UNDP findings

Average life expectancy of 57 years More than 50% illiteracy Per capita GDP is $478 Half the population earn less than 55 US cents a day 50% of infants are underweight

It said East Timor will rank among the world's 20 poorest countries, alongside the likes of Rwanda, Angola, Bangladesh and Mozambique.

The UNDP said the way that the new administration built a system of governance over the next two years would be crucial to the fledgling state's success as a nation.

East Timor has been under UN administration since it won independence from Indonesia in a 1999 poll. It will assume full autonomy on 20 May.

Promising resilience

"Through the long years of colonisation and occupation, the people of East Timor retained an unquenchable desire for freedom. That kind of courage and determination should serve them well in the years ahead," said the report.

UNDP East Timor director Finn Reske-Nielsen, after launching the report on the eve of a two-day meeting of foreign donors in the capital, Dili, said international support would be crucial.

The report underlined the dire economic effects of an unstable past.

Per capita gross domestic product is $478 and half the population is earning less than 55 US cents a day.

Very few people have received adequate education and more than half are illiterate.

The report said the way that the half-island used revenues from gas fields in the Timor Sea - which could earn it $180m a year, from 2006, would be a key to its success.