Dili – The tiny, impoverished nation of East Timor is on the cusp of an economic explosion that will eclipse even China in terms of growth, a top UN economist said on Tuesday.

Jeffrey Sachs, a special adviser to the UN secretary general, told an audience at the National University of East Timor that the government needed to be smart about how it spent billions of dollars in oil and gas revenues.

"I want to make a prediction right here – you can hold me to it. Timor-Leste will grow faster between 2010 and 2020, economically... than China," he said in a public lecture, using the Portuguese form of the country's name.

The leading economist and global development expert, on a six-day visit, said Asia was catching up quickly with developed economies and East Timor, one of the poorest countries in the world, would ride the regional wave to greater prosperity.

"Timor-Leste will accomplish this kind of convergence over the next generation, so what's happening in Asia will happen in this country very powerfully," he said.

Sachs said that extreme poverty could be eradicated if the government focused on investment in human capital, infrastructure and developing sectors such as tourism and agriculture.

East Timor has been on a rocky road since formal independence in 2002. More than half of all children under five are malnourished and about 40 percent of the population lives below the poverty line.

Sachs said the government of Prime Minister Xanana Gusmao needed to inject oil and gas revenues, amounting to some $5 billion, into the economy.

"You need to invest in your own future, so rather than building up this big cash balance, better to use the funds to invest in infrastructure, human capital, agricultural modernization, hydrocarbon sector development and the other areas," he said.