East Timor’s only shot
Barely six years old, the country’s sovereign wealth fund is ranked as the third best-run in the world and already has $3 billion under management, growing at $180 million a month. But its cautious approach to investment is proving frustrating in one of the world’s poorest countries. Chris Wright reports.
PICTURE TWO COUNTRIES. One has an infant mortality rate of almost 10% and a male life expectancy of 47, while 40% of the population lives under the poverty line. The other has $3 billion in a burgeoning sovereign wealth fund fuelled by oil and natural gas reserves, a figure that will reach $20 billion before long even if market conditions deteriorate. East Timor is both of these places at the same time.
There is surely no country in the world where the sovereign wealth fund is so crucial to the future, the very sustainability of its people’s existence. East Timor is the world’s newest nation, a sovereign state since just 2002, and its oil and gas fields in the Timor Sea really are its only shot. The government estimates $1.39 billion in revenues for 2008 – all but $27 million from oil and gas.
