This paper explores the effects of different representations of informal economies in Third World settings. Both the neoclassical and political economy approaches have represented the informal economy as a transient entity, and the non-capitalist practices it comprises as being remnant economic forms, or as already capitalist. Mainstream development discourse (that reflects the neoliberal paradigm) continues to ignore the value and potential of non-capitalist practices and to represent them as inconsequential to development outcomes. Meanwhile contemporary livelihood studies across the social sciences have documented the continuing vibrancy of different and hybrid economic forms in the Asia Pacific. In this paper, I use a diverse-economies approach to explore the complexities of the village economy of Oelua in Rote, in the so-called lagging region of Eastern Indonesia. Drawing on anti-essentialist Marxist theory in economic geography, I describe the multiple, locally specific and coexisting practices that comprise Oelua's diverse economy, which include distributions of surplus labour to promote social and economic well-being. I argue that recognising informal village economies as an important development resource could begin a process of building diverse development trajectories in Eastern Indonesia, complementing mainstream development proposals to attract foreign direct investment, shore up development assistance and source out-migration.