DILI - A year after East Timor officially joined the Association of Southeast Asian Nations, President Jose Ramos-Horta said on Monday he has seen economic progress, with major investments flowing into Asia's youngest country.
"Maybe because of joining ASEAN," investor confidence in the country has increased, Ramos-Horta said in an interview with Kyodo News at the presidential palace in Dili. The country of 1.4 million people became the 11th member of ASEAN on Oct. 26, 2025.
While it agreed to strengthen cooperation with China in 2024, including holding joint military drills, the Nobel Peace Prize winner suggested that the exercises should be multilateral. Joining bilateral drills would be "a bit like a mosquito having joined the exercise with an elephant," he said.
"If it's China, U.S., the Philippines, Indonesia (in an exercise), we join," he said, indicating a stance different from neighboring Indonesia, which held joint naval exercises with China east of Taiwan earlier this year.
A number of investment projects are underway in East Timor, including a joint investment by Japanese trading house Itochu Corp. and a French firm to construct a solar power plant. Hiroshima-based Tsuneishi Shipbuilding Co., meanwhile, is seeking to build a shipyard.
Such projects are expected to boost the local economy and create thousands of jobs for young workers as the country seeks to curb dependence on oil and gas and diversify its economy.
Ramos-Horta welcomed the move, saying, "It is important for Timor-Leste, not only for job creation, but it also enhances our cooperation with Japan."
He said his country is amending its investment law to give foreign investors a tax exemption for up to 50 years. The draft bill was approved by a council of ministers and sent to parliament for approval, he said.
"I believe it will be received unanimously by the parliament within less than a month, then it will be effective as a law," Ramos-Horta said.
He also said on a smaller scale, more Indonesian firms have come to invest in seaweed, lobsters, crabs and pearls, in addition to their plan to build five-star hotels ahead of 2029, when East Timor is scheduled to host the ASEAN meeting.
While Chinese companies will build a new convention center in Dili's waterfront area, Indonesian companies are also working to expand the current airport, he said.
The capital has seen various development projects after becoming an ASEAN member, including road widening that required the relocation of hundreds of houses and buildings, waterfront area revitalization and some high-rise building construction.
East Timor's accession to ASEAN last year followed a 14-year wait and diplomatic efforts by Ramos-Horta and Prime Minister Xanana Gusmao, among others.
East Timor was a Portuguese colony for around 400 years before it was annexed by Indonesia in 1975. It gained internationally recognized independence in 2002, following a U.N.-sponsored referendum in 1999 to separate from Indonesia.
