Breaking the Resource Curse
PIC CAP Jen Chao with Timor-Leste Prime Minister Xanana Gusmao NEW YORK It is known as the resource curse, a paradox where countries rich in oil, gas, and extractive minerals are unable to translate such wealth into sustainable development, and instead are roiled by poverty, poor health, and rampant corruption. The country of Timor-Leste, also known as East Timor, has an abundance of oil and gas, as well as an opportunity to put in place mechanisms to spend the revenue that flows from it responsibly. Toward that end, it has enlisted the Vale Columbia Center on Sustainable International Investment (VCC) at Columbia Law School to help ensure its resources lift up the nation and create a vibrant, diversified economy based on the well-being of its people before the resources run out. “Timor-Leste has the development indicators of a country with extreme poverty, like some of the highest rates of malnutrition and maternal mortality, but they have a $7 billion oil revenue account,” said Lisa Sachs, the VCC’s Associate Director. The VCC received an $800,000 grant from the Open Society Institute last year to promote integrated development in Timor-Leste in collaboration with the Revenue Watch Institute. Experts from the Earth Institute at Columbia University are also involved in the project, which is being managed by the VCC. Timor-Leste offers a rare opportunity, in that it is a small country of one million people, still in the nascent stages of government and institution-building. Timor-Leste only gained full independence in 2002, after four centuries of colonial rule by Portugal and a quarter-century of often-violent occupation by Indonesia. Oil revenues to Timor-Leste first came on line only in 2005. “To put it in the most dramatic terms, if the international community cannot support Timor’s sustainable development, something is going […]