Jose Ramos-Horta, who was sworn in as president on Friday, supports China’s Belt and Road Initiative global infrastructure push, potentially increasing Beijing’s influence in the Indo-Pacific region.

With infrastructure development vital to East Timor’s economy, Ramos-Horta voiced strong support for the Chinese initiative in a recent interview with Nikkei Asia.

“I am fully, fully sympathetic, supportive of the One Belt One Road … project. It is an extraordinary vision of (Chinese) President Xi Jinping. I completely support One Belt One Road,” the new president said. The US should not be “suspicious” of the initiative but cooperate to connect North, Latin and South America, he added.

Chinese companies are heavily involved in the construction of key infrastructures in East Timor, such as power generation plants, ports and expressways.

While some countries have fallen into a “debt trap” under the Belt and Road initiative, Ramos-Horta denied the risk for East Timor.

Most of the infrastructure projects in the country “are paid by us (in) cash”, rather than by Chinese loans, he said. “We have zero loans with China.”

Regarding the vision of a free and open Indo-Pacific region sought by Japan, the US and other countries, Ramos-Horta said: “We adhere to the values … as long as (they do) not turn into an anti-China alliance.”

Ramos-Horta called for China and some Southeast Asian countries to peacefully settle their territorial disputes in the South China Sea, stressing that China cannot take away the rights of countries such as the Philippines, Malaysia and Vietnam.

“The militarisation of the South China Sea is very dangerous and unadvisable,” he said, adding that China should be a “benevolent superpower”.

“We welcome partnership, cooperation, support (and) trade with any country. We don’t get involved in regional or global power politics,” the president said.

Former President Xanana Gusmao, who wields a great deal of political influence in East Timor as one of “the fathers of independence”, shares Ramos-Horta’s policy toward China.

“Our international policy is ‘no allies, no enemies’,” he told Nikkei Asia. “That’s why it is not to avoid talking to China.”

East Timor declared independence from Portugal in 1975 but was subsequently annexed by Indonesia under then-President Suharto.

Following the fall of the Suharto administration in 1998, East Timor gained independence in 2002 and became the first new sovereign state of the 21st century.

Ramos-Horta joined movements for East Timor’s independence after working as a journalist. He received the 1996 Nobel Peace Prize together with Carlos Filipe Ximenes Belo, an East Timorese Roman Catholic bishop.

In the April presidential election runoff, Ramos-Horta won more than 60% of the vote.

Gusmao, who once led the independence movement and served as president and prime minister, supported Ramos-Horta in the presidential election.

As parliamentary democracy has taken hold in East Timor, the country logged the second-highest score in Southeast Asia after Malaysia in the Democracy Index 2021 released by the Economist Intelligence Unit in February.

In the category of electoral process and pluralism, it scored 9.58 points out of 10.

East Timor has achieved “peace and stability” through a nation-building drive over the past 20 years, Ramos-Horta said. “We do not have extremist politics or extremist ideologies, left or right. We do not have ethnic-religious conflicts,” he said.

Owing to presidential elections and power changes through a democratic process, Ramos-Horta said, “We have a vibrant, functioning democracy.”

But as a price for democracy, East Timor is faced with a paralysis in politics regarding the economy due to bickering between parties in parliament.

Hence, the country is unable to change its heavy reliance on oil and natural gas, which account for 90% of national revenue. “We are not very good at performing on the economic front,” Ramos-Horta said.

East Timor’s gross domestic product expanded more than 10% between 2007 and 2009 but began to slow in the mid-2010s, according to the International Monetary Fund. In 2020, the economy contracted 8.6% from the previous year due to the Covid-19 pandemic.

With 40% of the country’s population said to live below the poverty line, Ramos-Horta said he will buckle down to create new industries.

East Timor’s oil fund – worth almost US$20 billion – will give the country financial space for the next 10 years, Ramos-Horta said.

In the coming five years, East Timor will invest in agriculture and education, the president said.

The country will work to raise self-sufficiency in food to 100% in a turnaround from dependence on imports, and develop human resources well-versed in digital technology, artificial intelligence and other cutting-edge technologies, he said.

Based on its young population, with an average age of around 20, East Timor will seek to lure investment from abroad, Ramos-Horta said.