Timor-Leste: Joining ASEAN, Starting with the Neighboring House
The bustling port of Kupang in Indonesia's West Timor might initially give the impression of a gateway to a much larger place. However, a closer look reveals that this gleaming modern edifice is more of a symbol of potential than an active hub. It remains largely empty, with its new electronic ticket gates rarely used in favor of human inspectors. The open area could be a bustling food court, but instead, women sell fruit and packed lunchboxes to travelers from straw mats. Local fishing boats come and go, and a few passenger ferries pass through each day, heading to nearby Indonesian islands or occasionally further afield to Bali and Surabaya.
Interestingly, one place you cannot travel by ferry from Kupang is the neighboring country of Timor-Leste, despite it being just a couple of hours' travel by fast boat along the coast. West Timor (part of Indonesia) and East Timor (the independent country known as Timor-Leste) occupy two halves of an island smaller than Taiwan, with their respective largest cities, Kupang and Dili, being less than 300 kilometers apart. However, traveling between the two requires either an all-day drive or flying via Darwin or Bali, which are both spectacularly out-of-the-way (and expensive) detours. Even getting between the national capitals of Dili and Jakarta requires a stopover.
The proximity of Indonesia and Timor-Leste, yet their disconnection, reflects a complex history of colonization and occupation. Last week marked Timor-Leste's long-awaited accession to the Association of Southeast Asian Nations (ASEAN), a regional cooperation body comprising 11 nations. Joining ASEAN has been a top foreign policy ambition for Timor-Leste, supported by its neighbors, including Indonesia and Australia. Amid the excitement of accession, Myanmar has passed Timor-Leste the unwelcome torch of being ASEAN's poorest country.
While ASEAN is an imperfect institution, it has proven to be a durable mainstay of regional security architecture. Critically, ASEAN represents a vast market of approximately $4 trillion and 700 million consumers, comprising ten mostly booming economies, to which Timor-Leste now gains preferential access.
The benefits of joining ASEAN are enticing at first glance, but closer inspection reveals a more nuanced picture. Timor-Leste is working hard to diversify and grow its small economy, and its trade flows suggest significant room for improvement with ASEAN. Only Singapore and Indonesia are among Timor's top ten export markets, and over 95% of exports to Singapore (and other top customers China and Japan) are petroleum products alone. Exports to Indonesia are small (at 5% of the total) but more diversified, offering a model for Timor-Leste to scale and replicate with other ASEAN members, including through exporting high-value agricultural commodities such as coffee, vanilla, and cloves.
The trade payoffs for Timor-Leste could be excellent if they ever materialize. Despite lofty ambitions, ASEAN is far from a European Union-style trading bloc, and the group remains essentially 11 separate markets. Realistically, Timor-Leste stands to gain the most in the short term from better integrating its trade with Indonesia, particularly boosting its meager exports, as the most geographically and economically logical gateway into the rest of the region.
One straightforward solution with enormous potential is to improve physical connections between the two countries. Beyond the mostly one-directional trade in goods, there are opportunities for workers, students, and tourists to flow more efficiently between Indonesia and Timor-Leste. Valuable developments would include starting direct flights from Dili to Kupang and to Jakarta (initially government-subsidized if necessary); adding Dili as a stop on eastern Indonesian goods and passenger ferry routes; and establishing immigration offices at eastern Indonesian ports to facilitate better cross-border travel and pave the way for greater trade flows. Indonesia could unilaterally implement most of these improvements without significant effort.
These improvements would represent a small investment that would go a long way in bringing Timor-Leste into the neighborhood and bolstering Indonesia's credentials as a leader within ASEAN. Timor-Leste faces a long road ahead as it seeks to integrate itself into ASEAN and make the most of its membership, including the practical challenge of participating in (or at least prioritizing) the group's prolific meeting calendar. It is a significant moment, and perhaps not the golden ticket of economic opportunity some in Timor-Leste are hoping for. However, Indonesia stepping up to help shepherd its small neighbor and laying the groundwork for better economic ties through physical connectivity will make the fruits of ASEAN for Timor-Leste all the sweeter. The under-utilized port in Kupang might not be the be-all, end-all of bringing Timor-Leste into the ASEAN fold, but it's certainly a good starting point.
