weighted score 3.1 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Timor-Leste
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Timor-Leste as a sourcing destination.
Labour cost competitiveness
8
Among the lowest wages in Southeast Asia at USD 115/month minimum. However, extremely limited workforce scale and near-zero manufacturing base mean low wages do not translate to sourcing competitiveness.
Supply base depth
2
Virtually no manufacturing sector. Economy dominated by oil/gas and subsistence agriculture. Coffee is the only non-oil export of any scale.
Logistics & infrastructure
2
Dili port has minimal container capacity. Road network extremely limited. No rail. Frequent power outages. Infrastructure among the least developed in Southeast Asia.
Workforce skills
3
Very young population but extremely limited technical skills. Few vocational training institutions. Most skilled labour for infrastructure projects is imported.
Scalability
4
Small population (~1.4M) and near-absence of industrial base severely limit scalability. Petroleum Fund provides fiscal buffer but economy lacks diversification.
Ease of doing business
3
Business registration slow and complex. Legal framework still developing. Contract enforcement weak. Foreign investment law exists but implementation capacity limited.
Trade access & tariffs
3
EU EBA duty-free access as LDC. ASEAN membership pending (approved in principle 2022). Limited bilateral trade agreements currently in force.
Sustainability baseline
3
Low industrial emissions but heavy diesel dependence for power. Deforestation and land degradation concerns. Climate adaptation capacity very limited. Flood and cyclone exposure.
Innovation & IP
1
Minimal R&D infrastructure. Not a WIPO member. No national standards body with international accreditation. Patent activity negligible.
Quality standards
2
No internationally accredited standards body. ISO-certified facilities virtually absent. Quality control depends entirely on buyer-side systems.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage levels
- Timor-Leste is one of the lowest-wage economies in Southeast Asia. The minimum wage is USD 115/month for the private sector. Labour costs are very low but so is workforce scale and productivity.
- Labour market
- Population of approximately 1.4 million with a very young demographic profile. Workforce is overwhelmingly rural and agricultural. Formal-sector employment is limited, concentrated in government, construction, and small-scale services.
- Skills availability
- Technical and manufacturing skills are extremely limited. The country has very few vocational training institutions. Most skilled labour is imported for infrastructure and oil/gas projects.
- Cost-sensitive categories
- Low wages do not translate to sourcing competitiveness due to the near-absence of manufacturing infrastructure, supplier ecosystems, and export logistics capacity.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing base
- Timor-Leste has virtually no manufacturing sector. The economy is dominated by oil/gas revenue and subsistence agriculture. Coffee is the only significant non-oil export, produced by smallholder farmers.
- Port infrastructure
- Dili port is the primary gateway but has very limited container handling capacity, shallow berth depth, and minimal mechanisation. Port congestion is common. No deep-water port exists.
- Road network
- Road infrastructure is extremely limited, particularly outside Dili. Many rural areas are accessible only by unpaved roads that become impassable during the wet season. No rail network exists.
- Power supply
- Electricity supply is unreliable outside the capital. The country depends heavily on diesel generation. Power outages are frequent and would severely constrain any manufacturing operations.
Trade Access & Business Environment
Trade Access & Business Environment
- ASEAN status
- Timor-Leste has been an ASEAN observer since 2002 and was approved for membership in principle in 2022. Full accession is expected but has not yet been completed. Once a member, ASEAN trade preferences would apply.
- EU trade relationship
- Timor-Leste benefits from the EU Everything But Arms (EBA) scheme as a Least Developed Country, providing duty-free, quota-free access to the EU market for all products except arms.
- Petroleum Fund
- The USD 19 billion Petroleum Fund (sovereign wealth fund) provides fiscal stability but oil/gas revenues are declining as the Bayu-Undan field matures. The Greater Sunrise field development remains unresolved.
- Regulatory environment
- Business registration and regulatory processes are slow and complex. The legal framework is still developing. Contract enforcement is weak. Foreign investment law exists but implementation capacity is limited.
Innovation, IP & Quality
Innovation, IP & Quality
- Innovation capacity
- Timor-Leste has minimal R&D infrastructure. There is one public university (UNTL) with limited research capacity. Patent filings are negligible. No technology sector of significance exists.
- IP framework
- Intellectual property legislation is still under development. Timor-Leste is not a member of WIPO treaties. IP enforcement mechanisms are essentially non-existent.
- Quality standards
- No national standards body with international accreditation exists. ISO-certified facilities are virtually absent. Coffee exports rely on buyer-side quality control and fair trade/organic certification schemes.
- Digital infrastructure
- Internet penetration is low and bandwidth limited. Mobile coverage exists in urban areas but is patchy in rural districts. Digital infrastructure would not support technology-intensive supply chain operations.