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Reducing Poverty in Timor-Leste through Stimulating Growth and Structural Change

Author

Listed:
  • Rajah Rasiah

    (Faculty of Economics and Administration, University Malaya. , 43400 Serdang, Selangor, Malaysia)

  • Zhang Miao

    (Institute of China Studies, University of Malaya)

Abstract

This paper discusses Timor-Leste’s capacity to engender the conditions for rapid growth and structural change to escape the poverty trap. While natural resources offer the foreign exchange to finance economic progress, Timor-Leste shall have to break out from the Dutch disease to sustain this process. The evidence shows that Timor-Leste is facing a trend fall in cereal yields in the agricultural sector while oil and gas continue to be the prime contributors to its GDP growth. In addition, with the incidence of poverty rising over the last decade and child mortality and life expectancy rates falling very slowly, Timor-Leste is very much stuck in a whirlpool of poverty. The paper presents a stylised framework to assist the Timor-Leste government to engender the conditions that would stimulate rapid growth and structural change in the non-natural resource sectors through a focus on knowledge-based activities targeted at the productive sectors of agriculture and manufacturing in order to save the country from being strangled by the resource curse.

Suggested Citation

  • Rajah Rasiah & Zhang Miao, 2015. "Reducing Poverty in Timor-Leste through Stimulating Growth and Structural Change," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(3), pages 39-66, October.
    • Handle: RePEc:umk:journl:v:7:y:2015:i:3:p:39-66
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    More about this item

    Keywords

    Petroleum; Poverty; Structural Change; Timor-Leste;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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