Time Magazine Ramos Horta4 Sep 2024 19:52
It’s a curious viewpoint for a life-long human-rights defender, though perhaps unsurprising given Timor-Leste’s current predicament and Beijing’s swelling regional clout. With every passing year since independence, Dili has become ever more addicted to easy oil and gas revenue, stymieing attempts to diversify the economy. Today, the Petroleum Fund contributes to 85% of government spending, meaning consumption has taken precedence over production—dubbed the “Dutch disease” or “resource curse”—while entrenching structural issues such as low productivity and an inefficient bureaucracy.
Asked about weaning Timor-Leste away from its resource dependency, Ramos-Horta replies that “all the positive changes [in the country] had to do with our investing petroleum revenues.” He also points to the shiny new Hilton hotel about to open in Dili as evidence of efforts to seed a nascent tourism industry. Yet the fact remains that Timor-Leste’s two primary revenue streams—the Kitan oil and Bayu-Undan gas fields—are virtually depleted, with next year’s revenues projected to be near zero. Instead of just spending the Petroleum Fund’s interest, as intended, the national budget relies on spending the capital, meaning at current rates the fund will be exhausted by the early 2030s. The aspirant petrostate has essentially run out of gas.
With efforts to diversify the economy floundering, Timor-Leste is banking on more petrodollars via the $50 billion Greater Sunrise gasfield—mooted as one of the world’s largest untapped reserves—that lies between it and Australia. However, despite a 2018 resolution with Canberra settling Greater Sunrise’s ownership the two sides remain deadlocked over Dili’s insistence on pumping the gas across a deep-sea trench to be refined at an as-yet-unconstructed facility, dubbed Tasi Mane, on its southern coast. Australian partner Woodside Petroleum, meanwhile, wants to just pump the gas via an existing pipeline to its facilities in Darwin and has offered preferential royalties—80/20 instead of 70/30—to do so.
“Even if the Tasi Mane project is built, it will not employ many people,” says Charles Scheiner, a researcher for La'o Hamutuk, a Dili-based NGO for development monitoring and analysis. “The jobs that Timorese are likely to get would be clearing land, mopping floors and doing laundry for the international staff.”
Yet Ramos-Horta and Prime Minister Xanana Gusmão—a former revolutionary comrade—have invested enormous political capital into local refining, with Gusmão in particular seeing Tasi Mane as his personal legacy. “For him to now say, ‘sorry, that was a terrible mistake,’ would be an incredible loss of face and make it difficult for him to politically survive,” says Damien Kingsbury, an emeritus professor at Australia’s Deakin University. There’s even a chance that Timor-Leste could back Tasi Mane itself, an all-or-nothing bet that would empty the Petrole
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