Can East Timor dodge the ‘resource curse’?

Despite oil and gas riches, signs of wealth remain scarce in the impoverished country.

Photo: Wong Pei Ting

Photo: Wong Pei Ting

Published by Al Jazeera English, Nov. 1, 2013.

By Tom Benner

Dili, East Timor – The 2014 budget unveiled last week by tiny East Timor is a $1.5bn spending plan funded almost exclusively – 95 percent – by lucrative oil and gas revenues. One of the fastest-growing budgets in the world in recent years, it ballooned from $64m in 2004 to $604m in 2009.

That the budget depends on a single, finite resource that could be depleted in a generation has some worrying the country may fall victim to the same “resource curse” that has seen other developing countries lose their wealth to inexperience, mismanagement and corruption.

“Given how much money has poured through the country, and given how much money the government has access to, it’s fairly depressing,” said Anna Powles, an academic researcher who worked in East Timor for eight years as an adviser to the government and several non-government organisations.

East Timor is one of the most oil-dependent countries in the world, according to the International Monetary Fund. The country’s non-oil industries, such as organic coffee and tourism, generate a fraction of the amount as the oil does. Continue reading …

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