Australia, Banking, East Timor, Economics, Featured Work, Indonesia, Infrastructure, Politics, Sovereign Wealth Funds, commodities - Monday, September 1, 2008 22:29 - 0 Comments

East Timor: the world’s most important sovereign wealth fund?

Euromoney, September 2008

Picture two countries. One has an infant mortality rate of almost one in 10, a male life expectancy of 47, and 40% of the population in poverty. 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 in the worst case scenario. The curiosity of East Timor is that it is both of these places at the same time.

There is surely no country in the world where the sovereign wealth fund is so utterly key to the future of the country, the very sustainability of its people’s existence. The world’s newest nation, a sovereign state since just 2002, its oil and gas fields in the Timor Sea really are its only shot. Consider this: the government estimates $1.39 billion in revenues for 2008 – all but $27 million of it from oil and gas. Coffee, the second-ranked contributor, accounts for $8 million, 170 times less. Continue…

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