Open AccessTimor‐Leste economic survey: The end of petroleum income
Author(s) -
Scheiner Charles
Publication year - 2021
Publication title -
asia and the pacific policy studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 14
ISSN - 2050-2680
DOI - 10.1002/app5.333
Subject(s) - revenue , economics , context (archaeology) , economic policy , politics , diversification (marketing strategy) , development economics , oil reserves , petroleum , business , natural resource economics , economy , political science , finance , geography , paleontology , archaeology , marketing , law , biology
As Timor‐Leste nears the end of its petroleum‐exporting era, the transition to a sustainable economy has become even more challenging due to partisan political competition, disastrous flooding and the pandemic. This article describes the current economic context, and deteriorating trends. After a brief discussion of the political situation and the impacts of COVID‐19, it explores expenditure and income trends in recent state budgets, with a particular focus on dependency on oil and gas revenues and their investments, which pay for 80% of state spending and may run out within a decade. It then assesses in detail revenue prospects from current and future oil and gas activities, including Greater Sunrise and the planned Tasi Mane petroleum infrastructure project. The analysis shows that it is highly likely that resource revenue will continue to decline. Diversification is not an option; it is the only way forward.