Timor-Leste in 2017: A State of Uncertainty

Timor-Leste enters 2018 facing an uncertain future on a number of political and economic fronts. This review focuses on three issues: first, the progress of the Timor Sea negotiations with Australia in 2017; second, Timor-Leste's bid for ASEAN membership; and finally, the processes and outcomes of the presidential and parliamentary elections. By the year's end, the events of 2017 relating to these key issues have left Timor-Leste's political situation in an indeterminate state.

An agreement between Australia and Timor-Leste on resolving the long-running dispute over hydrocarbon resources and maritime boundaries in the Timor Sea will be integral to the short- and medium-term economic viability of the Timorese state. While the apparent resolution of the maritime boundaries dispute has been viewed as a moral victory, we currently know little about where the boundaries will be located or the specifics of the special regime that will govern the lucrative but contested Greater Sunrise gas field. How these negotiations will alter Timor-Leste's plans to develop oil industrialization capabilities also remain unknown. On the second major international relations issue — ASEAN membership — Timor-Leste finishes the year once again unsuccessful in its pursuit of joining the organization, as the current member states remain doubtful about the country's economic and diplomatic capacities. This again leaves Timor-Leste's membership prospects in suspension, and, consequently, its identity status as a Southeast Asian state remains ambiguous.

In terms of domestic politics, Timor-Leste held the third set of presidential and parliamentary elections since its independence in 2002. As such, the elections provided some important insights into democratic consolidation, and were widely regarded as well run. The national parliament elections in particular produced surprise outcomes and led to a peaceful change of government, replacing the sixth government of "National Unity" that comprised a cosy coalition between the two major parties, CNRT and FRETILIN. Subsequent to the election, the formation of new coalitions between political parties rendered obsolete those observations that oppositional politics had ended. The description by Dennis Shoesmith in Southeast Asian Affairs 2017 of Timor-Leste as a "consociational" and "controlled" democracy that had ostensibly replaced conflict with consensus has now been supplanted, as a parliamentary majority opposition has emerged that threatens the authority of the new FRETILIN-led minority government.¹ Now, instead of no opposition, there may to be too much, highlighting the fluidity of the domestic political context. Timor-Leste's new government has been unable to pass its national agenda through parliament, potentially setting the scene for a constitutional crisis and, perhaps, new elections.

The Timor Sea dispute

In regards to the long-running Timor Sea dispute between Australia and Timor-Leste, the year started with a bombshell. In January 2017 the states released a joint press release that revealed their agreement to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS). The CMATS was a controversial treaty originally designed to distribute revenues derived from Greater Sunrise. It was ultimately unsustainable because many Timorese viewed the deal as unfair. An earlier 2003 International Unitisation Agreement (IUA) positioned nearly 80 per cent of the field in Australia's territorial waters, yet the CMATS agreement mandated a 50:50 split in Greater Sunrise revenues. The CMATS also set aside two key sticking points: the delimitation of maritime boundaries and the development of Greater Sunrise. On the latter, Timorese leaders wanted a pipeline built to carry the gas to an onshore processing plant on the south coast of Timor-Leste. However, the venture partners, headed by Woodside, considered the pipeline unviable and consequently shelved production of the field. Consequently, Timor-Leste began pursuing delimitation of relevant maritime boundaries and employing legal proceedings to dissolve the CMATS. Australia, meanwhile, was steadfast in its support for retaining the treaty. Thus, the news of CMATS' demise was viewed by many as a significant win for Timor-Leste. In mid-January it became evident that the quid pro quo for Australia acquiescing to the dissolution of CMATS was Timor-Leste's commitment to dropping the two international legal proceedings that it...