In 2024, as Timor-Leste prepares to mark 25 years since its vote for freedom from Indonesia both its many achievements and potentially existential risks are both plain to see.

2023 was an El Nino year, and word around Dili was that might mean drought. The anxiety had been hard to perceive from abroad — with news feeds focused more on ASEAN and the election — but in Dili it was the weather that had people worried. While one wouldn’t know it from looking at the 2024 budget (only around 2 per cent went to agriculture) Timor-Leste remains a country of farmers, and even in the capital, the prospect of crop failure elicits genuine fear.

Dili is bigger than ever and smoke from swidden gardens increasingly mingles with other sources of urban haze — smouldering rubbish, traffic (macet) and dust kicked up by trucks heading to the once sleepy Tibar Bay, now replete with a container port. Nearby, mangroves make way for the Pelican Paradise Resort. An expansion awaits the airport where, each morning, an ‘Aero Dili’ Airbus takes off for Bali. The pre-flight safety demonstration is in Tetun. On the former headquarters the Associação Social-Democrata Timorense, a Singaporean company is building the Singaporean sounding Timor Marina Square, with the decidedly non-socialist tagline, ‘the place for ultimate indulgence’.

All of these developments are imperfect. All are debated in the lively Tetun language press. All evoke various sorts of pride. None obviate the reality that if there’s too much rain (or too little), or an earthquake, or a rice shortage, or a shortage of money, all could be swept away.

This mix of precarity and pride was felt in the 2023 parliamentary election. A ‘festa demokrasia’ with a frisson of tension, because while Timor-Leste is rated the most democratic country in Southeast Asia, it is also a place of loyalties that go beyond democratic process. There was frustration that the election was still partly a competition between former prime ministers Xanana Gusmao and Mari Alkariti, men in their 70s whose status as heroes is beyond reproach, but whose understanding of the world in 2024 is not.

After his victory, Gusmao appointed of a 47-person cabinet, either a masterclass in delegation or shoring up a patronage network, depending on who you ask. His inaugural speech was ambitious. It aimed to repeal Oecussi’s autonomous status, audit the anti-corruption commission, public prosecutor and electoral commission, review criminal cases and restructure the state oil company — all to ‘save the democratic rule of law’. With promises in process (or not), the clearest takeaway is that in 2024, the rivalry between former prime minister Mari Alkatiri’s Fretilin and Prime Minister Xanana Gusmao’s National Congress for Timorese Reconstruction remains central to Timor-Leste’s politics.

Gusmao’s inaugural speech also touched on an issue dear to the hearts of Australian diplomats, politicians and public servants — petroleum. The Greater Sunrise LNG field would be developed, but only through the construction of a pipeline to Timor. This is a conundrum. The operating partner, Woodside Energy, is reluctant, and the project is stalled.

Time to find a solution is running out. In November 2023, the Bayu-Undan LNG field ceased production, effectively rendering Timor-Leste a petrostate with no access to oil or gas. Its government now relies mostly on its US$16 billion petroleum fund, which some estimate will last a decade. Budget cuts might buy time but are destabilising, given the importance of state wages and pensions.

Fortunately, a solution is in sight. In December 2023, the Sunrise Joint Venture tendered a ‘concept study’ of the Greater Sunrise project. Results are pending, but a compromise seems possible — perhaps with the bulk of the LNG processed in Darwin or at sea, alongside a smaller pipeline supplying gas for domestic use.

Though exciting, this is no panacea. Timor-Leste has received petroleum revenue since 2005. To be fair, this has funded advances in electrification and roads, yet metrics for malnutrition, unemployment and ease-of-doing-business, remain grim. In 2023, Timor-Leste returned to the World Bank’s list of fragile states. If nothing changes, Greater Sunrise will delay, not avoid, a fiscal cliff.

Meanwhile, people get by. In the hills most are farmers, but schools remain focussed on training administrators, not agriculturalists. Many young Timorese aspire to study or work abroad.

There are more Timorese migrants in Australia than ever, some 5281 in November 2023. Only 4118 of these are with the Pacific Australia Labour Mobility (PALM) scheme. 914 have left the scheme and applied for asylum to access a bridging visa which, unlike PALM, allows them to work wherever they wish, pending their asylum application’s inevitable rejection a few years later.

One wonders why the Australian government does not take seriously the preference of Timorese workers to their own thing and apply for subclass 462 Work and Holiday visas. Indonesians can.

Policy and politics aside young Timorese tend to be excited by the outside world, both the possibility of venturing into it and the ideas and resources they can bring home. Timor-Leste now has its own franchise of bakeries, a great café culture and ever more locally produced staples. Indonesian brands are everywhere, but often have Tetun language by-lines. Consumers are assured that Bintang Beer is ‘sempre ho ita’ (always with you). As Timor-Leste prepares to join ASEAN this growing self-confidence in engaging with the consumer culture (and, by extension, economy and popular culture) of its giant neighbour is a trend worth watching.

Timor-Leste is not, as the Australian Financial Review recently declared, on ‘the brink of failure’, but formidable challenges are ahead. Timor-Leste has, as President Jose Ramos-Horta says, ‘an exceptional people’. In 2024, its leaders owe it to them to see the risks ahead and provide them with a foundation to build their lives upon that isn’t liable to crumble.

Michael Rose is an anthropologist and research associate at the University of Adelaide. He has previously worked for the Australian National University, the United Nations and the Asia Foundation. You can download his book on Timor-Leste’s Oecussi enclave here.

This article is part of an EAF special feature series on 2023 in review and the year ahead.