Hillary Clinton in East Timor, hoping to lend stability to Asia's poorest country (+video)

Clinton is not bringing much in the way of new financial assistance and is set to announce just $6.5 million in funding for scholarships to help East Timorese students study in the United States.

But US officials hope her visit will send a signal to East Timor's neighbors, some of which have strongly resisted suggestions that it be brought into the Association of South East Asian Nations (ASEAN) because it lags too far behind the rest of the region in both political and economic development.

Gusmao won parliamentary elections in April but fell short of a majority, forcing the formation of a coalition government.

US officials say East Timor is hobbled by a number of weaknesses following more than 400 years of Portuguese colonization and a 24-year battle against Indonesian occupation, and that closer ties with ASEAN would bring stability.

Isolated by their Portuguese language in a region where English is increasingly common and lacking much basic infrastructure, the country nevertheless began receiving oil and gas revenues from fields it shares with Australia in 2005 and now boasts a special petroleum fund with assets exceeding $10 billion.

CHINA LOOMS LARGE

During her trip, Clinton will also take stock of growing Chinese aid and investment in the country, part of Beijing's rapid push to accelerate its influence in the region.

China has built a number of major government buildings in East Timor. It has also signaled, however, that it is willing to partner with the United States in development projects aimed at assisting the country's people, some 40 percent of whom live on less than dollar a day and battle extremely high unemployment rates.

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