure, including the construction of a liquid natural gas plant.

Agriculture Sector

Timor-Leste'S Agriculture SectorSource:

The agriculture sector is the second largest employer in Timor-Leste, accounting for around 25% of the country’s GDP. The country has a diverse range of agricultural products, including coffee, rice, maize, cassava, and sweet potatoes. Despite the potential of the sector, however, there are several challenges that hinder its growth, including poor infrastructure, limited access to credit, and the effects of climate change.

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Fisheries Sector

Timor-Leste'S Fisheries SectorSource:

The fisheries sector is an important source of food and income for the people of Timor-Leste, particularly for those living in coastal communities. The country has rich fishing grounds, with a diverse range of fish and shellfish species. However, the sector faces several challenges, including overfishing, illegal fishing, and limited access to modern fishing technologies and equipment.

Tourism Sector

Timor-Leste'S Tourism SectorSource:

The tourism sector is a growing industry in Timor-Leste, with the government making efforts to develop the country’s tourism infrastructure and attract more visitors. The country has several tourist attractions, including historical landmarks, beautiful beaches, and cultural festivals. However, there are several challenges that hinder the growth of the sector, including limited infrastructure and services, lack of promotion and marketing, and concerns over safety and security.

Trade Partnerships

Timor-Leste'S Trade PartnershipsSource:

Timor-Leste has established trade partnerships with several countries, including Australia, China, and Indonesia. The country’s main exports include oil and gas, coffee, and sandalwood. In recent years, the government has made efforts to diversify its exports and strengthen its trade relationships with other countries.


In conclusion, Timor-Leste’s economy is heavily reliant on its natural resources, particularly its oil and gas reserves. However, the government has recognized the need to diversify its economy and develop its non-oil and gas sectors, including agriculture, fisheries, and tourism. Despite several challenges, the country has made progress in promoting economic growth and reducing poverty.

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