by Cosme da Costa Araujo
The empirical findings show that the institutionalized practices that government has adopted and implemented are influenced by the internal and external factors which taken place through coercive, mimetic and normative pressure. Timor-Leste reliance on petroleum revenues, the uncertainties associated with petroleum activities, the mandatory financial reserved put forward by the Constitution, learning from the mistake of resource curse and the success story of Norwegian model and with the help of IMF and other organizations and experts; all these factors influence Timor-Leste to institutionalizes the followings approaches; establishing Petroleum Fund Law and Petroleum Fund, investing the Fund in financial market and non-oil sector i.e. education, health, infrastructure and agriculture.
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This research seeks to given an understanding of and answers to the question of how does Timor-Leste central government approach sustainability with respect to its petroleum revenues. In the context of Timor-Leste, sustainability is often associated with inter-generational equity and the avoidance of resource curse. Institutional theory and MCS package are two theoretical frameworks to help building the understanding of how Timor-Leste government approaches sustainability.
The empirical findings show that the institutionalized practices that government has adopted and implemented are influenced by the internal and external factors which taken place through coercive, mimetic and normative pressure. Timor-Leste reliance on petroleum revenues, the uncertainties associated with petroleum activities, the mandatory financial reserved put forward by the Constitution, learning from the mistake of resource curse and the success story of Norwegian model and with the help of IMF and other organizations and experts; all these factors influence Timor-Leste to institutionalizes the followings approaches; establishing Petroleum Fund Law and Petroleum Fund, investing the Fund in financial market and non-oil sector i.e. education, health, infrastructure and agriculture.
All these aforementioned institutionalized practices are argued to help Timor-Leste to achieve sustainability of petroleum revenues and hence the avoidance of resource curses. The evidence also shows the importance of reporting mechanisms i.e. budget and financial reports as management control tools to direct efforts towards the goal and to hold government accountable by measuring its performance. Budget is the most important of all prevailing controlling mechanisms. In doing so, it functions as planning and controlling mechanism. However, the effective of these reports are remained to be seen and is not covered in this research. This is what further research in Timor-Leste approach towards sustainability can be dealt with. A comparative study between Timor-Leste and Norway is also recommended for future research to look at.
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