Event
A meeting between Indonesia's president, Susilo Bambang Yudhoyono, and the Timorese prime minister, Xanana Gusmão, in Jakarta on March 20th resulted in a promise from the Indonesian leader to complete the demarcation of the land border between the two countries before his presidency ends in mid-2014.
Analysis
Relations between Indonesia and Timor-Leste have improved markedly during the Yudhoyono presidency, which began five years after the 1999 referendum that started Timor-Leste's bloody secession from Indonesia. The meeting between Mr Yudhoyono and Mr Gusmão continued the pair's cordial relationship, and they discussed an end to a land-border dispute that has been ongoing since Timor-Leste's independence was declared.
More than 90% of the border is now mutually agreed upon, but Mr Yudhoyono assured Mr Gusmão that the remainder would be settled before he leaves office in just over a year's time, and that the Indonesian government was committed to ensuring that border crossings should be as straightforward as possible.
The Timor-Leste government will pay close attention to the Indonesian presidential and parliamentary elections due in 2014, and will be keen to ensure that bilateral relations remain positive. Notably, the candidacy of a former Special Forces general, Prabowo Subianto, who led missions in East Timor to crush the burgeoning independence movement in the 1990s, will be viewed with suspicion.
According to reports in the Indonesian media, the two leaders also discussed Timor-Leste's ongoing bid to join the Association of South-East Asian Nations (ASEAN). Indonesia has been a strong advocate of the bid, but so far ASEAN has remained tight-lipped on its prospects. In an address to the press, the Indonesian foreign minister, Marty Natalegawa, said that Timor-Leste's membership was in his country's interest and that "the region's future would be unstable if it was not an ASEAN member". Advocates argue that the employment opportunities that would be created through the country's involvement in the ASEAN free-trade area would help to cut unemployment, which remains one of the biggest threats to political stability in Timor-Leste.
Impact on the forecast
We expect relations between Indonesia and Timor-Leste to continue to strengthen in the forecast period. Indonesia's support for the ASEAN bid will underpin the relationship.