Introduction:
The Portuguese began to trade with the island of Timor in the early 16th century and colonized it in mid-century. Skirmishing with the Dutch in the region eventually resulted in an 1859 treaty in which Portugal ceded the western portion of the island. Imperial Japan occupied East Timor from 1942 to 1945, but Portugal resumed colonial authority after the Japanese defeat in World War II. East Timor declared itself independent from Portugal on 28 November 1975 and was invaded and occupied by Indonesian forces nine days later. It was incorporated into Indonesia in July 1976 as the province of East Timor. An unsuccessful campaign of pacification followed over the next two decades, during which an estimated 100,000 to 250,000 individuals lost their lives. On 30 August 1999, in a UN-supervised popular referendum, an overwhelming majority of the people of East Timor voted for independence from Indonesia. Between the referendum and the arrival of a multinational peacekeeping force in late September 1999, anti-independence Timorese militias - organized and supported by the Indonesian military - commenced a large-scale, scorched-earth campaign of retribution. The militias killed approximately 1,400 Timorese and forcibly pushed 300,000 people into West Timor as refugees. The majority of the country's infrastructure, including homes, irrigation systems, water supply systems, and schools, and nearly 100% of the country's electrical grid were destroyed. On 20 September 1999 the Australian-led peacekeeping troops of the International Force for East Timor (INTERFET) deployed to the country and brought the violence to an end. On 20 May 2002, East Timor was internationally recognized as an independent state. In March of 2006, a military strike led to violence and a near breakdown of law and order. Over 2,000 Australian, New Zealand, and Portuguese police and peacekeepers deployed to East Timor in late May. Although many of the peacekeepers were replaced by UN police officers, 850 Australian soldiers remained as of 1 January 2007.

Location: Southeastern Asia, northwest of Australia in the Lesser Sunda Islands at the eastern end of the Indonesian archipelago; note - East Timor includes the eastern half of the island of Timor, the Oecussi (Ambeno) region on the northwest portion of the island of Timor, and the islands of Pulau Atauro and Pulau Jaco

Population: 1,084,971
note: other estimates range as low as 800,000 (July 2007 est.)

Languages: Tetum (official), Portuguese (official), Indonesian, English
note: there are about 16 indigenous languages; Tetum, Galole, Mambae, and Kemak are spoken by significant numbers of people

Country name: conventional long form: Democratic Republic of Timor-Leste
conventional short form: East Timor
local long form: Republika Demokratika Timor Lorosa'e [Tetum]; Republica Democratica de Timor-Leste [Portuguese]
local short form: Timor Lorosa'e [Tetum]; Timor-Leste [Portuguese]
former: Portuguese Timor

Capital: name: Dili
geographic coordinates: 8 35 S, 125 36 E
time difference: UTC+9 (14 hours ahead of Washington, DC during Standard Time)

Economy - overview:
In late 1999, about 70% of the economic infrastructure of East Timor was laid waste by Indonesian troops and anti-independence militias, and 300,000 people fled westward. Over the next three years, however, a massive international program, manned by 5,000 peacekeepers (8,000 at peak) and 1,300 police officers, led to substantial reconstruction in both urban and rural areas. By the end of 2005, all refugees either returned or resettled in Indonesia. The country faces great challenges in continuing the rebuilding of infrastructure, strengthening the infant civil administration, and generating jobs for young people entering the work force. The development of oil and gas resources in nearby waters has begun to supplement government revenues ahead of schedule and above expectations - the result of high petroleum prices - but the technology-intensive industry does little to create jobs for the unemployed, because there are no production facilities in Timor and the gas is piped to Australia. The parliament in June 2005 unanimously approved the creation of a Petroleum Fund to serve as a repository for all petroleum revenues and preserve the value of East Timor's petroleum wealth for future generations. The mid-2006 outbreak of violence and civil unrest disrupted both private and public sector economic activity. Real non-oil GDP growth in 2006 is estimated to have been negative. The underlying economic policy challenge the country faces remains how best to use oil-and-gas wealth to lift the non-oil economy onto a higher growth path and reduce poverty.