by Sebastien GOULARD
While the world’s attention was fixed on President Donald Trump’s presence at the latest ASEAN Summit in Kuala Lumpur from 26 to 28 October 2025, Timor-Leste became a full member of the Association of Southeast Asian Nations. In a deeply moving speech, Prime Minister Xanana Gusmão reflected on the long journey his country had undertaken to join the regional organisation—from its application in 2011 to observer status obtained in 2022, leading to full membership today. Over fourteen years, Timor-Leste reformed its institutions and followed the roadmap established by ASEAN members in 2022.
A Long-Delayed Accession
Challenges nevertheless remain for Timor-Leste, which is now the smallest economy in the regional bloc. In 2025, its GDP reached only USD 2.13 billion, far below Laos’s USD 16 billion, despite Laos being the second smallest economy in ASEAN. Timor-Leste is the poorest ASEAN member, along with Myanmar, currently engulfed in civil war. This economic gap long delayed the country’s entry into ASEAN. While some member states, such as the Philippines, consistently supported Timor-Leste’s candidacy, others—notably Singapore—opposed it for many years due to the low level of development of the former Portuguese colony.
Political instability since Timor-Leste’s independence in 2002 also hindered its integration into the regional organisation. Nearly twenty years ago, in 2006, the country experienced a major political crisis that required international intervention. It was not until 2012 that Timor-Leste achieved stability and began a process of reconstruction and reconciliation. Relations with its neighbour Indonesia improved, and Jakarta supported its candidacy. But for Singapore, Timor-Leste’s accession added yet another complexity to ASEAN, already struggling with Myanmar’s civil war since 2021.
Two arguments ultimately overcame Singapore’s and other sceptics’ reluctance. First, the new country needs stability, and leaving it outside the regional bloc risks renewed unrest and the possibility that it could become a base for criminal activities, including cybercrime. Remaining outside ASEAN could also push Timor-Leste to seek closer ties with other powers interested in its strategic location. In the past, Dili and Beijing developed close relations: China built infrastructure in the country and signed several cooperation agreements, including in the military field. Following the signing of a security pact between China and the Solomon Islands in 2022, several states—notably Australia—feared Beijing and Dili could conclude a similar agreement that would allow the establishment of a Chinese military base in Timor-Leste. Timorese authorities denied this, but the issue resurfaces regularly, reflecting the strong interest of external powers, particularly China and Australia, in Timor-Leste. Integrating the country into ASEAN would reinforce its regional anchoring and reduce its exposure to outside influence.
Toward a More Diversified Timorese Economy
Timor-Leste’s economy suffers from a heavy dependence on hydrocarbons: nearly 80% of its GDP comes from the sector. While oil extraction has enabled the construction of infrastructure, particularly in transport and energy, hydrocarbons dominate the economy and make the country dependent on finite resources.
Moreover, the question of exploiting gas reserves in the Timor Sea continues to strain relations between Dili and Canberra, as the two countries dispute their maritime boundaries. Today, gas extracted from Timorese reserves is transported to Australia due to insufficient infrastructure in Timor-Leste, despite existing plans for pipelines and refineries. However, even a modernised hydrocarbons sector cannot provide employment for the entire Timorese population.
Thanks to hydrocarbons, Timor-Leste benefits from a sovereign wealth fund to support its economy, but according to the International Monetary Fund, this wealth must be spent more efficiently and more gradually. This requires greater investment in education and training, support for the private sector, and agrarian reform to develop a more competitive agricultural sector.
Faced with the challenge of diversification, cooperation opportunities exist between Timor-Leste and other ASEAN members.
Strengthening Governance
The prospect of joining ASEAN has also encouraged Dili to transform its institutions and build the capacity of its leaders and administration (for instance, by improving the English proficiency of civil servants to facilitate cooperation with other ASEAN members). A culture of evaluation—through audits of public policies—has been promoted throughout the Timorese administration. These reforms aim to reassure foreign investors, especially those from Southeast Asia, regarding the ability of Timor-Leste’s authorities to protect their interests and uphold the rule of law.
The Need to Reform ASEAN
After Timor-Leste, another state—Papua New Guinea, which currently has observer status—also wishes to join the regional organisation. Port Moresby has obtained Jakarta’s support. Like Timor-Leste, Papua New Guinea will have to strengthen its institutions and ensure the security of foreign investors.
With the enlargement to Timor-Leste—and possibly soon to Papua New Guinea—ASEAN must modernise. According to Article 21 of the ASEAN Charter, the organisation functions on a consensus basis, which allows significant flexibility and “à la carte” commitments. Today, voices within ASEAN are calling for deeper integration: Singapore’s Prime Minister Lawrence Wong has urged reducing barriers to investment and trade and creating new infrastructure among member states.
However, the organisation continues to struggle with security issues. Its response to the civil war in Myanmar and the junta’s brutality has been relatively muted. In October, ASEAN members reaffirmed the Five-Point Consensus (cessation of violence, resumption of dialogue, appointment of a special envoy, authorisation of humanitarian aid, and access for the envoy to all parties), but ASEAN’s room for manoeuvre remains limited. Similarly, on tensions between Thailand and Cambodia, ASEAN must go beyond declarations and equip itself with the means to act and enforce its decisions, for the credibility of the organisation, which must also contend with the influence of external actors amid Sino-American competition.
Timor-Leste’s integration into ASEAN could become an opportunity for the regional organisation to reform itself and assume a role commensurate with its ambitions on the international stage.
