Baucau has about 16,000 inhabitants, and is the capital of Baucau, located in the eastern part of the country. In the times of Portuguese Timor, Baucau was called Vila Salazar, after the Portuguese dictator António de Oliveira Salazar.
The shops, restaurants, and the imposing municipal market conduct business, although unemployment, particularly among the young, is very high. There are a few successful experiments that have converted old war-oriented businesses into light engineering, and a league of small businesses are beginning in the areas of hygiene and health, food production and processing, transport, small retail, and tourism.
Baucau also has a hospital, a nursing school and a swimming pool owned by the Pousada de Baucau.
Six kilometers from the city lies the Cakung Airport (code IATA: NCH), a.k.a LANUD for the local people. It has what is currently the country's longest airport runway, as Dili's Lobato International Airport can only serve small aircraft like the Boeing 737. It served as the country's principal airport before the Indonesian invasion in 1975, when it was taken over by the Indonesian military.