Timorese NGO calls for Budget focused on economic diversification and employment

A timorese non-governmental organization La’o Hamutuk expressed concern about public expenditure and the management of the Oil Fund and asked for a General Budget of the State (OGE) for 2027 to diversify the economy and create employment.

The Timorese Government presented in parliament an OGE for 2027 with a consolidated value of 2.568 million dollars (€2.18 billion), which prioritizes the oil sector, infrastructure and human capital.

In order to finance the 2027 OGE, the government intends to seek USD 1.350.4 million (about EUR 1.21 million) from the Oil Fund, a three times higher withdrawal from the Estimated Sustainable Income, which is around USD 540.5 million (EUR 483.8 million).

“ In the budget proposal, revenues continue to depend heavily on the Oil Fund,” says La’o Hamutuk.

“ Despite this, public expenditure continues to increase, including wages and salaries, and total expenditure is projected to grow by about 12% compared to the 2026 OGE”, the non-governmental organization continues in a press release.

Analysts from this organisation also express concern about the authorisation requested in the OGE 2027 bill to borrow up to $1.6 billion (€1.43 billion) to finance oil and gas related infrastructure and activities.

“La’o Hamutuk is concerned that budgetary priorities continue to focus on oil activities and the Greater Sunrise project, as productive sectors such as agriculture, fisheries, tourism, manufacturing industry and small and medium-sized enterprises continue to lack adequate investment,” laments the non-governmental organisation.

In the statement, La’o Hamutuk also questions the economic viability, financial return and impact of the Tasi Mane project and other oil activities, stressing that “sustainable benefits for the economy and the population remain unclear.”.

Tasi Mane is a project that provides for the construction of infrastructure to develop the oil industry and that includes a logistics base, a refinery and a liquefied natural gas plant to be developed on the south coast.

The Ministry of Oil will receive USD 291.8 million (EUR 262.44 million), a substantial increase from 2026 when it received USD 128.5 million (115.5 million), according to the budget classification book of the State General Budget (OGE) of 2027.

That increase is justified by the development of oil projects, including the Kuda Tasi and Jahal fields, as well as the Greater Sunrise.

“La’o Hamutuk fears that such a high amount may pose a risk if institutions do not have the capacity to plan, execute and monitor projects with quality, transparency and responsibility,” he says.

In the statement, the non-governmental organization recommends the strengthening of fiscal sustainability and the management of the Oil Fund, the review of the public debt proposal, independent assessments of the Tasi Mane project, the prioritization of food security and the diversification of the economy and the creation of employment.