Zhai Kun – The year 2025 holds significant promise for ASEAN as Malaysia takes on the role of the organisation's Chair. Among the anticipated milestones is the potential ascension of Timor-Leste from an observer state to a member state. The nation's membership application has faced repeated delays, attributed to speculations about its growing ties with China and, more critically, to its relatively underdeveloped social and economic systems.
As attention increasingly turns to Timor-Leste, particularly in light of its closer relationship with China, 2025 presents both opportunities and challenges. Timor-Leste must address its domestic developmental needs to strengthen its case for ASEAN membership, supporting its broader aspirations for growth and stability.
Since its establishment in 1967, ASEAN has achieved remarkable progress, fostering stability, growth and cohesion. Now a global economic leader, ASEAN excels in areas like the digital economy, green development and technological innovation, with key partnerships – including China – driving sustained growth. These achievements reinforce ASEAN's role as a stabilising force in a rapidly changing world. In many ways, Timor-Leste's trajectory stands in contrast with ASEAN's achievements, highlighting both the challenges and opportunities Timor-Leste faces in integrating into this dynamic regional bloc.
Timor-Leste, one of the few nations founded in the 21st century with full UN support, is often highlighted as a UN nation-building success – albeit by Western standards. It has achieved political stability and established a vibrant democracy, earning a reputation for its independent, non-aligned foreign policy and for amplifying its voice on the international stage.
The country has achieved significant milestones in infrastructure development, with population electricity access increasing dramatically from 38 per cent in 2010 to 96 per cent in 2020. Education has seen similar advances, with primary school enrolment reaching 92 per cent in 2015. The establishment of internationally recognised sovereign wealth fund management practices further demonstrates the country's growing institutional capabilities.
But substantial challenges remain. The United Nations Development Programme reports that 48.3 per cent of the population lived in multidimensional poverty in 2016, with 17.4 per cent in severe multidimensional poverty. Heavy reliance on oil revenues and limited economic diversification have further constrained development, highlighting the urgent need for revitalisation and diversification to foster long-term growth. Socially, modernisation remains elusive for Timor-Leste. Many citizens live under challenging conditions, far behind their ASEAN neighbours in development.
Timor-Leste's strategic location between Indonesia and Australia makes it increasingly susceptible to regional and global influences. This was evident when fears were raised by Australia and the United States after Timor-Leste upgraded ties with China to a Comprehensive Strategic Partnership in 2023, and again following Timor-Leste President Jose Ramos-Horta's visit to Beijing in 2024.
Like Timor-Leste, ASEAN once faced challenges of economic underdevelopment, political diversity and its positioning as a strategic location caught between competing powers. But ASEAN has successfully transformed geopolitical tensions into opportunities, leveraging them to generate substantial economic and political benefits while solidifying its influence on the global stage.
ASEAN's ability to maintain independence in its relations with major powers offers valuable insights for Timor-Leste. Through mechanisms like ASEAN Plus Three and the ASEAN Regional Forum, ASEAN fosters inclusive dialogue, urging external powers to respect ASEAN centrality. This balanced approach has allowed ASEAN to leverage partnerships for regional development while avoiding overreliance on any single power. Facing increasing regional and global geopolitical uncertainty, ASEAN's tradition of non-aligned foreign policy remains a critical asset. Positioned strategically between Southeast Asia and Australia, Timor-Leste must continue to ensure its foreign relations serve its development needs.
It is well recognised that ASEAN has maximised regional growth by engaging strategic partners, including China, which is now its largest trading partner. In 2021, ASEAN – China trade exceeded US$878 billion, with significant investments under the Belt and Road Initiative supporting infrastructure, technology and green development in the region.
Similarly, Timor-Leste must focus on tangible economic progress to sustain its political achievements. Timor-Leste has numerous options for support and cooperation, including international agencies like the United Nations, International Finance Corporation and the Asian Development Bank, as well as partnerships with the United States, European Union and Australia.
While this abundance of options is undoubtedly a blessing for Timor-Leste, it can also become a hindrance. There is a risk of indecision, where leaders adopt a 'wait-and-see' approach or struggle to commit to a specific direction. For Timor-Leste, strengthened economic ties with China and ASEAN could unlock significant opportunities. Even a fraction of China's market or foreign direct investment could bring transformative benefits to Timor-Leste's economy. Regional integration with ASEAN also offers pathways to diversify Timor-Leste's economy, access growing markets and participate in regional supply chains.
While geopolitical competition is creating opportunities, Timor-Leste must strengthen its institutions to ensure it can capitalise on them. ASEAN's success demonstrates the importance of institution-building through frameworks like the ASEAN Economic Community and the ASEAN Political Security Community. Yet Timor-Leste continues to struggle with political disunity and inefficiencies that significantly hinder social and economic development. Despite interest from partners like China, ASEAN and the European Union, Timor-Leste lacks foundational laws, such as investor protection legislation, that are critical for attracting investment. Building robust institutions and legal frameworks is essential for Timor-Leste to turn external interest into actionable progress.
[Zhai Kun is Professor at the School of International Studies and Deputy Director of the Institute of Area Studies, Peking University. This article was translated by Leike Huang. This is an abridged version of a speech presented by Dr Zhai Kun at the First China – Timor-Leste Cooperation and Development International Symposium and the Timor-Leste Development and Major Power Relations Forum at South China Normal University on 4 December 2024.]
Source: https://eastasiaforum.org/2025/02/21/timor-leste-looks-to-asean-for-membership-and-modernisation