East Timor to use oil fund to stablise prices

DILI, May 29 (Reuters) – East Timor will use a fraction of its oil fund worth over $2 billion to protect the poor from rising food and fuel prices, Prime Minister Xanana Gusmao said on Thursday.

Gusmao said he would take three percent from the fund to stabilise prices and to import rice, fuel and construction materials. The oil fund was created from revenue earned from the country’s oil and gas sector in 2005 in order to amass money for future generations of Timorese.

Gusmao said the government decided to use a portion of the money, which is deposited in a U.S. bank, because some countries had not made good on their promises to provide aid.

“We are ashamed if we keep asking donors to give us money to resolve our problems,” he told reporters. “Sometimes they renege on their promises.”

East Timor, one of the world’s poorest countries, is vulnerable to rising food prices in the international market because it relies on imports for nearly 60 percent of its rice needs.

Indonesia occupied East Timor for 23 years before the former Portuguese colony voted in favour of independence in a United Nations-sponsored ballot in 1999.

As Asia’s youngest nation, the country is still struggling to achieve stability despite its rich oil and gas resources. (Reporting by Tito Belo; Writing by Ahmad Pathoni; Editing by Valerie Lee)

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