Jimmy Ellingham – South of Dili, East Timor's hot, dry and dusty capital, a narrow pot-holed road snakes its way over the hills.

It clings to the sides of gullies and groans under the strain of four-wheel-drives and buses so full of people that some have to cling to the outside. Their luggage and even the odd live goat somehow stay tied to the top as they make their way across the Southeast Asian nation.

A trip to Madabeno, about 50 kilometres from Dili, takes a couple of hours on this road. It's cooler in the hills and it's like taking a step back in time. Homes are simple and, although new power pylons hang overhead, the electricity hasn't yet been turned on.

A high proportion of the area's 1665 people are young, but unlike in Dili, where there is more development, including a shopping mall, the locals haven't been living among United Nations peacekeepers and foreign forces.

After an on-and-off presence dating back to 1999, foreign forces are leaving East Timor, and its internal security is being left to the Timorese.

By the end of the year, police acting as UN peacekeepers will be gone. New Zealand's last rotation of 80 troops arrived home in Christchurch last week.

Timorese and the departing leaders seem confident that the country will be fine, that it has broken free of its troubled past.

The police force, which disintegrated in 2006, is now back together, while the military has even reached the stage where its members can go on UN missions overseas.

"It will be good so we can stand alone and serve our country," says the chief of Madabeno, Francisco Rodrigues Pereira. "I believe that, with the training we've already got, they can serve this country peacefully."

Further up the road, at Bandudato, the village chief, Mario Viera da Costa, says the 2006 trouble did not reach his area. But the flow-on effects did, as people left the city to seek refuge or return to their districts.

That year wasn't a good one for East Timor, as Dili was swept up in a wave of violence. Rogue elements of the military revolted, the police force collapsed and the city was on fire.

New Zealand troops arrived to restore order, some running straight off a Hercules aircraft in full combat gear. Fearful for their safety, New Zealand embassy staff locked the gates of their beachfront property and hid inside.

Kiwi police followed to act as peacekeepers. Some are still posted to the country as part of the UN mission that ends on December 31. "I arrived to find that the rule of law had broken down in Timor," Superintendent John Spence recalls.

New Zealand, Australian, Portuguese and Malaysian police filled the breach. Since then about 300 New Zealand officers have served there. "There were armed gangs wandering the streets of Dili. There was rebellion," Spence says.

For Timorese forced to flee from their homes, there were primitive refugee camps, which were "hotbeds of trouble".

"There were no police officers around, so villagers used to throw rocks at the IDP (internally displaced persons) camps and the camps would throw rocks back." The last of these camps was dissolved two years ago, as East Timor has transformed, but in 2006 and into the next year, instability was rife.

Lance Corporal Stu Triggs says in Dili and in the countryside, patrols would have to take arms off people – machetes, slingshots, guns and even poisoned darts.

When the first New Zealand troops arrived 13 years ago, the former Portuguese colony had voted overwhelmingly for independence from Indonesia, which invaded it in 1975.

A wave of violence then swept though the country as pro-Indonesia militia, backed by that country's military, couldn't accept the result.

Horrendous crimes were committed, including a massacre in the southwestern city of Suai, where about 200 people were murdered as they sought shelter in a church.

And in 2000, Private Leonard Manning became New Zealand's first soldier to die since the Vietnam War when he was killed by jungle militia near the Indonesian border.

The situation calmed down again in the early part of the last decade, as independence was achieved in 2002 and foreign troops went home.

This year, East Timor held largely trouble-free presidential and parliamentary elections and it is felt the country can now handle its own internal security, so the stabilisation force and UN police are going home.

Since 2006, 13 rotations of New Zealand soldiers have travelled there on six-month tours of duty, costing about $100 million.

They leave behind only a small team to clean up, and five advisers working with the East Timorese military.

Similarly, while the New Zealand police have finished peacekeeping duties, senior officers will stay on for four years to advise on community policing.

The New Zealanders who just left stayed at a camp known as "Kiwilines", a well-established site on the southwest of Dili. Six years ago makeshift camps were slung up wherever they could find spare land – a world away from life back in New Zealand.

Now one of the old camps is a deserted and crumbling building on the waterfront, home to a few families, chickens and some men selling art.

Their living quarters is a small square tin room, with no air-conditioning and no comforts of home. But there is still peace, something that seemed a world away at the turn of the millenium.

Major Tim Tuatini, the officer in charge of the final rotation of Kiwi soldiers, was first in East Timor in 2001. Like many who have come back, he says the country has changed immensely.

"It's just the small things. There are a lot of children. There are a lot of scooters now, yellow taxis, vehicles moving up and down. It's the hustle and bustle I'd expect from any Asian city," he says. "When I was here last time, if you saw an SUV or large vehicle moving around, it was normally an international who was driving it. Now, you have Timorese driving them."

This isn't typical in a poor country, where many of the 1.1 million people are subsistence farmers who live in areas devoid of contact with the outside world.

A lack of jobs could be the spark that sets Dili off, says United States doctor Dan Murphy, who runs a stretched and busy medical clinic in the city. He is "sceptical" about the withdrawal of foreign troops and police, saying the situation could turn bad again.

"People still aren't that professional. There's still a lot of self-interest. There are still a lot of problems from the past."

During the past couple of weeks, Murphy has noticed gangs roaming the streets at night and the odd shotgun sound.

"It doesn't take much to start something," he warns. "The whole thing could go down the drain again. Most people have no job and they don't have much to do. They're sitting around and they've got all this testosterone pumping through their veins."

Dili is a city of about 200,000 people and it's growing quickly. There, the New Zealand military has remained, under the banner of the Australian-led International Stabilisation Force that officially ended its mandate on October 31.

It seems the Kiwi soldiers have left a good impression with the Timorese. As a group of them have dinner at a restaurant in Dili, a boy passing by says "Kia ora, bro". Others put it more simply: "Kiwi, good".

While East Timor may be more stable, it is not trouble-free. Poverty and disease are rampant, unemployment is high and basic nutrition is lacking.

New Zealand Ambassador to Dili, Tony Fautua, has talked of moving the two countries' relationship away from one of enforcement towards trade, education and development. He hopes future delegations to East Timor will be from businesses, rather than the military or police.