Abstract
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.