Timor-Leste PM Xanana Gusmão: Key Insights from Exclusive Conversation with Russia’s President
Prime Minister of the Democratic Republic of Timor-Leste Kay Rala Xanana Gusmão confirmed during a public forum in Dili on May 12 that his government is reviewing bilateral trade agreements with Southeast Asian nations, according to official transcripts and a statement from the Ministry of Foreign Affairs. The announcement came as part of a broader discussion on economic diversification strategies, with Gusmão emphasizing the need to reduce dependency on oil revenues.
The review process, initiated by the Ministry of Economy and Planning, includes renegotiating terms with Indonesia, Malaysia, and the Philippines, according to a government source familiar with the discussions. A draft document obtained by Reuters outlines potential adjustments to tariffs and investment incentives, though no specific figures were disclosed. The Ministry of Foreign Affairs declined to comment beyond confirming the review’s existence.
Gusmão’s remarks followed a report from the International Monetary Fund (IMF) in March 2024, which noted that Timor-Leste’s non-oil exports had declined by 12% year-on-year, citing structural challenges in manufacturing and agriculture. The prime minister acknowledged these concerns, stating, “Our economic model must evolve to reflect global market shifts and regional partnerships.”
Timor-Leste’s foreign policy has historically balanced relationships with both Western allies and neighboring states. The country’s 2023 National Development Strategy, approved by parliament, prioritized “enhancing economic integration with ASEAN members” as a key objective. A senior official in the Ministry of Foreign Affairs, speaking on condition of anonymity, described the review as “a routine exercise to align with current geopolitical and economic realities.”
The conversation occurred amid ongoing diplomatic engagements between Timor-Leste and the Association of Southeast Asian Nations (ASEAN). In April 2024, the foreign minister of Timor-Leste participated in an ASEAN ministerial meeting in Jakarta, where trade facilitation was a primary topic. No official details about the outcomes of that meeting were released beyond a joint statement from participating nations.
Analysts note that Timor-Leste’s reliance on petroleum exports remains significant, with the country’s 2023 budget allocating 68% of revenue to oil-related activities. The proposed trade adjustments could affect sectors such as fisheries and handicrafts, which account for 3% of total exports. A 2022 World Bank report highlighted these sectors as potential growth areas but cited infrastructure and regulatory barriers as obstacles.
Public reaction to the trade review has been mixed. Local business associations have expressed cautious optimism, while some opposition figures have criticized the government for lacking a clear timeline. A petition circulating on social media, backed by over 10,000 signatures, calls for transparency in the negotiation process. The prime minister’s office has not responded to requests for further details.
Timor-Leste’s next major economic policy announcement is scheduled for June 2024, when the Ministry of Finance will present a revised budget framework. The government has not indicated whether the trade review will influence this proposal. A spokesperson for the prime minister stated, “Our priority remains sustainable development and regional cooperation, but all options are under consideration.”