A New Era? Timor-Leste after the UN

Is there a resource curse in Timor-Leste? A critical review of recent evidence

“…As Blunt (2009) puts it, government legitimacy in East Timor depended to a large extent on whether ordinary people felt at large that they received a fair share of the 'fruits of independence' in the form of income accruing from oil and other national assets. This climate of unrest and political instability had immediate repercussions for the economy with domestic investment falling to only 2% of GDP in 2006 and remaining subdued for a long period of time (being less than 20% until 2016) (Ingram, Kent, and McWilliam 2015).…”

“…A good overview of these complexities is discussed in a research paper by Peter Blunt (2009). Portuguese colonialism was not conducive to any economic growth process in the country and there was a very limited effort to extend education to the whole population of Timor-Leste; access to education was a privilege only for Portuguese settlers and urban elites and the literacy rate at the end of the Portuguese rule was close to only 10% (Ingram, Kent, and McWilliam 2015). The historical legacy of the Indonesian occupation was no better and created the later foundations of a rather inefficient and non-transparent public administration.…”

“…Various statistics suggests that Timor-Leste behaves as a rentier state. Domestic revenues from taxation in Timor-Leste are minimal compared to the non-tax petroleum revenues; domestic tax revenues accounted for 8.5% of government revenues in 2018 (Ministry of Finance 2018), which makes Timor-Leste the country with the third-lowest total tax rate in the world (Ingram, Kent, and McWilliam 2015). Nevertheless, this is still an improvement compared to previous years; in 2009, for example, tax revenues made up only 2% of total government revenues (Ministry of Finance 2011).…”

“…Elite members believe that they are entitled to a disproportionate share of public resources; the state pays for elite members to fly to overseas hospitals, whereas little investments are made in the national health sector. Roads and bridges in the capital city mostly used by VIP visitors are frequently repaved, unlike those located in rural communities (Ingram, Kent, and McWilliam 2015).…”

The transnational village in Timor‐Leste

“…I show how for the family I describe, and the community from which they come, circular labour migration to Australia under its Seasonal Worker Program (SWP) has become not so much a way out of the village, as a means for individuals to continue participating in its life from afar. In a small, isolated country where for two decades the idea of development has been mostly associated with top-down initiatives focused on the construction of infrastructure and the fostering of human and natural resources beyond its borders (see Kent et al, 2015), this is significant, perhaps suggesting a transition to a period where, through increased international connectivity, families in rural Timor villages are able invest in forms of development guided by their own needs rather than plans handed down from the capital. The work of the Timorese village today, like that of so many villages throughout the world, is increasingly (to borrow a term popularised by Levitt, 2001) 'transnational' work.…”