The Democratic Republic of Timor-Leste is situated on the island of Timor, approximately 700km northwest of Darwin.
Timor-Leste has set down a clear development agenda to become an upper middle income country by 2030. Despite impressive progress since independence, the country's economic challenges are considerable. Timor-Leste remains one of the most oil-dependent countries in the world.
With two-thirds of the population living on less than US$2 a day, Timor-Leste is one of the poorest countries in the region. Most of the population live in rural areas and are heavily reliant on subsistence agriculture with little or no access to markets.
The key challenges facing Timor-Leste are the diversification of economic activity from public to private, and from petroleum into other sectors, while maintaining a sustainable fiscal position and improving services.
In 2017, two-way merchandise trade between Australia and Timor-Leste was worth $32.9 million. Australian exports to Timor-Leste totalled $30.4 million with major items including passenger motor vehicles and vehicle parts. Imports from Timor-Leste totalled $2.5 million, with nearly half consisting of coffee.
Australian development programs are contributing to the growth of a non-oil private sector in Timor-Leste, including through investments in health and education, governance and strengthening the business environment. In the financial year 2018-19, Australian aid reached 147,000 people through improved health, education and water and sanitation services.