Oiling the Rigs of State-Building: A Political Settlements Analysis of Fiscal Governance in Timor-Leste

Dr Dahlia Simangan1, Dr Srinjoy Bose2

1Hiroshima University, Higashi-Hiroshima, Japan, 2University of New South Wales, Sydney, Australia

The transitional period in Timor-Leste witnessed the political importance of the extractive industry. Petroleum and gas revenues financed a large part of the national budget and were, therefore, crucial for the country’s economic trajectory. The government established the Petroleum Fund in 2005 to prevent the economy from plunging into the “resource curse,” but the management of the Fund has since become a source of controversy as it created opportunities for corruption and unsustainable spending practices. These governance issues, coupled with falling oil prices and declining production, pose challenges for an oil-dependent country in planning for economic diversification and sustaining political development. This study asks how the political dynamics in the management of petroleum revenues helps or hinders the process of statebuilding in Timor-Leste. To answer this, we examine the relationship between the political processes of statebuilding and economic democratisation in Timor-Leste using the Political Settlements Analysis (PSA) framework as an analytical tool. Specifically, we analyse how political settlements produced by bargaining, exchange, and (re)negotiation influence fiscal governance of the petroleum revenues, and consequently the economic development of Timor-Leste.


Dahlia Simangan is an Assistant Professor at Hiroshima University in Japan. Her research interests lie at the intersection of peace/conflict and environmental sustainability. Her book, International Peacebuilding and Local Involvement: A Liberal Renaissance? (Routledge 2019), includes a review of United Nations peacebuilding in Timor-Leste.

Srinjoy Bose is Lecturer in Politics & International Relations at UNSW, Sydney. He researches topics in critical peace/security studies including, political order and violence, state formation, and the political economy of statebuilding and peacebuilding in ‘fragile’ states and societies. He is co-Editor of Hybridity in Peacebuilding and Development (Routledge, 2019) and Afghanistan – Challenges and Prospects (Routledge, 2017).



The Asian Studies Association of Australia (ASAA) is the peak body of university experts and educators on Asia in Australia. Established in 1976, we promote and support the study of Asia in Australian universities and knowledge of Asia among the broader community. Our membership is drawn mainly from academics and students, but also includes industry and government Asia experts. We take a strong interest in promoting knowledge about Asia in schools and in contributing to state and Commonwealth government policies related to Asia. We provide informed comment on Asia to a broad public through our bulletin, Asian Currents, and specialist research articles in our journal, Asian Studies Review. Four book series published under our auspices cover Southeast Asia, South Asia, East Asia and Women in Asia.

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