Despite the Odds: Timor-Leste’s Quest to Avoid a Debt Trap Dilemma and Achieve Democratic Stability

The successful mediation of Timor- Leste’s and Australia’s contested maritime boundary, announced by the Permanent Court of Arbitration in The Hague roughly one year ago in March 2018, is one in a string of recent positive developments for this small, burgeoning democracy. The promising conciliation process comes atop a fractious yet ultimately peaceful political standoff in 2017-2018. It is also welcome news given the country’s ongoing efforts to escape the resource curse tied to an excessive dependency on offshore oil and gas reserves. Taken together, these interlinked trend lines will determine whether Timor- Leste emerges as a robust democracy with a diversified economy, succumbs to political infighting, burdened by an over-reliance on limited natural resources, or – worse – winds up as the latest victim of China’s debt trap diplomacy.

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