What Timor-Leste’s Accession Reveals About ASEAN’s Strategic Identity

“History is made,” declared Timor-Leste’s Prime Minister Xanana Gusmão in October 2025 during the signing ceremony marking the small country’s entry into the Association of Southeast Asian Nations (ASEAN). For Timor-Leste, ASEAN membership celebrates the nation’s resilience and determination, 23 years after gaining independence from Indonesia and 14 years of negotiations with the organization. For ASEAN, it represents the continuing realization of a united regional community built on shared values and common goals, signaling both recognition of Timor-Leste’s regional identity and the bloc’s willingness to integrate a small, overlooked state. 

Beyond its national story, Timor-Leste’s accession reflects a broader pattern across the Indo-Pacific: small, peripheral, and strategically exposed states seeking stronger regional anchoring amid intensifying great-power competition. Countries such as Papua New Guinea have similarly navigated competing pressures from China, Australia, and regional bodies, while Myanmar illustrates how internal fragmentation can complicate regional integration. Seen in this light, Timor-Leste offers insight into how ASEAN manages culturally diverse, institutionally uneven, and geopolitically vulnerable states at its margins. It also highlights the fragility of ASEAN, which must accommodate new members without undermining cohesion or effectiveness.

The accession also highlights deeper dynamics within ASEAN. Indonesia, the union’s pivotal power and Timor-Leste’s former occupier, played an important role in the process, balancing historical sensitivities with its leadership responsibilities. Timor-Leste’s entry offers a lens on ASEAN’s internal cohesion and strategic interests. Why did it take so long for Timor-Leste to join ASEAN, and what does this reveal about the organization’s ability to integrate diverse members while staying relevant?

Timor-Leste’s path to ASEAN membership has been very long. After gaining independence from Indonesia in 2002, the small nation formally applied for membership in 2011, seeking security and recognition in the region. By 2022, it had attained observer status, a milestone that allowed it to participate in discussions without full voting rights.

ASEAN’s official criteria for new members include institutional readiness, economic integration, and alignment with the organization’s norms and practices. ASEAN last expanded in the late 1990s, admitting Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia in 1999. While technical requirements are essential, structural reforms within ASEAN, especially related to economic integration and institutional capacity, remain an ongoing challenge, underscoring the gap between formal rules and political realities.

For Timor-Leste, joining ASEAN has been about more than meeting technical requirements: it offers regional legitimacy, a way to avoid geopolitical isolation between Southeast Asia and the Pacific, and the possibility of developing its economy. The accession into the organization integrates the country into the ASEAN Economic Community and the ASEAN Free Trade Area, progressively eliminating tariff and non-tariff barriers. Yet, the reality is that ASEAN enlargement is as much a political process as a technical one. Decisions about who may join reflect member states’ strategic calculations, internal dynamics, and concerns about maintaining cohesion in a culturally and economically diverse bloc. Timor-Leste’s journey, therefore, illustrates the fragile balance between aspiration and pragmatism that shapes ASEAN’s approach to expansion.

Indonesia plays a central role within ASEAN. As the region’s largest economy and most populous nation, it functions as a gatekeeper, shaping the bloc’s agenda and mediating disputes. ASEAN has already faced significant difficulty reaching agreement on contentious issues such as the Myanmar political crisis and the Southeast Asian Sea tensions with China. Admitting Timor-Leste was therefore seen as likely to further complicate efforts to build consensus.

Indonesia’s leadership role does not make it neutral regarding its responsibilities and sensitivities, particularly concerning other ASEAN members such as Timor-Leste. The relationship between Indonesia and Timor-Leste remains politically sensitive. The legacy of Indonesia’s occupation between 1975 and 1999, which ended in Timor-Leste’s separation, continues to influence perceptions on both sides. While Indonesian authorities emphasized reconciliation and support for Timor-Leste’s ASEAN aspirations, underlying tensions persist. Jakarta must navigate historical grievances alongside contemporary regional ambitions, balancing moral commitments with strategic caution.

This tension is reflected in what can be described as a “double discourse.” Publicly, Indonesia signaled support for Timor-Leste’s integration, framing it as an expression of regional solidarity and inclusivity. Privately, policymakers exhibited hesitation. Concerns included how ASEAN’s reliance on consensus could be strained and the challenge of maintaining institutional capacity, among others. By carefully managing expectations, Indonesia sought to avoid undermining both its domestic credibility and its authority within ASEAN.

Indonesia’s ambivalence toward Timor-Leste reflects a broader foreign-policy pattern: the tension between moral leadership and pragmatism. On one hand, as the region’s largest democracy, Indonesia aspires to be a regional example in terms of justice, stability, and cooperation. On the other hand, it remains mindful of the internal political pressures and ASEAN’s consensus-based system. In this gatekeeper role, Indonesia’s influence is notable. Yet, its approach reflects a steady balance between its stated principles and the practical realities of admitting new members.

ASEAN’s principle of consensus and non-interference has long been both its strength and its limitation. By requiring all members to agree before major decisions are taken, the bloc ensures that no country is marginalized. Yet, this same principle often slows decision-making, especially when member states have divergent interests. Internal divisions further complicate ASEAN’s ability to act decisively. Some members, such as Cambodia, Laos, and Malaysia, view the inclusion of new members like Timor-Leste as important to reinforce the bloc’s image of regional solidarity. Other members, including Singapore and Thailand, expressed reluctance, particularly about the financial costs, administrative burdens, and the governance capacity required to integrate new members effectively. These differing perspectives highlight the tension between aspirations for inclusivity and the practical limits of institutional capacity.

Timor-Leste faces severe socio-economic challenges, including multidimensional poverty, heavy reliance on oil revenues, and limited economic diversification. With the smallest GDP in the bloc, underdeveloped infrastructure, a minimal private sector, scarce skilled labor, and a difficult business environment, Timor-Leste risks slowing key initiatives like the ASEAN Economic Community, which aims to narrow development gaps and advance regional integration. In addition, while ASEAN markets account for over 60% of Timor-Leste’s imports, similarities in export profiles raise questions about the potential trade benefits of integration.

ASEAN often appears as a unified bloc externally, emphasizing cohesion and shared values. However, internally, the organization struggles to manage diversity, balancing the demands of larger and smaller states while preserving the integrity of its decision-making processes. The case of Timor-Leste illustrates this dilemma sharply. While admitting a new member strengthens ASEAN’s claim to represent all of Southeast Asia, it also raises fears of further diluting the efficiency of the bloc’s already limited institutional structures. In this sense, ASEAN’s commitment to unity sometimes comes at the expense of effectiveness, revealing a paradox at the heart of the organization: a desire to be inclusive and representative, tempered by the practical realities of governance and capacity.

Unlike Timor-Leste, whose challenges are primarily related to size, economic potential, and peripheral status, Myanmar’s difficulties in integrating with ASEAN stem from internal fragmentation, political instability, and authoritarian governance. Yet, both cases reveal how ASEAN must navigate the integration of states with distinct political systems, economic capacities, and ethno-cultural landscapes. Timor-Leste’s Portuguese-influenced culture and Catholic heritage contrast sharply with the diverse ethnic and religious composition of Myanmar, illustrating how ASEAN must accommodate varied historical legacies and cultural identities. The accession or inclusion of such diverse members carries geoeconomic implications, shaping trade networks, investment flows, and infrastructure development, while also raising questions about cultural representation, identity, and the organization’s ability to foster an inclusive regional community. Examining Myanmar alongside Timor-Leste highlights the delicate balancing act ASEAN faces: extending membership and influence without overextending institutional capacity, all while negotiating both the strategic and symbolic stakes of regional identity in a rapidly changing Indo-Pacific.

China has rapidly become one of Timor-Leste’s major investors across major sectors. Projects such as the Tibar Bay Port, national road networks, and energy infrastructure have strengthened China’s economic presence and political visibility on the island. This dynamic became more consequential as ASEAN hesitated on Timor-Leste’s accession. Every delay kept the country outside the region’s institutional frameworks, leaving it more vulnerable to dependence on China for financing, expertise, and diplomatic backing. Like for many countries of the Global South, China offers a compelling package: development assistance with no political conditions, fast project delivery, and a narrative of partnership between developing states. This stands in contrast to ASEAN’s slower, process-heavy approach, which often appeared indecisive.

Australia and Japan view Timor-Leste’s ASEAN integration through the lens of regional stability and great-power competition. Both countries strongly support Timor-Leste’s accession, seeing ASEAN as the best vehicle to embed the young nation in a rules-based regional order. For Australia, this fits into a broader strategy to stabilize its northern neighborhood, and limit China’s influence close to its maritime approaches. Australia’s longstanding security and development ties with Timor-Leste make its advocacy both geopolitical and pragmatic. Japan sees Timor-Leste’s membership as a way to reinforce ASEAN’s centrality within Indo-Pacific diplomatic and security frameworks. For Japan, a more inclusive ASEAN helps prevent fragmentation and maintains a counterweight to China’s rise. 

Timor-Leste has approached its ASEAN accession with considerable strategic initiative. In its diplomacy, the small nation has carefully balanced engagement with ASEAN, China, Australia, and the Pacific Islands Forum, ensuring that no single actor dominates its foreign policy. Membership in ASEAN represents both an opportunity and a necessity: it provides access to regional markets, investment, development funding, and political legitimacy within Southeast Asia. Yet, as Asia’s youngest democratic nation, Timor-Leste remains mindful of the potential trade-offs, particularly the risk of losing autonomy within an organization that includes more authoritarian regimes, such as Myanmar, Vietnam, and Laos. By navigating these competing pressures, the country demonstrates that small states need not be passive actors but can shape outcomes through careful negotiation and strategic foresight.

Civil society and the private sector in Timor-Leste have also influenced the process, advocating for development opportunities and engaging in regional networks that bolster the country’s bargaining power. For instance, in 2011, organizations like La’o Hamutuk monitored the government’s use of oil revenues and pushed for transparent budgeting, while business associations such as the Chamber of Commerce and Industry of Timor-Leste have actively lobbied for reforms to company law and regulatory frameworks in order to improve the overall investment climate. Together, these actors have strengthened Timor-Leste’s position in negotiations with development partners and regional organizations.

Timor-Leste’s application was a test of ASEAN’s credibility. The longer the accession process dragged on, the weaker the bloc’s claim to regional “centrality” appeared, especially as outside powers moved faster and more strategically. Timor-Leste serves as a symbolic example of ASEAN’s attempt to incorporate a small, diverse, and institutionally limited state while managing pressures from external competition. The way Timor-Leste addresses this challenge will reveal whether ASEAN is capable of adapting to a shifting geopolitical environment or remains limited by internal hesitations.

Beyond Timor‑Leste, other peripheral states in the Indo‑Pacific face increasing pressures and choices. For instance, on one hand, Papua New Guinea navigates strategic and economic pressures from both China and regional powers, while maintaining its own domestic priorities. Recently, Papua New Guinea has reaffirmed its ambition to transition from ASEAN observer status to full membership, highlighting its strategic value to the bloc. On the other hand, the Solomon Islands has had to balance ties with China and Australia, managing development opportunities alongside sovereignty concerns. These cases illustrate the challenge for ASEAN and other regional organizations in accommodating states that are culturally, economically, and geopolitically distinct.

Timor-Leste’s slow accession to ASEAN reflects the organization’s internal contradictions and Indonesia’s cautious leadership. The case highlights the tension between inclusivity and efficiency, the limits of consensus-based decision-making, and the competing interests of large and small members. The way ASEAN integrates its smallest member will show whether it can remain a cohesive and credible regional force, capable of managing diversity and external pressures, or risk drifting toward strategic irrelevance in a rapidly changing geopolitical landscape.