The 2023 parliamentary election in Timor-Leste saw voters return to the “old firm” of Xanana Gusmão and Jose Ramos-Horta, reminiscent of the 2007 elections, which took place in the wake of the 2006–7 political-military crisis. Given the advancing age of these historical leaders, however, there are expectations that overdue political transitions to a younger generation of leaders would likely unfold during the current parliamentary term. As the new government took office in July 2023, Timor-Leste embarked on a crucial decade for its future amid the looming threat of a “fiscal cliff”. The country is entering what could prove the final decade of the solvency of its oil and gas sovereign wealth fund unless new revenues flow from the Greater Sunrise fields. As a result, the nation must intensify efforts to diversify its economy further and reduce excessive dependence on the oil and gas sector. At the same time, it is faced with various policy challenges arising from a major demographic “youth bulge”.

The Political-Economic Context of the 2023 Elections

In the second-round presidential election that took place in 2022, Jose Ramos- Horta won a comfortable victory over the incumbent president, Francisco ‘Lu Olo’ Guterres from the Revolutionary Front for an Independent East Timor (FRETILIN), by a margin of 62 per cent to 38 per cent. The support of Xanana Gusmão, the leader of the National Congress for Timorese Reconstruction (CNRT), played a significant role in securing Ramos-Horta's election, marking a pivotal step for Gusmão's return to power. Ramos-Horta's CNRT backers advocated for an early parliamentary election in 2022 as they believed that Ramos-Horta's presidential win signalled a potential surge in votes for CNRT. However, Ramos-Horta chose not to dissolve the incumbent parliament, which completed its five-year term in May 2023. Throughout 2022, President Ramos-Horta demonstrated his ability to moderate previously heated political tensions between the FRETILIN-dominated government and Gusmão's CNRT. His middle-of-the-road leadership style and general inclination towards consensus solutions have helped alleviate the intensity of political standoffs. In the first year of Ramos-Horta's second tenure as president, the efforts to open the doors of the presidency to the wider public were even more pronounced than in his first term. His personal touch and direct approach demonstrably endear him to the people. With an ally in the presidency, the parliamentary election of 2023 provided the opportunity for Xanana Gusmão's CNRT party to make a comeback to government.