On Resource Curse

And how Timor-Leste went from a poster child in 2002 to a problem child ten years later thanks to its natural resources endowment in a commentary by Petroleum Economist.

"From 2008 to 2012, total government expenditures of $4 billion should have resulted in a much greater improvement in the quality of life of the country’s 1.1 million citizens. Yet, as inflation has surged from around 1% in 2005 to 11% last year, the percentage of people living below the poverty line increased, hitting 52% in 2011, up from 36% in 2001, a government source says, citing an unpublished report. The UN says the extent of poverty is even more severe: 68% of the population, about 748,000 people, suffers multiple deprivation, while a further 18% – 198,000 people – are vulnerable. Health and education spending is low, with just 3.3% of last year’s $1.8 billion budget allocated for health care, and 7.1% for education. On the UN’s human development index, Timor-Leste ranks 147th out of 187 nations, below Pakistan and Bangladesh, and well below the regional average. Malnutrition rates are high. According to non-government organisation Save The Children, 54% of children under five are stunted due to malnutrition, up from 40% in 2002 – and the third highest rate in the world after Niger and Ethiopia."

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