Asia, explained.

A woman buys vegetables from a street vendor in Dili, East Timor, on September 12, 2024. (Photo by Yasuyoshi CHIBA / AFP) (Photo by YASUYOSHI CHIBA/AFP via Getty Images)

A woman buys vegetables from a street vendor in Dili, East Timor, 12 September 2024 (Yasuyoshi Chiba/AFP via Getty Images)

Timor-Leste joins the Asia Power Index

Despite its small size, the Southeast Asian nation should not be underestimated.

Jack Sato,Susannah Patton

24 September 20244 min read

When we think of power, we typically focus on the economic strength and military might of a country. Timor-Leste, the newest addition to the Lowy Institute’s Asia Power Index, has a tiny GDP of just under US$6.5 billion at purchasing power parity, and fewer than half the armed forces personnel of Papua New Guinea.

Yet the Asia Power Index provides a more comprehensive view that considers both a country’s resources and the influence it wields in Asia. Timor-Leste shows that despite its small size, and ranking 26th out of 27 Index countries for comprehensive power, it has influence to be reckoned with.

Timor-Leste ranks 20th for diplomatic influence. This relatively high score – beating more sizeable countries such as Sri Lanka – is a result of Timor-Leste’s investment in three fields of diplomacy: its Southeast Asian neighbours, the Portuguese-speaking world, and multilateral organisations.

Participation in multilateral meetings was an unusually strong driver of international engagement for Timor-Leste.

Within Southeast Asia, Dili has diplomatic representation in the capitals of every ASEAN country, along with three consulates in Indonesia. Since having its admission to the Association of Southeast Asian Nations agreed in principle, Timor-Leste has attended all meetings at leader and foreign minister level, including special summits with dialogue partners such as Australia. In 2024, it has also begun attending ASEAN defence ministers’ meetings.

The Asia Power Index incorporates research from the Lowy Institute’s Global Diplomacy Index, which captures Dili’s strong ties with the Lusophone, or Portuguese-speaking, world. It has diplomatic representation in half of the other Lusophone Community (CPLP) member countries: Brazil, Mozambique, Portugal, a new post in Angola opened in 2024, and a standalone mission to the CPLP headquarters in Lisbon.

Timor-Leste has also prioritised its relationships with multilateral organisations. This includes its diplomatic representation to those organisations and participation in multilateral diplomatic dialogues, an indicator for which it ranks 10th, attending 55 meetings with other Index members in 2023. Participation in multilateral meetings was an unusually strong driver of international engagement for Timor-Leste, accounting for 31 of 40 total overseas trips by its leaders and foreign minister.

Timor-Leste ranks 20th for diplomatic influence, partly as a result of its links to the Portuguese-speaking world (Ano Tome/Unsplash)

That Timor-Leste is so diplomatically active even before it has acceded to ASEAN suggests that its influence will likely continue to grow in the years to come.

The Asia Power Index paints a mixed picture of Timor-Leste’s resilience, which we define as the capacity to deter threats to state stability. Timor-Leste ranks 22nd for this measure, ahead of three ASEAN members: Cambodia, Laos and Myanmar. The country performs relatively well when it comes to political stability, ranking 10th, and in the resource security sub-measure. Timor-Leste currently has a favourable energy and fuel trade balance, and strong energy self-sufficiency. However, it has low fuel security, with a deficit of refined petroleum as a proportion of GDP of approximately five per cent. On other dimensions, including geoeconomic security, it performs less well, with limited and undiversified trade relationships. The country also has very limited international physical connectivity, with flight connections to only Bali and Darwin.

Much will also depend on the relationships that Timor-Leste has with its neighbours, Indonesia and Australia.

For Timor-Leste, much will depend on the future of its sovereign wealth fund, the Petroleum Fund of Timor-Leste. Currently, the country has the tenth-largest sovereign wealth fund in the region. However, its value is declining each year, and there are concerns over the future of the fund, with predictions that it will be depleted within ten years unless further resources from the Greater Sunrise gas field are realised.

Much will also depend on the relationships that Timor-Leste has with its neighbours, Indonesia and Australia. Timor-Leste’s admission into the Asia Power Index resulted in large gains for Indonesia in its influence measures. Nearly 60 per cent of Timor-Leste's diaspora population resides in Indonesia, along with more than 1,000 Timorese students undergoing tertiary education there. In terms of trade and inward investment, Indonesia is by far Timor-Leste’s largest partner, accounting for around a quarter of the total for each indicator.

For Australia, the Asia Power Index confirms that Timor-Leste, despite its small size, should not be underestimated. It has strengths as well as vulnerabilities, and its diplomatic clout, which looks set to rise in the years ahead, means its leaders will continue to staunchly defend its interests – including in the context of negotiations over Greater Sunrise. And while Indonesia’s influence in Timor-Leste is apparent in several indicators, Australia’s role stands out in only one dimension, as the largest aid donor, providing about 50 per cent of all aid to Timor-Leste from Asia Power Index countries.