Micron Document
Timor-Leste (TLS)

Country Risk Assessment v2.3 - assessed 2026-05-28 - skew: negative


Flags

- Generated 2026-05-28 under v2.0: multilateral + independent (IMF, World Bank, UNICEF, UNEP, Freedom House, RSF, TI) + international press.

- Southeast Asia's democratic and press-freedom standout (RSF's highest-ranked ASEAN state, peaceful transfers, ASEAN's 11th member in Oct 2025), facing a hard fiscal cliff.

- Standout drags: near-total dependence on an unsustainable ~$18bn Petroleum Fund drawdown (possibly exhausted by the late 2030s, the salvation Greater Sunrise field stalled), full dollarization, and ~47% under-5 stunting despite oil wealth.

- civil_military_relations carries a v2.3 provisional baseline scored from coup history and military-in-politics status. It has not been through a full source-disciplined pass and its confidence is set low to reflect that.

Transparency & confidence ceiling

Tier: observable - every composite below is confidence-capped at 1.00 (TIER_CAP.observable).

Free press and open civil society - scores rest on directly observable evidence.


Economic

A dollarized economy on an unsustainable petroleum-fund drawdown with almost no non-oil base. (skew: negative)

┌────────────────────────────────┬────────┬──────┬──────┬──────┬──────┐
│ Sub-factor │ Weight │ Conf │ Near │ Mid │ Long │
├────────────────────────────────┼────────┼──────┼──────┼──────┼──────┤
│ Fiscal State │ 0.22 │ 85% │ -8.0 │ -8.0 │ -8.0 │
│ Monetary Independence │ 0.22 │ 90% │ -3.0 │ -3.0 │ -3.0 │
│ Reserve Currency Intl Monetary │ 0.16 │ 95% │ 0.0 │ 0.0 │ 0.0 │
│ Inflation │ 0.13 │ 75% │ +3.0 │ +3.0 │ +3.0 │
│ Banking Stability │ 0.10 │ 55% │ -2.0 │ -2.0 │ -2.0 │
│ Trade Actions Capacity │ 0.17 │ 80% │ -7.0 │ -7.0 │ -7.0 │
└────────────────────────────────┴────────┴──────┴──────┴──────┴──────┘

Fiscal State - Near-total reliance on an unsustainable Petroleum Fund drawdown (>2x the sustainable rate) facing depletion by the late 2030s, with minimal non-oil revenue. (IMF 2025; World Bank)

Monetary Independence - Fully dollarized (uses the US dollar); zero domestic monetary policy. (IMF)

Reserve Currency Intl Monetary - Uses the USD but issues no reserve currency of its own; note the ~$18bn (depleting) sovereign Petroleum Fund. (definitional; IMF)

Inflation - Very low (~1% in 2025), suppressed by dollarization. (IMF 2025; World Bank)

Banking Stability - A small, largely foreign-bank-dominated, shallow system with limited credit and capacity. (World Bank)

Trade Actions Capacity - Almost no non-oil exports (some coffee) - a tiny, undiversified, import-dependent economy. (World Bank; State Dept 2025)

Category composite by horizon (categoryComposite, confidence-capped by transparency tier):

┌─────────┬─────────────────┬────────────┐
│ Horizon │ Composite score │ Confidence │
├─────────┼─────────────────┼────────────┤
│ near │ -3.46 │ 83% │
│ mid │ -3.46 │ 83% │
│ long │ -3.46 │ 83% │
└─────────┴─────────────────┴────────────┘

Institutional

A functioning but fragile, capacity-deficient state with a strong-but-slipping press. (skew: negative)

┌──────────────────────────┬────────┬──────┬──────┬──────┬──────┐
│ Sub-factor │ Weight │ Conf │ Near │ Mid │ Long │
├──────────────────────────┼────────┼──────┼──────┼──────┼──────┤
│ Rule Of Law │ 0.31 │ 65% │ -2.0 │ -2.0 │ -2.0 │
│ Statistical Integrity │ 0.22 │ 55% │ -1.0 │ -1.0 │ -1.0 │
│ Civil Service Capacity │ 0.22 │ 70% │ -4.0 │ -4.0 │ -4.0 │
│ Press Freedom │ 0.13 │ 75% │ +4.0 │ +4.0 │ +4.0 │
│ Civil-Military Relations │ 0.12 │ 45% │ -1.0 │ -1.0 │ -1.0 │
└──────────────────────────┴────────┴──────┴──────┴──────┴──────┘

Rule Of Law - Functioning but fragile - CPI 2024 score 44 (a top-decade improver) yet courts face severe capacity deficits and due-process gaps. (TI CPI 2024; Freedom House 2025)

Statistical Integrity - Reasonable national accounts/CPI with donor support, but limited capacity. (INETL; World Bank)

Civil Service Capacity - Serious capacity deficits and oil-funded patronage employment undermining efficiency. (World Bank; Freedom House 2025)

Press Freedom - RSF 2025: 39th globally, ASEAN's highest and the region's only 'satisfactory' rating, though it fell 19 spots amid criminal-defamation cases. (RSF 2025)

Civil-Military Relations - Civilian control is formally intact with recurring friction, thin oversight capacity, or a partly politicized senior appointment process.

Category composite by horizon (categoryComposite, confidence-capped by transparency tier):

┌─────────┬─────────────────┬────────────┐
│ Horizon │ Composite score │ Confidence │
├─────────┼─────────────────┼────────────┤
│ near │ -1.27 │ 63% │
│ mid │ -1.27 │ 63% │
│ long │ -1.27 │ 63% │
└─────────┴─────────────────┴────────────┘

Political & Social

A free, personality-driven democracy with succession risk, over high poverty and youth unemployment. (skew: negative)

┌────────────────────────┬────────┬──────┬──────┬──────┬──────┐
│ Sub-factor │ Weight │ Conf │ Near │ Mid │ Long │
├────────────────────────┼────────┼──────┼──────┼──────┼──────┤
│ Political Stability │ 0.30 │ 70% │ +2.0 │ +2.0 │ +2.0 │
│ Civil Liberties │ 0.20 │ 75% │ +4.0 │ +4.0 │ +4.0 │
│ Treatment Non Citizens │ 0.25 │ 55% │ 0.0 │ 0.0 │ 0.0 │
│ Social Cohesion │ 0.15 │ 60% │ -1.0 │ -1.0 │ -1.0 │
│ Demographics │ 0.10 │ 70% │ -2.0 │ -2.0 │ -2.0 │
└────────────────────────┴────────┴──────┴──────┴──────┴──────┘

Political Stability - A functioning democracy with peaceful transfers, but highly personality-driven (Gusmao/Ramos-Horta) with succession/generational-transition risk. (Freedom House 2025; Lowy)

Civil Liberties - Broadly respected - one of the freest environments in Southeast Asia, with isolated detentions. (Freedom House 2025; CIVICUS)

Treatment Non Citizens - Not a major migration destination; no large-scale mistreatment reported. (inference)

Social Cohesion - A largely cohesive post-conflict society, but youthful (two-thirds under 30) with high unemployment and a martial-arts-gang/faction-violence history. (Lowy; CIVICUS)

Demographics - Very young and fast-growing - a potential dividend but currently a jobs/services burden amid high poverty and stunting. (World Bank)

Category composite by horizon (categoryComposite, confidence-capped by transparency tier):

┌─────────┬─────────────────┬────────────┐
│ Horizon │ Composite score │ Confidence │
├─────────┼─────────────────┼────────────┤
│ near │ +1.20 │ 66% │
│ mid │ +1.20 │ 66% │
│ long │ +1.20 │ 66% │
└─────────┴─────────────────┴────────────┘

Geopolitical

A new ASEAN member with broad partners, conflict-free, with the Greater Sunrise dispute the main friction. (skew: symmetric)

┌────────────────────────────┬────────┬──────┬──────┬──────┬──────┐
│ Sub-factor │ Weight │ Conf │ Near │ Mid │ Long │
├────────────────────────────┼────────┼──────┼──────┼──────┼──────┤
│ Alliance Reliability │ 0.40 │ 65% │ +2.0 │ +2.0 │ +2.0 │
│ Conflict Involvement │ 0.35 │ 70% │ +2.0 │ +2.0 │ +2.0 │
│ Sanctions Capital Controls │ 0.25 │ 70% │ +2.0 │ +2.0 │ +2.0 │
└────────────────────────────┴────────┴──────┴──────┴──────┴──────┘

Alliance Reliability - A new ASEAN member (Oct 2025) with strong ties to Australia/Portugal/UN partners while engaging China - pragmatic and non-aligned. (Al Jazeera; Diplomat 2025)

Conflict Involvement - No active conflict; the main external friction is the (commercial/legal) Greater Sunrise pipeline dispute with Australia. (Stratsea)

Sanctions Capital Controls - An open, dollarized, unsanctioned economy with free capital movement. (IMF)

Category composite by horizon (categoryComposite, confidence-capped by transparency tier):

┌─────────┬─────────────────┬────────────┐
│ Horizon │ Composite score │ Confidence │
├─────────┼─────────────────┼────────────┤
│ near │ +2.0 │ 68% │
│ mid │ +2.0 │ 68% │
│ long │ +2.0 │ 68% │
└─────────┴─────────────────┴────────────┘

Physical & Practical

Weak healthcare with extreme child stunting, poor infrastructure, and natural-hazard exposure. (skew: negative)

┌────────────────────┬────────┬──────┬──────┬───────┬──────┐
│ Sub-factor │ Weight │ Conf │ Near │ Mid │ Long │
├────────────────────┼────────┼──────┼──────┼───────┼──────┤
│ Climate │ 0.20 │ 72% │ -5.0 │ -5.50 │ -6.0 │
│ Healthcare │ 0.30 │ 80% │ -6.0 │ -6.0 │ -6.0 │
│ Infrastructure │ 0.20 │ 70% │ -5.0 │ -5.0 │ -5.0 │
│ Crime Safety │ 0.15 │ 60% │ -2.0 │ -2.0 │ -2.0 │
│ Disaster Insurance │ 0.15 │ 60% │ -8.0 │ -8.0 │ -8.0 │
└────────────────────┴────────┴──────┴──────┴───────┴──────┘

Climate - High vulnerability, very low readiness - rainfall variability, food insecurity, coastal/landslide on a poor half-island. (ND-GAIN; IPCC AR6)

Healthcare - A weak system - ~47% under-5 stunting, high child mortality and malnutrition despite oil wealth. (UNICEF; World Bank)

Infrastructure - Poor roads, electricity, and water outside Dili, with large oil-funded projects of contested value. (World Bank; State Dept 2025)

Crime Safety - Generally low-level crime but periodic political/gang unrest and weak policing capacity. (Freedom House 2025; CIVICUS)

Disaster Insurance - Negligible catastrophe-insurance penetration against meaningful natural-hazard exposure. (inference)

Category composite by horizon (categoryComposite, confidence-capped by transparency tier):

┌─────────┬─────────────────┬────────────┐
│ Horizon │ Composite score │ Confidence │
├─────────┼─────────────────┼────────────┤
│ near │ -5.34 │ 70% │
│ mid │ -5.44 │ 70% │
│ long │ -5.55 │ 70% │
└─────────┴─────────────────┴────────────┘

Decisions

Confidence-weighted composite of every category above (decisionComposite), at each decision's native horizon (HORIZON_BY_DECISION), with the threshold reading (readingFor).

┌──────────┬─────────┬───────┬────────────┬─────────┐
│ Decision │ Horizon │ Score │ Confidence │ Reading │
├──────────┼─────────┼───────┼────────────┼─────────┤
│ Living │ long │ -1.45 │ 68% │ mixed
│ Assets │ mid │ -1.99 │ 73% │ mixed
│ Currency │ near │ -2.16 │ 76% │ mixed
└──────────┴─────────┴───────┴────────────┴─────────┘

Same weighting projected across all three horizons (near 1-3y, mid 3-7y, long 5-10y):

┌──────────┬───────┬───────┬───────┐
│ Decision │ Near │ Mid │ Long │
├──────────┼───────┼───────┼───────┤
│ Living │ -1.42 │ -1.44 │ -1.45 │
│ Assets │ -1.98 │ -1.99 │ -2.0 │
│ Currency │ -2.16 │ -2.16 │ -2.16 │
└──────────┴───────┴───────┴───────┘