Why Does Timor-Leste Remain Fragile? A Resource Dependence Explanation

Abstract

This article focuses on the concept of fragility, which gained prominence in literature on conflict-driven countries and serves as an analytical tool for policy analysis. Using this concept, this article provides a review of Timor-Leste since its independence in 2002. The country has achieved high economic growth, though the economy has remained fragile in terms of its high dependence on external factors, namely oil revenues. This study suggests that foreign aid and investments do not automatically improve fragility in resource-dependent economies unless they help diversify the monoculture economy, based upon democratic consensus-building among stakeholders.