Jakarta, Indonesia – East Timor’s president-elect gained the Nobel Peace Prize in 1996 for his efforts to liberate his nation, however Jose Ramos-Horta might discover charting a sustainable path for one of many world’s most oil-dependent nations to be his hardest problem but.
Ramos-Horta, who might be inaugurated on Friday, beat the incumbent Francisco Guterres – popularly often called Lu-Olo – in a second-round runoff final month, claiming 62.1 p.c of the vote. Ramos-Horta, a former president and prime minister, had the backing of the Congresso Nacional de Reconstrucao de Timor (CNRT) social gathering as a result of he would “not oppose” the social gathering’s plan to develop the Better Dawn oil and fuel fields.
The federal government of East Timor, often known as Timor-Leste, owns a controlling stake within the untapped fields, which lie within the Timor Sea between the Southeast Asian nation and Australia, however insists any assets should cross a deep seabed trench to be processed on Timorese soil, which has stalled growth.
Neighbouring fields within the Timor Sea, often called Bayu-Undan, contribute the overwhelming majority of the wealth in East Timor’s $19bn sovereign petroleum fund, which funds about 85 p.c of presidency spending.
The massive proportion of state spending drawn from petroleum revenues makes East Timor one of many world’s most oil-dependent nations. The Southeast Asian nation, which voted to go away Indonesia in 1999 and have become an impartial nation in 2002 after a United Nations transitional administration, additionally ranks among the many area’s poorest nations, with a gross home product (GDP) per capita of lower than $1,500.
Specialists imagine the “nearly-depleted” Bayu-Undan fields have already contributed 99 p.c of the income East Timor can anticipate to obtain and can run dry inside 10 to fifteen years.

Guteriano Neves, an impartial coverage analyst primarily based within the Timorese capital Dili, stated the over reliance on oil and fuel revenues has hindered the event of non-oil sectors and made the nation weak to financial shocks.
“The trail that Timor-Leste is taking is a really harmful and unsustainable path, but it is vitally difficult to vary the course,” Neves instructed Al Jazeera.
“The economic system that extremely will depend on petroleum … doesn’t set off home demand; it doesn’t assist the home economic system to develop. It’s unsustainable to develop on a single sector, notably to rely upon a non-renewable useful resource like petroleum.”
Whereas the extremely worthwhile Bayu-Undan fields have helped the petroleum fund earn $32bn in revenues and funding returns since 2005, East Timor produces far fewer assets than different exporters within the area: neighbouring Indonesia had greater than 300 instances as a lot oil and fuel reserves at hand in late 2019.
Neves stated the nation is “following the tendency of the useful resource curse.”
“This manifests in unsustainable spending, misguided coverage pushed by satisfying quick wants over long-term growth, poor high quality of public service, varied types of inequality and low productiveness of [the] non-oil sector,” he stated. “Timorese are conscious of those and [have tried] to mitigate by way of varied coverage measures… however as we are saying, the temptation is larger than the intention.”
Ramos-Horta ran in final month’s election as an impartial candidate with the backing of CNRT, which has lengthy supported the Better Dawn growth and expects Ramos-Horta as president to endorse the laws required to allow onshore processing.
The viability of processing the fields’ assets in East Timor is extensively thought of unsure, and financing onshore growth would price virtually all the petroleum fund.
But Ramos-Horta and his backers have expressed curiosity in creating Better Dawn towards the needs of the outgoing authorities, which in East Timor’s semi-presidential system carries higher decision-making energy than the president. Ramos-Horta’s workplace was not accessible for remark in time for publication.
East Timor politics professional Michael Leach stated that whereas the president’s coverage powers are restricted, the power to veto laws – which in some instances can solely be overturned by gaining a tough two-thirds majority vote in parliament – is important.
“The presidential veto is sort of a considerable energy,” Leach instructed Al Jazeera.
“If a president was towards Better Dawn they might actually veto a finances financing its growth. These vetoes may be reversed by parliament, however some reversals require a two-thirds majority, which isn’t straightforward to mobilise.”
Political dispute
CNRT withdrew from the governing coalition in 2020 following a long-running dispute over ministerial appointments and has described the present Fretilin party-led authorities as illegitimate.
The social gathering’s help of Ramos-Horta’s presidential marketing campaign hinged on its controversial request for the candidate to dissolve parliament and name an early election – which CNRT believes it will win – or use his victory as proof of no confidence within the present authorities and a mandate for the president to reconfigure the governing alliance within the present parliament to favour the social gathering.
Leach warned towards conflating CNRT’s help of Ramos-Horta with the president-elect’s personal agenda.
“If folks suppose Ramos-Horta goes to be a easy puppet of CNRT, they’ll be disenchanted,” he stated.
“In fact, CNRT was his chief backer and he’ll be aware of that, however he’s formally an impartial, and he’s a senior Timorese chief of nice standing, and the president’s position is to control for all Timorese. He additionally has to convey the entire nation collectively, which requires session with all events.”
Joao da Cruz Cardoso, a Dili-based impartial analyst who focuses on sustainable growth in East Timor, stated the federal government ought to prioritise funding in non-oil sectors, together with training, tourism, agriculture and manufacturing, however an absence of political will has made change tough.
“[There is] an absence of political incentive, a minimum of within the quick time period, to develop the non-oil sectors of the economic system,” Cardoso instructed Al Jazeera.
Cardoso stated the worldwide shift away from fossil fuels supplied East Timor with a window of alternative to maximise positive aspects from its assets and develop its non-oil economic system “earlier than time runs out”.
“Timor-Leste understands the significance of diversifying its economic system, however recognises that it is vitally tough factor to do,” he stated.