East Timor's historical ties to Indonesia -- the sponsor of a 24-year military occupation -- makes one wonder if it'll follow in Jakarta's footsteps. From all appearances, Gusmao intends to create competitive industries and diversify his economy. For good reason: Oil and gas will bring few jobs or businesses. The production is offshore and will be piped through a processing plant in Australia.
"We have to be careful we don't create a situation with no return," Chief Minister Mari Alkatiri told Bloomberg in Dili. "We need to avoid being a petroleum-dependent country."
Attracting foreign investment will be key. For now, East Timor is subsisting on international aid for everything from money to security to expertise. But looking ahead, officials in Dili have decided that an open economy will do the nation more good than bad. Decades ago, developing nations adopted protectionist polices. East Timor seems to know better.
Already, there's movement afoot to create an infrastructure -- laws, capital markets, financial transparency -- to pull in vast sums of foreign money. Sticking with market-oriented ideas could get East Timor a long way toward its goal of stability and prosperity.
It may be the surest way for the nation to reduce the crushing poverty hovering over it. It also could help East Timor avoid falling prey to the "paradox of plenty."
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