Timor-Leste has many challenges to overcome to consolidate its democracy and develop its economy. Although the security situation in Timor-Leste is "strikingly improved" at present, observers remain concerned that plans to implement security reforms have yet to be accomplished. This concern stems from the mutiny by security forces in 2006. In June 2009, the last of the IDP camps was being closed. The parliament faces many challenges. Unemployment and underemployment is estimated to be as high as 70% in East Timor. The international community works closely with the East Timor Red Cross and other national and local organizations. United Nations Integrated Mission in Timor-Leste (UNMIT)

		The Mandate

On August 25, 2006, the U.N. Security Council established a new, expanded mission in East Timor for an initial period of six months under Resolution 1704 (2006) called the U.N. On February 26, 2009, the U.N. Security Council extended the mandate for another year until February 26, 2010, with Resolution 1867 (2009). In early January 2009 (covering the period from July 9, 2008, to January 20, 2009), the Secretary General's report focused on (1) political and security developments since 2008 and the need for increasing dialogue and reconciliation, improving democratic governance, maintaining public security, strengthening security institutions, and conducting a comprehensive review of the security sector; (2) promotion of human rights and administration of justice through the monitoring, promotion and protection of human rights, and increasing support for capacity building in the justice system; (3) increased socio-economic development and humanitarian assistance through support for the international compact for Timor-Leste, developing infrastructure and human resource capacity (such as poverty alleviation and achievement of the Millennium Development Goals, improving health indicators and implementation of the U.N. Development Assistance Framework 2009-2013) and ongoing humanitarian activities and implementation of the Government's National Recovery Strategy program to ensure durable solutions for IDPs; and (4) preparation of a medium-term strategy for East Timor through specific benchmarks. United States' relations with East Timor have been closely associated with U.S. relations with Indonesia and Jakarta's former control over East Timor. Indonesia has a population of some 230 million as compared to East Timor's one million. The treaty, which covered the joint development of hydrocarbon resources in the maritime area between Australia and the then Indonesian controlled area of East Timor, came into force in 1991 and was replaced by the Timor Sea Treaty between Australia and the newly independent state of Timor-Leste in 2003. (See " Energy Resources " section below for more information.) Portugal has provided Portuguese language teachers and established a cultural center in Dili. Indonesian military backed militias destroyed Timor's infrastructure and killed an estimated 1,300 additional Timorese in the wake of the 1999 referendum where Timorese voted for independence. On the other hand, at the time, the United States thought East Timor should reduce its reliance on direct assistance from the United Nations, though with continuing support from the international community in a number of important political and economic sectors, particularly in strengthening democratic institutions, infrastructure, economic development, and the training of security services.
The situation in the Democratic Republic of Timor-Leste, which is also known as simply Timor-Leste or East Timor, is relatively calm compared with recent periods of political strife and insurrection. That said, some underlying tensions, such as with the security sector, remain to be resolved. Timor-Leste faces many serious challenges as it seeks to establish a stable democracy and develop its economy. Prior to 2006 the international community's main concern focused on possible tensions in East Timor's relations with Indonesia. Since 2006 the main threat to East Timor has been internal strife resulting from weak, or collapsed, state institutions, rivalries among elites and between security forces, a poor economy, unemployment, east-west tensions within the country and population displacement. The reintroduction of peacekeeping troops and a United Nations mission, the flow of revenue from hydrocarbon resources in the Timor Sea, and improved political stability are helping East Timor move towards more effective and democratic government. East Timor has significant energy resources beneath the Timor Sea. A key issue is how this wealth will be conserved and spent in the years ahead.
With the assistance of a transitional United Nations administration, East Timor emerged in 2002 as an independent state after a long history of Portuguese colonialism and, more recently, Indonesian rule. This followed a U.N.-organized 1999 referendum in which the East Timorese overwhelmingly voted for independence and after which Indonesian-backed pro-integrationist militias went on a rampage, destroying much of East Timor's infrastructure and killing an estimated 1,300. Under several different mandates, the United Nations has provided peacekeeping, humanitarian and reconstruction assistance, and capacity building to establish a functioning government. On February 26, 2009, the U.N. Security council extended the mandate of U.N. Integrated Mission in Timor-Leste (UNMIT) for another year.
Many challenges remain, including the need for economic development and sustained support by the international community. Although the last of the Internally Displaced Persons (IDP) camps is being closed, IDPs face a number of issues, the resolution of which will be important to sustaining their return, including the need for basic assistance and services, the settlement of land disputes, and the reintegration in their original communities. Congressional concerns have focused on security and the role of the United Nations, human rights, and East Timor's boundary disputes with Australia and Indonesia.
A key challenge for East Timor will be to create enough political stability to focus on building state capacity and infrastructure with resources from the Timor Sea and prevent them from being squandered by corrupt practices.