Timor-Leste is among the world’s poorest countries and poverty reduction is high on the
country’s policy agenda. The National Development Plan emphasizes a poverty reduction
strategy based on economic growth and a focus on improvements in the health and education
sector. This paper describes and analyses poverty and development in Timor-Leste. We find
that progress has taken place but the situation remains troublesome with high poverty, low
levels of education and large remaining problems in the health sector. Hence, further efforts
are needed to improve upon the situation. Economic growth is fragile and too low to generate
the necessary resources for such policies. However, unexpected oil revenues seem to be
invested wisely and might provide the required means for sustainable poverty alleviation.