That coalition gave Timor-Leste stability and promised stability into the future, if at the expense of a viable opposition.

That stability that looked likely only recently is now in question. The head of CNRT, Xanana Gusmao, has resigned as party chair and declared that CNRT should not enter into a coalition.

Fretilin won a plurality in the election, with 29.7 per cent of the vote, 0.2 per cent ahead of CNRT which lost 7 per cent of its vote. Fretilin took 23 seats in the 65 seat parliament, with CNRT taking 22, a loss of eight seats. Fretilin appears to have the support of the rising ‘youth’ party KHUNTO, but will require either the Popular Liberation Party (PLP) or the Democratic Party (PD) to join it to form a parliamentary majority. PD is antithetical towards Fretilin while PLP is a possible but unlikely coalition partner.

In 2015, Xanana Gusmao stood down as prime minister, putting Fretilin’s Rui Araujo in his place, creating a new coalition with Fretilin. This was cemented with CNRT’s support for Fretilin’s Francisco ‘Lu-Olo’ Gueterres successful bid for the presidency in May this year.

The widespread assumption was that, with an agreement around power sharing, Fretilin and CNRT would return to their coalition following the elections; Fretilin leader Mari Alkatiri said as much in a pre-election speech.

In 2016, Fretilin’s political nemesis, the Democratic Party, left the coalition, and is now cooperating with the Popular Liberation Party of outgoing President Taur Matan Ruak to support PD candidate, Antonio da Conceicao, for the presidential elections in May.

Guterres won the presidency with 57 per cent in the first round. That was a convincing win, but it demonstrated that either Fretilin or CNRT has lost some of what should have been, on 2012 figures, a voter base of 66.5 per cent. As it turned out, it was CNRT that overwhelmingly dropped its vote, with Fretilin again holding its resilient support base.

Having supported a Fretilin member as prime minister and a Fretilin candidate as president, there was concern among the membership of CNRT that the party was missing out on leadership positions, based on its dominant 2012 position. The expectation was that, following the 2017 elections, CNRT would be elevated back into a position of leadership.

With CNRT’s vote only just below that of Fretilin, it appears that any agreement in principle that had been reached between Gusmao and Alkatiri was nixed. Almost two weeks after the elections, with no statement of a new coalition’s being formed between Fretilin and CNRT, Xanana Gusmao resigned as head of CNRT and said the party should go into opposition.

Whatever the agreement Gusmao thought he had with Alkatiri, it was obviously void. On the strength of just a 0.2 per cent vote difference, Alkatiri was clearly playing a high stakes political game.

Fretilin will be asked by the (Fretilin) President Guterres to form a government. Fretilin will likely ask the rising ‘youth’ party KHUNTO, to join it in a coalition, giving a total of 28 seats in the 65 seat parliament. CNRT’s 22 seats with PLP’s eight seats and PD’s seven seats give what looks like will now be the opposition a majority.

Under Timor-Leste’s constitution, if the party with the most votes does not have a majority of seats in parliament, the president can appoint the party with a plurality (the greatest minority) as government. This was argued by Fretilin in 2007 when it had a plurality but not a majority, and when then President Jose Ramos-Horta eventually appointed Xanana Gusmao as prime minister at the head of a majority coalition government. That decision promoted violence on the streets of Dili, and elsewhere. It was that division which Gusmao hoped to resolve when he brought Fretilin into government in 2015.

If Fretilin does decide to form a minority government, given what looks to be a broken agreement between Alkatiri and Gusmao, a Fretilin minority government may not receive majority support for Timor-Leste’s next budget. If the budget is refused twice, the president is required to call fresh elections. If such elections are called, they are less likely to be the friendly, relaxed elections of 2017, and more like the fraught elections of 2007.

The next government’s budget will have to address the country’s budgetary spending vastly in excess of its sustainable income. It will now likely be doing so from a minority position.

Those budgetary decisions will, alone, be unpopular with ordinary East Timorese who do not yet understand their country will, at present spending, be bankrupt within a decade. Yet spending in excess of sustainable income was always Xanana Gsmao’s policy. CNRT will therefore have politically legitimate, if not economically sustainable, grounds for opposing a Fretilin budget.

Assuming President Guterres asks Fretilin to form government, and the process fails, he would then ask the leader of the next major party after Fretilin — whoever heads CNRT (and it may again be Gusmao) — to try to form government. Gusmao has said that CNRT should not form a new coalition, even though he could likely do so with former president Taur Matan Ruak’s PLP, PD and KHUNTO (who will go with whoever offers them a position), creating a coalition with 42 of 65 seats.

While Gusmao reckons that the situation in Timor-Leste is not the same as it was in 2007, following the 2006 violence, his opposition to forming any coalition will create an impasse. The situation in Timor-Leste is, as Gusmao said, different now from that in 2007. But Timor-Leste’s prospect of a stable government is starting to recede.

It may be that Fretilin can form a minority government and receive enough support in parliament for its major bills to pass. But this is far from guaranteed.

Timor-Leste’s political game is still in flux and it may be months before it is clear how it plays out. But at this stage it seems that Timor-Leste’s much vaunted political unity has now ended.

Damien Kingsbury is Personal Chair and Professor of International Politics at Deakin University and Coordinator of the Australia Timor-Leste Election Observer Mission.