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EAST TIMOR: DEVELOPMENT OUTLOOK

East Timor, a former Portuguese colony, formally became Indonesia's twenty-seventh province on 17 July 1976. The process of annexation and subsequent integration by the Indonesian government through the vehicle of the army (ABRI) was bloody and violent. International humanitarian organizations and human rights activists claim that as many as 200,000 people may have perished from the hostilities and the death and starvation that followed. East Timor today has the dubious distinction of being one of the poorest provinces of Indonesia. Its per capita (non-oil) GDP in 1996 was Rp807,000, placing it just above the poorest province (East Nusa Tengarra). It translates to US$95 a year at the prevailing exchange rate and US$323 at the exchange rate prevailing in the pre-crisis period. Considering the fact that in 1996 the average per capita GDP of low-income economies (excluding China and India) was US$420, it is clear that East Timor is one of the poorest regions in the world. East Timor is also the smallest Indonesian province (population 840,000) occupying a land area of 14,874 square kilometres. Its population is Papuan mixed with Malayan and Polynesian elements and is largely Christian. Ninety-three per cent are of East Timorese origin and the rest are immigrants from East Nusatengarra, East Java, South Sulawesi, Central Java and other parts of Indonesia. Like other parts of Indonesia, East Timor has also suffered from the combined effects of the financial crisis and the El Nifio weather patterns. Inflation surged in 1998, output dropped by approximately 8 per cent and poverty went up significantly.