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DILI: Timor Leste's Prime Minister Xanana Gusmao pledged on Wednesday to invest more of the tiny country's oil wealth to boost economic growth and living standards.
Gusmao told international donors at the country's eighth annual development partners meeting that "the people need us to create conditions to improve their livelihoods".
"The people do not need cash in American banks to help pay American deficits. President Obama doesn't need our five billion dollars," he said.
The former freedom fighter was in fiery form as he denounced the country's previous policy of saving money derived from oil and gas reserves.
"If the needs of the country require fast and sustainable growth, we have to invest in basic infrastructure, and for this to be possible, we need to unblock the mistaken policy of savings in order to invest those revenues in the best way," he said.
"The people of Timor Leste need the money here to be invested in human capital, in agriculture, in industry, in infrastructure and in social services such as education, health and assistance to the most vulnerable ones," Gusmao added, referring to the country by its formal name.
The meeting was attended by representatives of foreign governments, the United Nations, the Asian Development Bank, the Catholic Church and civil society groups.
Timor Leste has a population of around 1.1 million people and remains heavily dependent on international aid eight years after achieving formal independence from Indonesia.
But it is constrained by laws designed to ensure fiscal responsibility to withdraw only three percent of its petroleum wealth each year, meaning the money is piling up mainly in the form of US bonds.
The new commitment to investment comes a week after Jeffrey Sachs, a renowned US economist and special adviser to the UN secretary-general, visited Dili and urged the government to rethink the way it uses its oil wealth.
Ameerah Haq, special representative of the UN secretary-general for Timor Leste, voiced her support for Gusmao's proposed belt-loosening and said it was important to wean the economy off oil-based development.
"In this regard, I agree with Professor Sachs that there should be bolder, yet fiscally responsible, withdraws from the Petroleum Fund, to invest more heavily in human capital and productive physical assets to support strong socioeconomic development in the years to come," she said.
Besides the legal restraints other barriers to increased spending include a dearth of human resources to complete major projects.
World Bank Country Director Ferid Belhaj said the government could do worse than invest part of the oil revenues in education to increase the capacity of future generations.
"Investing in them, in their health and in their education, will prove to be the best return on the dollar that this government can make," he said.
"These are long-term investments, with secure high rate of returns. These are investments that need to be made now."
The Development Partners Meeting is the beginning of four days of high-level talks in Dili. - AFP/de
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