Joanne Collins, Dili – Less than three years ago East Timor's seaside capital was a charred ruin, but now Britney Spears CDs, Singapore noodles and beauty salons are easily found in what is once more a thriving centre.

Dili has traffic jams, restaurants are crowded and infused with the aroma of espresso coffee, and buildings that survived the 1999 violence have been given a coat of paint.

More than 80 percent of Dili's buildings were destroyed by delirious, machete-wielding pro-Jakarta militia following the tiny territory's overwhelming vote in August 1999 to break from 24 years of harsh Indonesian rule.

Piles of twisted metal and corrugated iron still lie in the gutters, and sandbags and razor wire erected by the international force which moved in to halt the destruction surround some buildings.

But with business buzzing and the territory last Sunday peacefully electing former independence hero Xanana Gusmao its first president, there's a strong sense the former Portuguese colony is coming back to life as it counts down to formal independence next month.

"The reconstruction of buildings is something very visual and helps give the people a feeling of hope, that things are going forward," said Portuguese architect Pedro Reis who has played a key role in helping rebuild the tiny territory over the past two years.

Restoring East Timor from the ashes will be a major task for the widely popular Gusmao who as expected won a crushing election victory against his only rival Francisco Xavier do Amaral when the results were announced on Wednesday.

Make over

One of the more noticeable changes has been the rebuilding of the prominent waterfront residence of Bishop Carlos Belo, where several thousand people sheltered from rampaging gangs of militia.

The Portuguese-era house now bears few scars from the post-ballot violence. It has almost been fully reconstructed, the exterior has been painted pink with blue trimmings and a crumbling Virgin Mary statue has been taken away. "I am not sure why the bishop chose pink, maybe the contractors just came in and did it," said Olandino Xavier, who lives in the bishop's compound.

Workers have been setting a furious pace in recent weeks to finish the building where the Pope's representative will stay during independence celebrations on May 20.

Reis said there was a concerted push to clean up Dili in readiness for the thousands of foreign dignitaries, celebrities and media expected in East Timor for the celebrations.

Coordinating the reconstruction of territory from scratch has been a mammoth task. Most materials were imported as builders lacked even hammers and nails. "We found lots of tradesmen with previous experience but they were a bit disorganised because they had lost everything," Reis said.

Rebuilding has been on a much smaller and slower scale outside of Dili, where people live far more simply and are isolated from the rest of the world.

Big spenders

Timorese born Australian Jose Teixeira said no one could have predicted the boom that has swept Dili since the independence vote and he is not expecting investment to grind to a halt once the United Nations – which has run East Timor since the 1999 vote – winds down its mission.

"I returned to East Timor in November 1999 and there has been tremendous change during this time – we are a million light years away from where we were then," said Teixeira, a senior adviser to the director of investment and tourism.

The top three investors in East Timor were neighbours Singapore, Indonesia and Australia, he said. "The level of investment has continued to be maintained at the same level since before the constituent assembly elections last August," he said. "We have clay brick factories and asphalt plants going up and there are proposals for sugar mills and mineral water is being bottled here."

The International Monetary Fund (IMF) has said East Timor is likely to face a tough period in 2002-2003 due to the UN's withdrawal but that solid private sector investment would foster growth of around six percent per year. Some analysts say East Timor's economy contracted by as much as 40 percent in 1999-2000 and grew some 18-20 percent in 2000-2001.