Economics and Agribusiness in Timor Leste

The Democratic Republic of Timor Leste is a small insular country in the South Pacific. Internationally recognized as an independent semi-presidential republic in 2002, Timor Leste was occupied by Indonesia for several decades after achieving independence from Portugal in 1975. Currently, Timor Leste has a total territory of almost 14.900 square kilometers, which is somewhat larger than Connecticut. The country has a tropical climate as well as a mountainous terrain and 706 kilometers of coastline.

Today, Timor Leste has a total population of approximately 1.3 million citizens, of which some 34% live in an urban setting, particularly the capital city of Dili with 230.000 inhabitants. Furthermore, the country’s population is predominantly young, with a median age of 19 years. The annual gross domestic product (GDP) of the country is about US$5 billion (PPP) and it has experienced positive economic growth upwards of 4.0% in recent years. The national economy is divided into 10% agriculture, 57% manufacturing, and 33% services. Likewise, it is estimated that the agricultural industry employs 64% of the national labor force, while manufacturing employs 10% and services employ another 26%. Meanwhile, the agriculture industry utilizes 25% of the national territory, while another 49% is forested. In terms of natural resources, Timor Leste has gold, petroleum, natural gas, manganese, and marble. Most of the country’s fossil fuels are offshore in the Timor Sea and they are exploited jointly with Australia. Within manufacturing, the national industry is focused on printing, soap manufacturing, handicrafts, and woven cloth. Simultaneously, the country’s agricultural industry has as main products coffee, rice, corn, cassava, tapioca, sweet potatoes, soybeans, cabbage, mangoes, bananas, and vanilla.

Economics and Agribusiness in Timor Leste

In terms of trade, during 2015, Timor Leste imported US$310 million worth of goods and exported US$306 million, resulting in a negative trade balance of almost US$4 million. Furthermore, Timor Leste’s main export, representing 93% or US$284 million of the country’s total in 2015, was crude petroleum. On the other hand, the country’s main import that same year, representing 12% or US$38.4 million of all international purchases, was refined petroleum. Similarly, Timor Leste’s main trading partners are Singapore, China, Thailand, and Malaysia, amongst others.

Unfortunately, in Timor Leste, approximately 300.000 people suffer from undernourishment. Likewise, in recent years, the average per capita protein intake of animal origin amongst national population has been about 17 grams daily. Simultaneously, land distribution and output in Timor Leste have evolved throughout the last half century. Back in 1961, permanent pastures and meadows in the country covered 150.000 hectares, while arable land covered 70.000 hectares and permanent crops accounted for 10.000 hectares. More recently, by 2014, permanent pastures and meadows still represented 150.000 hectares, while arable land had increased to 155.000 hectares and permanent crops covered 75.000 hectares. Similarly, in 1961, the cereals market in Timor Leste utilized 24.400 hectares of land and yielded almost 34.300 metric tons annually. Finally, in 2014, the country devoted some 65.500 hectares of land to cereals production and yielded 191.300 metric tons.

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