Indonesia and Timor-Leste have done much to normalise relations ten years after the end to Indonesian rule in the former province, but the goodwill between capitals is not yet matched by full cooperation on the border. The costs are greatest in Oecusse, Timor-Leste’s isolated enclave inside Indonesian West Timor. Negotiators have so far failed to agree on two segments of Oecusse’s border, leaving open the risk that minor local disputes could be politicised and escalate into larger conflicts. Without a final demarcation, steps to improve management of the porous border have stalled. Initiatives that would promote exchanges and lessen the enclave’s isolation remain unimplemented. As the bonds between the two nations grow, they should prioritise this unfinished business. Leaving it unresolved can only promote crime, corruption and the possibility of conflict.

The security threat to Oecusse and its 67,000 inhabitants has sharply decreased since independence. While the unresolved border segments remain a catalyst for occasional tensions, no violence has taken place in recent years. Settlement of the border issue requires both national and local responses. The governments must work with renewed urgency to resolve the remaining disputed segments. Whatever border is agreed will not satisfy everyone. To alleviate this discontent, local arrangements for cross-border activities should be promoted. Without such flexibility, long-standing local disputes will fester and could escalate into active conflict.

Beyond security threats, the two countries face a range of border management challenges over the movement of people and goods. Though the enclave has remained politically distinct for several hundred years, links remain strong between families divided by the border. They cross regularly for marriages and funerals. Some even farm land in the other country. Isolated from the rest of Timor-Leste, residents depend on cheap goods from Indonesia.

Informal arrangements have served to facilitate movement of goods and people in the absence of a sustainable system that would promote rather than criminalise local traffic, but these are often put on hold when border tensions rise, increasing Oecusse’s vulnerability. Both countries are establishing civilian border management agencies that may help accommodate local interests in the medium term, but they are still months, if not years away. Unresolved issues regarding accountability for the violence around the 1999 referendum and the subsequent large-scale displacement across the border pose challenges that are more political than security-oriented. Their resolution is a prerequisite for the enclave’s long-term stability.

While Oecusse’s viability in the years following independence was once questioned – chiefly by foreign observers – such concerns underestimated the strong sense of Timorese identity in the enclave and overestimated the threat from former Indonesia-era militia on the other side of the border. Investment by the central government has increased, sending a message of Dili’s commitment to the enclave. While welcomed by residents, such efforts start from a low base. Infrastructure remains poor, access to information limited and the ability to deliver government services low. Nationwide decentralisation was to have given this district the autonomy to determine some of its own cross-border affairs, but the process has stalled at national level. Timor-Leste’s leadership should consider uncoupling Oecusse’s regional development from the broader process and look for ways to provide means and funds to promote direct cross-border cooperation.

As Indonesia and Timor-Leste work on being good neigh­bours, they should focus on concrete actions that improve life for the people and lessen the risk of conflict on both sides of the border. While Indonesian doctrine means a significant decrease in security forces on the border is unlikely in the near term, demilitarisation of the frontier should remain on the agenda as a long-term goal that would truly reflect normal relations. Immediate steps that should be taken include:

• finalising demarcation of the border as a matter of priority;
• formalising arrangements for efficient communications between government and security forces on both sides of the border and at all levels, so as to create avenues for quick de-escalation of future incidents;
• increasing cooperation between the two countries’ military and police, including training and exchange of attachés;
• introducing the long-discussed border pass system for citizens of both countries and implementing the initiative for joint border markets that would facilitate both commercial and social exchange; and
• improving the training, equipment, and facilities of Timor-Leste’s border patrol unit.

Dili/Brussels, 20 May 2010