East Timor - Economy

As a result of the post-independence referendum violence in 1999 led by Indonesian troops and anti-independence militias, approximately 70% of the economic infrastructure was devastated, and some 250,000 people moved into West Timor. Reconstruction efforts undertaken by UNTAET improved both urban and rural areas. Agriculture remains the main source of income in most of the country's villages, with only a small percentage of people selling a significant proportion of their rice or maize harvest. During 2000 and 2001, the agriculture sector expanded, due to a rebuilding of seed stocks and irrigation systems, improved access to fertilizer and transportation, a reduced threat of violence, and high demand resulting from the large international presence in the country. The services sector also registered strong growth in 2000–01 in order to meet the needs of the international staff and reconstruction efforts. Since mid-2002, however, growth moderated, as a result of the winding-down of the international presence. During the Indonesian occupation, tourism was not a large industry, but there is a great potential growth in this area. The East Timorese economy stands to benefit in the long term from the development of the oil- and gas-rich seabed of the Timor Sea.