Some are concerned that the country is overly dependent on its oil and gas sector.

Questions have emerged over the performance of East Timor’s Petroleum Fund, reviving discussion about whether the country is suffering from a “resource curse” caused by an over dependence on oil revenues.

East Timor’s Central Bank published a report shows net cash inflows of $177 million for the fund in its most recent quarter, a modest figure which the Timor-Leste Central Bank said reflected “payments to the state budget.” However, local non-governmental organization Lao Hamutuk, which has been monitoring the growth of the Oil Fund since 2005, has insisted that it is more accurate to state that the total fund actually decreased, from $16.634 billion at the beginning of the quarter to $16.584 billion at the end of September.

What’s the reason for the $50 million drop? Lao Hamutuk agreed with the Central Bank that the $340 million withdrawn from the fund to finance state projects accounted for the bulk of the decrease. But it added that the fund also suffered foreign exchange losses amounting to $276 million during the quarter. If that is accepted, then for the first time, East Timor’s income from oil and gas operations did not exceed the expenses related to the Oil Fund.

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