March 23rd, 2018
Spotlight: A Groundbreaking Maritime Border Deal, What Does it all Mean for Timor-Leste?
Welcome to our new series titled Spotlight, which gives our readers a quick news update focusing on developments that affect the countries where HART works. This week, we’re taking a look at the Treaty signed between Australia and Timor-Leste concerning their maritime boundaries.
Australia and Timor-Leste have recently signed a treaty on their maritime borders, following almost 50 years of contention over the natural resources in the Timor Sea. These negotiations have been in the works since the 1970s and have faced several drawbacks after reluctance to negotiate and claims of Australian spying, marking a new era in their relationship. Although not a permanent settlement just yet, Timor-Leste are set to greatly benefit from this new boundary agreement.
The 2018 Treaty
The treaty addresses the division of the significant oil and gas reserves that remain undeveloped, by redrawing maritime boundaries of the Timor Sea. The agreement mainly deals with the lucrative Greater Sunrise basin that will now grant Timor-Leste access to up to $50bn from a 70 – 80% share of revenues. This is a significant shift from previous negotiations where Australia, arguing that the rich oilfield was situated on its continental shelf, asserted a majority share that initially gave Timor-Leste only 18-20% of revenues, and later a 50/50 split. This claim was a principle reason for delays in the conciliation process, as Timor-Leste maintained their rights over Greater Sunrise according to the 1982 UN Convention on the Law of the Sea (UNCLOS). This convention came into effect in 1994 and obliged party states to reach an agreement over competing economic zones.
What does this mean for Timor-Leste?
As existing oil and gas fields are rapidly running out, this treaty is coming at a crucial time. In a country that is repairing its economy after gaining independence less than 2 decades ago, access to billions of dollars’ worth of natural resources would secure its economic future. This is of great importance in one of the poorest countries in Asia, where (according to the World Food Programme (WFP)):
- 2% of children (50,124) up to 5 years old suffer chronic malnutrition
- stunting experienced among 53% of boys and 47% of girls
- 41% population live below the poverty line, consuming <2100 kcal per day, recommended for a normal healthy life
- ranked 133/188 countries in the 2016 Human Development Index
- 40% of the (1.2million) population lives on less than $0.55 per day
- 1/3 experience food insecurity
Gaining a significant boost to their economy, Timor-Leste can begin to make real strides in dealing with these concerns that are caused by little public investment, years of civil war, extreme poverty, poor quality and access to health services.
However, such necessary improvements to the quality of life of the Timorese people can only happen if revenues are used effectively. This is especially of concern in a country where only 2.4% of the national budget is spent on healthcare (the lowest in the world). There are already signs of progress with substantial advances to the healthcare budget as reported by the World Bank in 2017. Doubling the budget has meant a rise in the number of doctors employed by the State, from 20 per million people in 2002 to 900 in 2017, already increasing life expectancy from 48.5 years in 1990 to 67 years in 2014.
Let’s hope that the improved economic situation expected by this treaty will combat issues of poverty, unemployment, agricultural deficiencies, healthcare and education that will contribute to developing a more secure and stable Timor-Leste for future generations.
Read about the history of Timor-Leste in our blog: Indonesia and Timor-Leste: from Occupation to Cooperation
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