Timor-Leste Steps into ASEAN with Gains, but Faces Long Road to Convergence

Timor-Leste's entry into the Association of Southeast Asian Nations (ASEAN) marks a significant milestone, but not an unfamiliar one. According to a recent brief by the Asian Development Bank (ADB), the country's development gaps are similar to those faced by earlier entrants such as Cambodia, the Lao PDR, Myanmar, and Vietnam. These countries joined with clear disadvantages but gradually caught up through reforms, stronger institutions, and regional cooperation.

The ADB's message is straightforward: Timor-Leste is not an outlier. It is following a well-established ASEAN path where initial gaps are expected, and progress depends on sustained effort and support.

Progress Achieved, But Pandemic Setbacks

ASEAN has a strong record of helping member countries narrow development gaps. Between 2000 and 2019, poorer economies in the region made steady gains in income, health, and financial access. Trade, infrastructure, and policy reforms played a major role in this success.

However, the COVID-19 pandemic disrupted this progress. Recovery has been uneven, especially for lower-income countries. Poverty has increased again, and improvements in human development have slowed or reversed in some cases.

Timor-Leste has faced similar challenges. Its economy contracted during the pandemic and is still recovering. While growth has resumed, income levels have not yet fully returned to where they were before the crisis.

Strong Foundations for Growth

Despite these challenges, Timor-Leste starts from a stronger position than many assume. Its development indicators today are comparable to those of Viet Nam at the time it joined ASEAN. In some areas, it is even ahead of where other low-income members once stood.

The country has made clear progress in literacy, electricity access, and gender equality. Literacy rates have risen significantly over the past two decades. Electricity access is now universal. Women hold a large share of parliamentary seats, placing Timor-Leste among the region's better performers in gender representation.

These achievements provide a solid base for future growth. But important gaps remain. Health and nutrition outcomes remain weak, financial access remains limited, and many people lack the skills needed for modern jobs.

Digital and Economic Challenges Ahead

One of the biggest opportunities for Timor-Leste lies in digital development. Internet access remains low, and mobile network coverage is incomplete. Improving digital infrastructure and skills could help the country grow faster and connect better with the regional economy.

At the same time, the economy is heavily dependent on oil revenues. This makes it vulnerable to price changes and limits long-term growth. Diversifying the economy is therefore critical. Sectors such as agriculture, fisheries, tourism, and green industries offer strong potential.

Building a stronger private sector is also key. Small businesses need better access to finance, simpler regulations, and improved infrastructure. With the right support, they can create jobs and drive growth.

The Role of ASEAN and the Road Ahead

Timor-Leste will not face these challenges alone. ASEAN has systems in place to support newer members through training, funding, and policy coordination. Development partners are also expected to play an important role by aligning their support with the country's priorities.

The focus now is on implementation. Strengthening institutions, improving governance, and building state capacity will be essential. Investments in education, health, and social protection will help ensure that growth benefits everyone.

The ADB's assessment is cautiously optimistic. Timor-Leste's situation is not unique, and the region has successfully supported similar transitions before. With the right mix of reforms, investment, and regional cooperation, the country has a clear path toward closing the development gap.

In the end, Timor-Leste's ASEAN journey is less about catching up from behind and more about how effectively it can turn its opportunities into lasting progress.