THE OIL RESOURCES OF TIMOR-LESTE: CURSE OR BLESSING?

Mats Lundahl () and Fredrik Sjoholm ()
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Mats Lundahl: Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

No 229, EIJS Working Paper Series from The European Institute of Japanese Studies

Abstract: Timor-Leste is among the youngest nations in the world. It started 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 of large help in Timor-Leste’s strive 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.

Keywords: Timor-Leste; Oil; Resource Curse; Economic Development (search for similar items in EconPapers)
JEL-codes: L71 O13 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene
Date: 2006-10-01
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:eijswp:0229

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