Succession and other looming challenges for Timor-Leste

Twenty-five years after a landmark vote for independence, it faces a generational handover in leadership, old social conflicts and a potential fiscal crisis.

- Joseph Rachman

On Aug 30, Timor-Leste will commemorate the 25th anniversary of the UN-sponsored referendum which secured its independence after more than 400 years as a Portuguese colony and almost a quarter of a century under Indonesian occupation.

Shortly after Portugal abandoned the territory in 1975, Indonesia invaded what was then called East Timor. The "New Order" government of president Suharto in Jakarta - and its backers in America and Australia - feared the new state could become a communist base in the region. Prior to the invasion, the left-wing Fretilin party had come out on top of a civil war in East Timor.

Almost 50 years after that ugly civil conflict and 25 years of brutal occupation, Timor's situation has uncontestably improved. However, the three issues that framed the invasion in 1975 leadership, economic stability and geopolitics - are regaining salience.

When it comes to leadership, the three figures currently dominating Timor's politics President Jose Ramos-Horta, Prime Minister Xanana Gusmao and leader of the opposition Mari Alkatiri - were all active political players in 1975 as members of Fretilin. They spent decades struggling for independence, either from the forest or abroad.

Fifty years on, these leaders seem determined to avoid repeating the mistakes that left the country divided and opened the way for invasion. The - surely difficult – decision post-1999 to pursue reconciliation not just with Indonesia but also with Timorese who supported Indonesia helped stabilise the country. And, while tensions between these men have sometimes come dangerously close to causing disaster, they have also compromised at key moments.

However, there is no escaping the awkward fact that a country where the median age is about 20 is led by men in their 70s who seem reluctant to leave power.