[TimorLesteStudies] Publication: The oil resources of Timor-Leste: curse or blessing?

Jenny Jennifer.Drysdale at anu.edu.au
Mon Apr 28 20:40:40 EST 2008

The oil resources of Timor-Leste: curse or blessing?

Authors: Mats Lundahl; Fredrik Sjöholm
Affiliations:   Department of Economics, 
Stockholm School of Economics, Stockholm, Sweden
Research Institute of Industrial Economics, Stockholm, Sweden
Published in: 
March 2008 , pages 67 - 86


Timor-Leste is among the youngest nations in the 
world. It began its independence under difficult 
circumstances: poverty is widespread, education 
is poor, the industrial sector is non-existent, 
and political turbulence is on the rise. On the 
positive side, future oil revenues are predicted 
to be substantial, which could potentially be a 
great help in Timor-Leste's struggle for 
development. This paper examines critically the 
possibility for Timor-Leste to use oil revenues 
to achieve economic development. It describes how 
difficult it is to estimate the future revenues 
because of volatile prices, territorial disputes, 
and insufficient seismological mapping. It 
continues with a discussion of the 'resource 
curse' - the difficulty of combining natural 
resources with economic development. Moreover, 
the particular challenges for Timor-Leste's 
development are dealt with at some length, as are 
possible ways to avoid the resource curse.

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