Phillip Winn – After decades of dominance, Fretilin's star appears on the wane.

The mood for change in East Timor has been tangible and leaders of the ruling Fretilin Party have sensed it.

They can certainly have few illusions now, following the recent outcome of the nation's presidential election when their candidate, Francisco Guterres ("Lu Olo"), was trounced in a second round run-off against Jose Ramos Horta, who stood as an independent.

The final tally suggests Horta garnered some 70 per cent of the vote. The result reflects long-standing and widespread frustration with the governing Fretilin Party, in particular its failure to meet popular expectations of post-independence prosperity.

How deep this disillusionment runs remains to be seen with the real test coming at the parliamentary elections, scheduled for June 30.

If the result of the presidential race is repeated, the political map of East Timor will be radically redrawn. Fretilin's near-absolute dominance as the natural party of national independence will be over.

It is still too early to suggest that elections for the nation's legislature will mirror the presidential result. The Fretilin political machine is formidable. It remains the most organised of parties, particularly in rural areas.

The loss of Fretilin's presidential candidate came as no surprise but the failure of the party's regional organisation to deliver a greater share of the votes was a shock. As recently as 2005, Fretilin dominated a series of local government elections.

It was the crisis of 2006, when gang violence and international soldiers returned to Dili's streets, that seems to have focused widespread discontent.

Nevertheless, in the parliamentary elections, local candidates and political programs will have far more of a role to play.

The presidential race was all about leadership personalities; little detail was on offer of plans for the future.

Symbols are potent in East Timor, and the Fretilin Party retains its strong association with the struggle for independence. But with outgoing President Xanana Gusmao fronting a new party, the National Congress for Timorese Reconstruction (CNRT) – a name borrowed from another resistance-era organisation – Fretilin faces an uphill battle.

Despite his handsome electoral victory, Ramos Horta lacks a substantial political base. In the initial presidential round, he attracted fewer votes (22 per cent) than Lu Olo (28 per cent), and his support was concentrated in Dili.

The landslide result for Ramos Horta in the second round reflects the implicit endorsement of Gusmao and near unanimous anti-Fretilin sentiment among the six eliminated first-round candidates, five of whom endorsed Ramos Horta.

The result could be read as a deepening of democratic practice in Timor. With the loosening of Fretilin's grip, the way is open for a more vibrant, multi-party democracy. But visions of an unexpectedly sophisticated electorate are premature.

Voting patterns in the first presidential round pointed to worryingly entrenched regional and ethnic differences, in particular a deep cleavage between the country's east and west.

These are the same divisions that played out so disastrously in Timor's military forces in 2006, leading to the serious violence in the capital and to a flood of refugees, many of whom remain reluctant to return home.

Opposition groups and government factional figures in Timor too often have shown a willingness to exploit such tensions to further their ambitions. And the steady drift of unemployed young men to Dili provides a ready pool of the desperate and disenchanted.

It is doubtful Gusmao's untested CNRT will attract enough votes to rule in its own right although he could become prime minister through a coalition-style government. Fretilin should have a substantial minority of seats, and form an effective opposition.

The critical question is whether such a political coalition would stay united for very long.

The elections will decide the political future of former prime minister and Fretilin secretary-general Mari Alkatiri. The emergence of a younger generation of leaders will follow a poor result, and Alkatiri could struggle to maintain his relevance.

[Dr Phillip Winn is a political anthropologist and Timor observer at the Australian National University.]