[Note: This is the free preview within the dedicated podcast section of the ASEAN Wonk website, with the full version in a post published on January 30, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].
INTRODUCTION
ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, where we bring you expert insights and regional perspectives on Southeast Asia and Indo-Pacific geopolitics and geoeconomics. I'm your host, Dr. Prashanth Parameswaran. If you haven't already, do subscribe to the ASEAN Wonk platform at www.aseanwonk.com so you don't miss all our posts.
Our guest today is Fidelis Magalhaes, who is a former minister of the presidency of the Council of Ministers in East Timor, and he has nearly two decades of policy and government experience. We start our conversation talking about the country's pursuit of full ASEAN membership and its development trajectory. Make sure you tune into the full episode as we go through a range of other subjects, including major power involvement and future geopolitical and geoeconomic prospects.
Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!
FULL ASEAN MEMBERSHIP PURSUIT
ASEAN Wonk: So welcome to the ASEAN Wonk Podcast Fidelis: thank you for joining us and let's get started. I wanted to talk more specifically about Timor as a country because as we were talking just before we came on live, it is a country that often doesn't get the attention that it deserves within Southeast Asia. I did want to start with Timor's pursuit of full ASEAN membership. It is the country that is in Southeast Asia but remains out of ASEAN in terms of full ASEAN membership as of now. But that's changing with ASEAN already agreeing to Timor joining the institution as a full member. That's still in a process of being underway. I recall President Jose Ramos-Horta once referring to ASEAN as being more difficult to get into than heaven. But that being said, Timor has undergone a lot of steps that are necessary for full ASEAN membership and this is a very complex process. The steps are not just taken by Dili itself, but also other ASEAN countries in terms of areas like diplomatic infrastructure – those aspects are still being worked out and progressing. There are a lot of headlines periodically that focus on ASEAN membership about it as an institution, but you as a former policymaker have a sense of the significance of what this means for actual policy and for Timor's foreign policy and geopolitical and geoeconomic landscape. Could you help explain the policy significance of Timor's admission to ASEAN and why does it matter from a historical and contemporary perspective?
Minister Fidelis Magalhaes: Well, thank you very much, Prashanth, for the opportunity. So let's start with ASEAN membership, or at least with the most recent development. I think, as you rightly pointed out, President Ramos-Horta once said that it was more difficult to get into heaven rather than joining ASEAN. I think at this stage, the signals that we've been receiving from Malaysia, who is now the chair, and from other members, we have been receiving quite a significant and more promising signal. So in a sense, I think the expectation is already Timor-Leste is somehow around the corner from heaven, but maybe not entirely inside. So the expectation or the signals that we've been receiving here from Timor-Leste, or at least the sense, is that maybe still this year Timor could join. And at least from the policymakers or from present government's viewpoints or statements is that it is realistic to expect Timor-Leste becoming a full member or acquiring full membership. But again, there are still things to be done policy-wise and streamlining policies to adapt to the ASEAN standards. So it all remains to be seen. But I think from Dili's viewpoint, I think there is a new sense of optimism.
“I think the expectation is already Timor-Leste is somehow around the corner from heaven, but maybe not entirely inside.”
REGIONAL CONNECTIVITY
ASEAN Wonk: Great thanks for that. You mentioned Malaysia and its ASEAN chairmanship. Given the twin pillars are inclusivity and sustainability, Timor’s inclusion would presumably be part of that story and would make sense from a narrative perspective as well. I’m wondering if you could say a little bit as well about something we were talking about offline earlier. Often there’s a bit of misunderstanding or lack of understanding about some of the very basic mechanisms within Timor and how it operates. It is a country that on most indices is among the most – and sometimes the most – democratic country in Southeast Asia. But I know President Ramos-Horta and other officials have said, in spite of the fact that Timor registers quite well on these metrics, they also hope that Timor can improve on the economic metrics as well, because it remains one of the lesser developed countries in Asia, and also one of the lesser connected countries within Southeast Asia. For people who have gone to Timor, they recognize there's only a few places that you can get flights actually registered, and hopefully this changes over time. Can you provide us with a sense of that regional connectivity? Because for the country, there’s links to Indonesia and relationships with countries that are important and evolving such as with Singapore, for example. How do you assess not just the issue of ASEAN membership, but connectivity of Timor as a member of the Southeast Asian neighborhood and community?
Minister Fidelis Magalhaes: Well, let's start with going back in time slightly. So I think the FRETILIN leadership [initially the resistance fighting for Timor’s independence] believed it was important for Timor-Leste to be a member of ASEAN for political reasons. And this continues to be – at least I think – imprinted in political discourses within Timor-Leste. And the thinking remains the same: that it is imperative for Timor-Leste to be a member of ASEAN in order to ensure our long-term security and also in order to gain voice internationally. Because as you know, globally, it is the practice these days for countries to be members of their own immediate neighborhood alliances or groupings. Well, Timor-Leste and probably one or two other countries in the world I think have not done so. So it is, for our viewpoint, it is almost incomplete for ASEAN to exclude Timor-Leste. It is so natural for Timor-Leste to be part of ASEAN. Culturally, economically, Timor-Leste is part of Southeast Asia and ASEAN. It is embedded. It is a natural member of Southeast Asia. And maritime Southeast Asia is obviously quite incomplete without having Timor-Leste as a member.
Now, we understand that there are disagreements. There are concerns. And this is not only something which I think concerns observers or members of ASEAN. Even the Timorese, we are normally very harsh in terms of assessing our own advances or our own progress. We believe that sociopolitically, we have made a lot of advancements, we've achieved quite a lot. But in order for these sociopolitical achievements to be sustainable, you'll need to combine it with socioeconomic or economic development. Now, whereas we are advancing quite fast sociopolitically or institutionally or in terms of state-building, economically we are lagging behind. So for us it is also a matter of state survival or the continuity of the Timorese state or a nationhood as a social political experiment of building a democratic society or a sustainable society.
We really have to, we do not have time to waste. We need to actually push our economic development or we really need to move ahead with economic development. So the hope therefore is that by joining ASEAN we'll be able to adapt our institutions and our regulations with that of ASEAN and that would probably make Timor-Leste conducive for intra-regional trading. That would make Timor-Leste be more adaptable to requirements from ASEAN and also from WTO and more universal or global trading regimes. So that's, I think, the expectation.
“[W]e do not have time to waste. We need to actually push our economic development…”.
Now, what does it mean in practical terms? In practical terms, I think there are a lot of legal reforms that need to be undertaken. There are a lot of institutional reforms that are needed because, as you know, our institutions, despite the progress, their progress so far is normally based on an economy that is based heavily on petroleum, but also it is an inheritance to some degree of a rather centralized UN mechanism. So you actually need to modernize this and you'd have to make sure that it is adaptable to the demands of a more embedded regional economic architecture. So we believe that ASEAN as the future economic powerhouse would be beneficial to Timor-Leste. So us joining ASEAN would in a way allow us or enable us to have a greater, larger market. As you know, being a small country, we do not have the privilege of having an economy of scale. For our own development, we really have to be embedded or be part of a regional economic framework.
But for that, you really need a lot of work. We also have to work with the mindset of the people. So people have to understand the tradeoffs; people have to understand the challenges that may come with the opportunities. So economically speaking, what it really means and the way in which the economy has been set up…you would have to realize that when you are actually exposed or be a player in a larger regional system where there is a demand for fair treatment for all players, then it probably may introduce some hiccups, some changes that may not be well-received at least in the first few years of us becoming a member. So this is I think the work you’d need to do. So probably learning from Singapore – from [former Prime Minister] Lee Kuan Yew – where you have a key choice for a rather open, more free market-oriented economy. But whereas in Timor-Leste, I think to start with, the structural economic system was not that open and has been in a way driven by the demands to actually raise or to protect infant industries. But infant, in this sense, I think is understood to be national private sector. So there will be implications.
But anyway, from Timor-Leste’s point of view, that it is very natural that for us to be a member. It is not well understood why we're not a member of ASEAN despite our economic challenges in comparison with Laos, Vietnam, Cambodia joining in the 1990s. Anyway, we think that we can be a member, but we are also cognizant that the path towards membership would require a lot of work. And our readiness still – to be very frank – we will still need to do a lot of work. But again, it is not fair to expect Timor-Leste to be perfect prior to joining, right? So you can join, you can have doors opened for you, then you upgrade and you upscale your own institutions or your own capability. So I think it is not fair having acknowledged our weaknesses and the challenges for Timor-Leste given the country became independent fairly recently.
MAJOR POWER BALANCE
ASEAN Wonk: I think that's an important point that you make about the standards by which Timor is being judged. You’re right in terms of the fact that during ASEAN's expansion in the 1990s to involve more mainland Southeast Asian countries, these countries were also far from perfect. And in some cases, there are still some challenges with these countries, as we've seen with the situation in Myanmar, for example, that is occurring now.
I'm wondering if we could switch a little bit and talk about foreign policy. I think there is a tendency for some outside observers to view Southeast Asian countries and their relationships and alignments from the prism of the United States and China, given the ongoing geopolitical competition between the two countries. But for Timor, historically it's fair to say I think that in terms of the two most impactful countries in foreign policy, they actually wouldn't be the United States and China; they would actually be Australia and Indonesia. It’s a pretty interesting time for both of those relationships. We have an election that just occurred in Indonesia, and we have President Prabowo now taking over in Indonesia. We've got an election in Australia this year as well. So changes and dynamics and shifts within two critical relationships for Timor. I'm wondering if you could also say a little bit about those two relationships. For Australia in particular, we've seen some focus on recent bumps with the relationship with Timor that's affected some issues like maritime security, for example. We’re also looking at progress on issues like Greater Sunrise, which is important for economic development which you flagged earlier as well. So how would you characterize the status of both of those relationships and what we might expect for the rest of 2025 in that regard?
Minister Fidelis Magalhaes: Before I go into this question, I think there was a part which I actually left off that has to do with connectivity which you raised. Timor-Leste has been investing in building the airport. And our airport is largely unused. So it only operates, I think, about 60% or something because the runway is too small. It does not operate at night. So I think I'm just being lenient, being kind now to say 60%; probably less than 60%. So I think these are critical infrastructures that we need to work on to be able to improve connectivity. But there is a port that we just built quite recently that enables Timor-Leste to be connected to countries in the region through trade and through shipping.
So it may seem that Timor-Leste is somewhat quite isolated, but in reality, Timor-Leste is well-connected. It is connected through trade with Indonesia. It relies heavily on Indonesia, where it also suffers trade deficit. And with Singapore, Singapore is a very important trading partner and Timor-Leste also is suffering from trade deficit because the trade balance is quite imbalanced because Timor-Leste really doesn't sell anything but Timor-Leste imports most things through these countries relying on the petroleum fund. So we just hope that we can make use of this market access to these countries, that we can sell more to these countries. But again, we need to make sure that the airport becomes more operational, airlines can increase in their capacity. And we need to actually fix our capability, our infrastructures for ASEAN-related objectives for meetings, for conventions. And so we can actually combine that with our tourism plan. So you can target, you can tailor to this ASEAN readiness component, using that as a platform to improve your own tourism attractiveness.
So when I was in government, I actually led this MCC [Millennium Challenge Corporation] project where I was the principal representative of the Timorese state in negotiating with America, where we secured around $484 million to finance projects in water sanitation and education. But more importantly I think is the water sanitation component, because I think in order to diversify, you have to make sure that really Timor-Leste has access to clean water, that the groundwater is not polluted, that people will not come to Timor-Leste and suffer from waterborne diseases or bacterial infections. I think these are very important, which will in a way help us to be ready for ASEAN and to be hosting important events in Timor-Leste but also will make us more ready as a tourism destination.
So with that in mind, I think Timor-Leste will be much more connected. So connectivity will then increase because there's also demand. And so trading-wise I think in the long run in the future it is important for Timor-Leste to attract more investments from Southeast Asian member states from Singapore, from Indonesia.
We're working a lot with our friends from Indonesia to be bringing investors to come in and some about two three years ago I wrote about special economic zone with this idea that you know you can actually make use of Timor-Leste as market access, being an LDC [least developed country], et cetera. When you have this shortage of capital, you can bring in capital when you have an oversupply of labor in Timor-Leste seeking for jobs. So you can really combine this as you have different types of factor endowments. So this was the proposal that we presented. And I just hope that this government can really take advantage of that. Because strategically, I think you will only be sovereign or safe when you have other countries interest deeply implanted on your soil. Because if you are just being, you continue to be a baroque isolated country with very little international financial or business or economic interest then you will be alone because then you will be truly an island. If you have different interests on your soil, I think there is then a much greater incentive for countries to work, to make sure that you are protected or to come to your aid or to your defense in the long run, should there be problems. So this is, I think, the thinking, in terms of how to survive.
“If you have different interests on your soil, I think there is then a much greater incentive for countries to work, to make sure that you are protected or to come to your aid or to your defense in the long run, should there be problems. So this is, I think, the thinking, in terms of how to survive.”
I think it is essentially to be more open, to be more welcoming, to also be encouraging more capital, more economic investments be coming to Timor-Leste. So the government is also cognizant of that. I think of different various governments that have come and gone. I think normally they somehow strive to propose pro-investment, pro-business policies. But I think you really need to have the ability to make that to work to the implementation, where the details are and the devil is in the details right? I think that's where we are. And I think this was just a chance for me to go back to where you touched upon previously.
Now, going back to the second component of your question. So let me just probably divide into different blocks. I think first is America and China. Second, probably at a much more regional and immediate level, Australia and Indonesia.
So let's start with China and the US…..
[Note: This is the end of a free preview podcast, with the full version in an earlier post published on January 30, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].
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