After a reshuffling of the parliamentary coalition in mid-2020, Timor-Leste’s government remained stable during the review period and political institutions functioned well. In the 2022 presidential election, the incumbent president was defeated by nonpartisan former president José Ramos-Horta.
In order to mitigate the economic consequences of the COVID-19 pandemic, the government has provided financial assistance and essential goods to nearly all households from 2020 to 2023. However, the economy continues to rely on government outlays, with little progress toward diversification. As a highly petroleum-dependent country, Timor-Leste will face severe hardships when its Petroleum Fund is exhausted.
While the population remains the fastest growing in Southeast Asia, child malnutrition and poverty in Timor-Leste are among the worst in the world. Instead of developing the country’s human capital and implementing decentralized service delivery, the elite chose to hire foreign companies to construct large-scale infrastructure projects.
