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The situation in the Democratic Republic of Timor-Leste, which is also known as simply Timor-Leste or East Timor, is relatively calm compared with recent periods of political strife and insurrection. That said, some underlying tensions, such as with the security sector, remain to be resolved. Timor-Leste faces many serious challenges as it seeks to establish a stable democracy and develop its economy. A key challenge for East Timor will be to create enough political stability to focus on building state capacity and infrastructure with resources from the Timor Sea and prevent them from being squandered by corrupt practices.

This report discusses congressional concerns, which focus on security and the role of the United Nations (U.N.), human rights, and East Timor's boundary disputes with Australia and Indonesia. East Timor emerged in 2002 as an independent state after a long history of Portugese colonialism and later, Indonesian rule. Under several different mandates, the United Nations has provided peacekeeping, humanitarian and reconstruction assistance, and capacity building to establish a functioning government. Many challenges remain, including the need for economic development and sustained support by the international community.

This report covers the recent background of the Democratic Republic of Timor-Leste, since its independence from Portugal in May 2002. It discusses the many serious challenges the country faces as it seeks to establish and deepen a stable democracy and develop its economy.