DILI, 19 October 2011 (IRIN) – A new bill allowing more diversified investments by Timor-Leste’s multi-billion dollar oil and natural gas sovereign fund, which underwrites the lion’s share of the country’s expenditure, has divided opinion, with some saying the step is necessary to maintain current levels of development spending and others calling the move risky.
The amendment, passed by parliament in late August and recently approved by the president, allows for up to 50 percent of the Petroleum Fund, currently exceeding US$8.7 billion, to be invested in equities, including up to 5 percent in other forms of investments.
Under the previous law, all but 10 percent of the fund had to be kept in US-dollar-denominated government-issued bonds, which traditionally have been a safe but low-return investment.
Timor-Leste is little more than a decade out of a violent 1975-1999 occupation by Indonesia, during which an estimated 180,000 people were killed, hundreds of thousands were displaced, and the country’s infrastructure was left in ruins.
For more on this story, visit: IRIN Asia | TIMOR-LESTE: Observers divided over oil fund investment | Timor-Leste | Aid Policy | Economy | Governance.