Singapore – East Timor, the world's youngest nation, is struggling to find ways to achieve economic survival and needs external investment, President Xanana Gusmao said Tuesday.

One of the poorest countries in the world, East Timor is still looking for strategies to make itself self-sufficient, Gusmao said in a speech to business people in Singapore where he appealed for foreign investment.

"It is a problem now when we talk about nation-building, when we talk about survival of East Timor," Gusmao said. "How can we survive? Investment for internal market? No way, our people live for less than 50 cents a day. With Indonesia how can we compete?"

A weak police and judicial system and lack of education are among the main obstacles for investment, he said. "Sometimes people say I am trying to discourage investors by talking about lack of laws, but they will come, and if I say everything is good they will say: 'He lied to us."'

After Gusmao's speech, Singapore's Ambassador-at-Large Tommy Koh spoke in support of investing in East Timor, saying the country had "the best coffee in the world," untapped oil and gas deposits and a large low-wage labor force.

The United Nations formally recognized East Timor in September 2002 after centuries of Portuguese rule and years of often brutal Indonesian occupation. East Timor voted to become independent in August 1999 in a UN-sponsored referendum.

The Indonesian military and its proxy militias responded by laying waste to the former province, killing 1,500 Timorese and forcing 300,000 from their homes.