Annemarie Evans – Australian armoured vehicles patrol the streets of East Timor's capital, Dili, amid the burned-out shells of houses and food warehouses looted by marauding gangs, who for weeks have laid waste to neighbourhoods and forced tens of thousands of terrified civilians into refugee camps. What was lauded as the United Nations success story in nation-building has become a lawless territory.

But what has caused East Timor to disintegrate and what hope is there for this tiny country's future? "I think a big mistake made by the Australians and the UN was not recognising how far East Timor had to go," said nation-building expert Seth Jones, of the Rand Corporation, a US think-tank.

When the interim administration, the UN Transitional Administration for East Timor, left in 2002 after elections were held, it was replaced by the UN Mission of Support in East Timor. The UN and Australian presence was gradually wound down.

East Timor's Foreign Minister and recently appointed Defence Minister Jose Ramos Horta said yesterday that UN involvement with East Timor should last for at least a decade from 2002, and that if the international community believed in nation-building then there could be no cost-cutting.

But so far, the UN has only committed for a further two years during which the organisation will provide an international police force. UN envoy to East Timor Ian Martin spoke to both East Timorese President Xanana Gusmao and embattled Prime Minister Mari Alkitiri in Dili last week before flying to New York to brief the UN.

Mr Jones agreed with Mr Ramos Horta on the need for a decade-long commitment. "East Timor needs the same time-frame as Bosnia and Kosovo, where an international presence has been for at least the past 10 years," he said. "What East Timor needs most is international assistance provided over a long time. These steps include training the police, providing a judicial system, basic health, basic law, and reconstruction."

Mr Jones and John M. Miller, the national coordinator of the Washington-based East Timor and Indonesia Action Network, agreed that police training by the UN and Australia was inadequate, partly leading to the current unrest.

Dili-based human rights lawyer Aderito de Jesus Soares also said nation-building efforts were insufficient. "I think the UN pulled out too early," he said. "It failed to establish a strong, democratic foundation, especially in dealing with the defence force and police."

After the referendum in 1999, when East Timor's population voted to break away from Indonesia, many of the police officers had been working towards Indonesian integration. They soon returned to Indonesia or simply melted away, leaving a security vacuum.

East Timor's problems partly stemmed from the senior leaders of the armed forces being chosen from the east of the country, while lower ranks came from the west, sparking claims of discrimination.

But to class the current unrest as an east-west divide was an over-simplification, according to Mr Miller and Manuel Jaime Ximenes, a Sydney-based East Timorese and former member of the National Council of East Timorese Resistance.

"There is more than just a problem with discrimination," said Mr Ximenes. "As a people we're based on traditional values of kinships. Previously we had different areas with different rulers."

But this broke down under the Indonesian occupation. Hundreds of thousands of refugees were displaced, with many moving to other people's houses and other people's land. Many of these land-rights issues still needed to be resolved, said Mr Ximenes.

Mr Miller said that much of what had been going on in recent days was a result of poverty. "It's clear to us that the later phases of violence have been fuelled by poverty; gangs of unemployed young men with nothing else to do." He said this was partly due to the dysfunctional justice system. "This fuels a lot of tit-for-tat violence," he said. "The issue of justice is extremely important."

Mr Ximenes and Mr Soares also pointed the finger at the administration. "There's been a failure in the past four years by this government to communicate with the people," said Mr Soares.

Mr Ximenes said the personal differences between the three main leaders – Mr Gusmao, Mr Ramos Horta and Mr Alkitiri – were also a factor. Although the going had got tough, it was not possible to oust Mr Alkitiri, said Mr Ximenes. Mr Alkitiri is seen as unpopular next to the charismatic Mr Gusmao, but Mr Alkitiri heads Fretilin, and there's a danger of alienating the party, sparking more unrest.

Mr Jones put East Timor on a footing with Afghanistan. While East Timor had no insurgency problems, it was on the same level with its justice system, health, education and other indicators.

East Timor's oil and gas reserves will help the country in the long term. Higher oil prices have helped, but other projects will take years to show profit. So, to quell the simmering tensions and violence, East Timor still must look to its neighbours. "As with most of these operations, the most important countries are the donor states in the geographical area near these states," said Mr Jones. "So, in the case of East Timor, that would be Australia and possibly New Zealand."

Australia is overstretched with Iraq, Solomon Islands and other operations. But Australia, with US backing, is keen to have influence as China eyes East Timor's energy supplies for its booming economy.

If East Timor is left to its own devices, then with the current unrest, the future doesn't look rosy. However, both Mr Miller and Mr Jones are optimistic, provided an international taskforce can guide East Timor through a few more years.