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Sustainable development or resource cursed? An exploration of Timor-Leste's institutional choices.

This thesis explores the institutional choices available to Timor-Leste to manage their natural resource wealth wisely and avoid the resource curse. Timor-Leste is a poor country and its challenge is to use its large per capita resource wealth to alleviate poverty and enable sustainable development. This research examines the Petroleum Fund Law, and other mechanisms to manage petroleum revenue that the Government of Timor-Leste has established. These mechanisms appear to be resilient, but remain untested. Based on field interviews in Timor-Leste, the study offers insights into the opinions of East Timorese and foreign advisers about how Timor-Leste´s petroleum revenue should be managed, and how a poor country can raise the living standards of its people.¶A framework that identifies human and social capital as essential to the quality of institutions is developed in this research, which proposes that the pre-condition of institutions affects the management of natural resource revenue. As a result of history (not its natural resource wealth) Timor-Leste´s productive institutions are weak and destructive institutions, such as corruption, are strong. The preferences of the research participants, identified using semi-structured interviews and multi-criteria decision analysis, revealed that what petroleum revenue is spent on is the most important petroleum revenue management decision. Further, health and education were regarded the highest spending priorities. Petroleum revenue management decisions that may affect Timor-Leste´s economic, social and political independence were also important to participants.¶Timor-Leste´s sustainable development depends on continued assistance in the form of foreign advisers to address its lack of human capital. A commitment to transparency should counteract the lack of trust between government and civil society. Timor-Leste will also need to invest more in people, and recognise that the wise management of its petroleum revenue depends as much on good governance as the mechanisms designed to manage it. The people of Timor-Leste´s fierce determination to overcome the challenges they face, against all odds, may help Timor-Leste to avoid the resource curse.¶

Identiferoai:union.ndltd.org:ADTP/216871
Date January 2007
CreatorsDrysdale, Jennifer, Jennifer.Drysdale@anu.edu.au
PublisherThe Australian National University. Fenner School of Environment and Society
Source SetsAustraliasian Digital Theses Program
LanguageEnglish
Detected LanguageEnglish
Rightshttp://www.anu.edu.au/legal/copyrit.html), Copyright Jennifer Drysdale

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