No matter who wins Indonesia’s presidential election on July 9, one of the most central foreign policy issues for its winner, will be relations with tiny Timor-Leste, the state that occupies the eastern half of the island of Timor and that broke from Indonesia formally in 2002 after three decades of unrest.

Timor-Leste is just 12 years out from its hard-won independence from Jakarta, following centuries of benign Portuguese colonial neglect, a three-year not-so-benign Japanese interregnum during World War II and 27 years of terror perpetuated largely by the Indonesia military, some of the worst in the immediate aftermath of the United Nations-administered August 1999 independence referendum.

No matter who wins tomorrow’s presidential election in Indonesia, relations with Dili, the East Timorese capital, will undoubtedly be just as important for Indonesia’s next president as they were for outgoing president Susilo Bambang Yudhoyono (‘SBY’), who has largely improved the relationship between the two countries.

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Megawati Sukarnoputri, when she was president between 2001 and 2004, traveled to Dili to mark both Timorese independence and the swearing-in of its first national president.

But it’s been under Yudhoyono’s watch that Indonesia truly turned the chapter from post-colonial occupier to economic partner and increasingly, friendly neighbor. Yudhoyono went to Dili for the first time within six months of taking office, laying a wreath to commemorate the deaths in the 1991 Santa Cruz massacre, and he attended a 2012 celebration marking the 10th anniversary of Timorese independence. Under SBY, Indonesia has become, by far, Timor-Leste’s largest trading partner.

For the first time, in 2012, Australian prime minister Julia Gillard hosted trilateral talks alongside Yudhoyono and Xanana Gusmão, a former resistance leader, Timor-Leste’s first post-independence president and its prime minister since 2007.

With Gusmão planning to step down later this year after seven years leading Timor-Leste’s government, it will be especially important for the next Timorese prime minister and the next Indonesian president to develop the same diplomatic relationship that Yudhoyono and Gusmão share today.

That may prove difficult if Indonesians elect Prabowo Subianto, the leader of the nationalist Gerindra (Partai Gerakan Indonesia Raya, the Great Indonesia Movement Party), a former Suharto-era general and former leader of Indonesia’s special forces. Dismissed in 1998 upon Suharto’s ouster and self-exiled to Jordan, Prabowo returned as a businessman and now, as a politician, and he’s climbed back from a double-digit deficit, with essentially even odds to defeat Jakarta governor Joko Widodo (‘Jokowi’) in tomorrow’s election.

Yudhoyono also came to democratic politics from the Indonesian military, where he developed a reputation as a particularly thoughtful general. Like Prabowo, Yudhoyono has been sullied by his leadership role in the Indonesian National Armed Forces (TNI, formerly ABRI) and its misconduct in East Timor from the 1970s through the 1990s. But Prabowo has been tied to specific abuses in East Timor, including a troubling 1983 massacre in a village called Kraras:

But in recent months allegations of human rights violations involving Prabowo have intensified. Jemma Purdey voiced the opinion that as an soldier Prabowo had four tours to East Timor and led units that were “involved in some very extreme instances of violence”. Many believe that Prabowo also played a role in the 1983 massacre in Kraras, known as the village of widows, which killed many East Timorese. Prabowo protested in the strongest terms and refuted the scurrilous allegations in a letter to the editor of The Jakarta Post on Dec. 27, 2013.

Despite Prabowo’s protestations of innocence, those questions will continue to haunt any Prabowo administration, as will more well-documented accusations of human rights abuses in 1998, when Prabowo is said to have kidnapped and possibly tortured pro-democracy activists, are among the reasons the United States denied him a tourist visa in 2000.

Unlike Prabowo, a former Suharto son-in-law who last week seemed to disparage the principles of Indonesian democracy and who has all but promised a strongman approach to Indonesia’s governance if elected, Yudhoyono has garnered praise for his efforts to normalize Indonesian democracy and institutionalize civilian, democratic rule of law. Moreover, the Suharto nostalgia that underlies Prabowo’s presidential candidacy will almost certainly raise some alarm in Dili. 

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In contrast to both Prabowo and Yudhoyono, Jokowi was never part of the Suharto-era military leadership and, accordingly, is expected to have a far easier time establishing a strong relationship with Gusmão and his ultimate Timorese successor. Jokowi was just 14 years old when the Portuguese pulled out of East Timor and the Indonesian military swooped in. If Prabowo’s reputation lies entirely on his career before the 1998 post-Suharto reformasi period, Jokowi’s reputation lies entirely after it, first as mayor of Surakarta from 2005 to 2012 and, most recently, as the reformist, hands-on governor of Jakarta.

Indonesian officials have been relatively forthcoming over the past decade in coming to terms with the atrocities of Indonesia’s East Timor occupation. Yudhoyono agreed to create a joint Indonesia-Timorese Commission on Truth and Friendship, which between 2005 and 2008 compiled a report of the abuses suffered at the hands of the TNI/ABRI and, to a lesser degree, the abuses of pro-independence militias. Yudhoyono fully endorsed the conclusions, acknowledging the Indonesian military’s human rights abuses. But some critics argued that the commission’s work didn’t go far enough, especially with respect to assigning individual blame among top military brass (including key contemporary political players, such as Prabowo and his decades-long rival, former military commander Wiranto, a former presidential contender who supports Jokowi in 2014).

Even without the question of human rights atrocities in East Timor, Prabowo would already carry significant baggage into Indonesia-Timorese relations. In 1978, he led the special forces unit that killed Nicolau dos Reis Lobato, a key leader of the Frente Revolucionária de Timor-Leste Independente (FRETILIN, the Revolutionary Front for an Independent East Timor), the leading leftist militia fighting for independence in the 1970s. Lobato has become one of Timor-Leste’s leading national heroes, and he’s the namesake of Dili’s national airport. Even today, Timorese leaders continue to demand the repatriation of Lobato’s remains from Indonesia, an issue that will remain high on the bilateral agenda under either a Prabowo or Jokowi administration.

One need only look northeast to Bangladesh — and last year’s protests in Shabagh Square — to realize that unresolved problems from independence can continue to poison the development of a nascent country’s political maturation.

Reconciliation isn’t the only vital bilateral and regional issue, however.

Even with the 2005 formation of the Timor-Leste Petroleum Fund, whereby the country’s oil wealth is channelled into in a long-term sovereign wealth fund, and even with some of the world’s highest GDP growth rates over the last decade (14.6% in 2008, 12.0% in 2011, an estimated 8% last year), the country remains relatively poor on a per-capita income basis. As Kristio Wahyono, a former Indonesian representative to the United Nations Transitional Administration in East Timor, writes in The Jakarta Post, state failure isn’t out of the question for the Pacific micro-state:

Gusmão will leave the stage amidst growing state failure and rampant mismanagement. Despite the huge international support and oil money, Timor Leste remains fragile. The country has accumulated more than US$10 billion since independence in 2002 from offshore and oil gas exploitation, yet… it remains a low-income country, with extreme poverty and complex social problems. 

State failure in Timor Leste has the potential to severely impact on regional security and subsequently should be of common responsibility for the region, particularly its next-door neighbor, to prevent it from happening.

It’s still an open question if a poor country of just 1.21 million people, whose most important exports, after oil and natural gas, come from coffee, is economically viable.

From an institutional standpoint, Timor-Leste has also struggled to develop the rule of law that Indonesia has largely achieved under a decade of Yudhoyono’s steady progress. Though Indonesia’s not exactly a country known for being corruption free, it narrowly eclipses Timor-Leste in the most recent 2013 Transparency International Corruption Perceptions rankings — Indonesia places 114, Timor-Leste at 119.

Timor-Leste’s parliament earlier this year passed an incredibly restrictive media law that Gusmão may yet sign before leaving office, a troubling sign for the country’s individual freedoms, which may herald a risk of even more backsliding with respect to democracy and the rule of law.

That means that while Prabowo’s past misdeeds in East Timor could certainly complicate relations between Jakarta and Dili, any backsliding under a Prabowo administration would deprive Timor-Leste of its best example of a largely successful transfer from Suharto-era autocracy to investment-grade democracy. That makes the risks of a Prabowo administration doubly important to Timor-Leste, with implications for Australia, southeastern Asia and the entire Pacific region.

Photo credit to United Nations / Flickr.