On Sunday, East Timor will celebrate 10 years of independence. As a nation born from the ashes of destruction, its first decade has been marked by problems and setbacks.

Many in East Timor, not least its outgoing president, Jose Ramos-Horta, lament a lack of development since independence. Ramos-Horta notes that the international community has spent billions of dollars in East Timor, yet most East Timorese remain amongst the world’s poorest people.

But a little over a year ago, Ramos-Horta said that the country had never been better. The question is, in part, whether the metaphorical glass is half empty or half full.

It is also, in part, whether the speaker — in this case Ramos-Horta — had a political score to settle. In early 2011, Ramos-Horta was still firmly in Gusmao’s political tent. A year later, he is an ex-president outside that tent.

Many East Timorese have also been disappointed with independence. With independence came statistical indicators — and a reality — that showed East Timorese people among the most underprivileged in the world. A recent report noted that, as a result of malnutrition, most East Timorese children suffered from stunted growth.

But East Timorese people have always been critically poor, and the situation getting worse before it gets better is an almost universal post-independence phenomenon. Unsurprisingly, rising popular frustration ran up against limited government capacity. The 2006 result, as it has been in many other newly independent countries, was chaos.

Since then, however, a democratic change of government coincided with rising oil receipts and developing local capacity has seen its key development indicators vastly improve. Infant and maternal mortality rates have been cut in half and literacy has increased along with average incomes and life expectancies. If East Timorese children do have stunted, they are much less likely to die of starvation.

But East Timor still has many challenges ahead of it, the biggest of which is the sustainable management of its $10 billion-plus oil fund. It is this — and realistically only this — that will underpin the economy into the indefinite future. However, the oil fund is being spent at well beyond a sustainable capacity.

The government argues this spending is necessary to boost infrastructure development and skills and, in effect, buy off problems such as high unemployment. But there is the very real risk that spending will not produce the desired outcomes, will promote corruption and will eventually leave the country broke.

Ten years on from independence, East Timor has two saving graces. One is that while the UN and the Australian-led peacekeepers are due to leave at the end of the year, the international community remains committed to East Timor’s longer-term success.

But, most importantly, the people of East Timor have embraced the idea that they can determine their own affairs. It is this commitment to regularising and further embedding political accountability, evident in the election process that is coinciding with its 10th anniversary, which gives East Timor the best chance for the future.

*Professor Damien Kingsbury is director of the Centre for Citizenship, Development and Human Rights at Deakin University and is co-ordinating volunteer observers for the Australia Timor-Leste Friendship Network to East Timor’s 2012 elections.