ETimor budget review endangering oil fund
Updated
East Timor's finance minister, Emilia Pires, has faced parliament to argue for a mid-year budget review.
The government is proposing to more than double the December budget to $US774 million, most of it from the petroleum fund.
As Radio Australia's Karon Snowdon reports, the petroleum fund is regulated to finance East Timor's budgets well into the future.
The mid year budget review argues that increased revenues from high oil prices justifies using more of the fund to subsidise food and fuel prices, and to kickstart some large projects.
Charlie Scheiner from the Institute for Development Monitoring and Analysis, or La'o Hamutuk, says the scheme jepardises the sustainability of the country's only source of income.
"Spending money, oil money as fast as you can when there's alot of it, is a classic recipe for the resource curse which afflicts countries which depend on petroleum revenues," he said.
"So when the oil is stopped there's no way to maintain those levels of expenditure, so you either get massive borrowings or you get social chaos inside the country."
