|Brunei Update | March 12, 2019
Authors: Kim Yaeger, Artha Sirait and Stephanie Purwanto
|THE COUNCIL'S TAKE|
Brunei Government Proposes B$5.86 Billion Budget to Legislative Council
At Brunei's 15th Legislative Council session, the government proposed a 2019/2020 budget of B$5.86 billion, stressing the urgent need for more investment into Brunei. During the session Minister of Finance and Economy II, YB Dato Dr Hj Mohd Amin Liew noted that Brunei’s GDP posted just 0.1 percent growth in 2018 due to a contraction in the oil and gas sector. However, the non-oil and gas sectors saw positive growth of 0.5 percent, supported by the agriculture industry, livestock, wholesale and retail sector. Dato Amin also highlighted that Brunei needs to intensify its diversification efforts in the following sector: downstream oil and gas; food manufacturing; tourism; services and ICT – in which the government spending will be aligned with.
The Legislative Council which is Brunei’s annual parliamentary session was chaired by Speaker YB Pehin Orang Kaya Seri Laila Dato Seri Setia Hj Abdul Rahman Dato Setia Hj Mohamed Taib and comprised of 36 members including Sultan Hassanal Bolkiah, Senior Minister at the Prime Minister’s Office Crown Prince Al-Muhtadee Billah, the 14 cabinet ministers and 20 appointed members which include state dignitaries, grassroot leaders and representatives from various professional, social and religious groups. The Legislative Council is still ongoing with an approved budget predicted to be announced by the end of next week.
Brunei Established ICT-focused Body Under Ministry of Transport and Info-Communications
Brunei recently established its Digital Economic Consult under the purview of the Ministry of Transport and Info-communications to lead and drive Information and Communication Technologies (ICT) development in the sultanate. Minister of Transport and Info-communications, Abdul Mutalib stated that it is important for Brunei to provide necessary telecommunications infrastructure and a stable telecommunications service to keep up with the fourth industry revolution. In February, Brunei announced that it will consolidate network infrastructure of all existing telecommunication operators in the country under a newly formed company to spur the development of the ICT sector in the country. ICT is identified as one of the non-oil and gas sectors that Brunei is seeking to develop in an effort to diversify its economy.
Strengthened Relations Between Brunei and Malaysia
On March 5, Malaysia’s Prime Minister Mahathir Mohamad and Brunei’s Sultan Hassanal Bolkiah met at the Annual Malaysia-Brunei Leaders’ Consultation framework in Kuala Lumpur. The two leaders discussed an array of bilateral issues, as well as regional and global concerns of interest to Malaysia and Brunei. Both leaders agreed on the importance of economic cooperation to promote industries such as transportation, info-communications, energy, tourism, and agriculture. Last year, the meeting took place in September where the two leaders met in Bandar Seri Begawan to discuss the Pan-Borneo highway and the issue of a joint-commercial development of offshore oil blocks in South China Sea. In comparison this year, the two leaders discussed a broader range of issues.
Malaysia will put forth a Memorandum of Understanding (MoU) related to fisheries cooperation and transportation. This is expected to strengthen Brunei’s fishing and transportation industries. When the Council met with Dato Amin Liew bin Abdullah (Minister at the Prime Minister’s Office, Minister of Finance and Economy II, and Chairman of Brunei Economic Development Board) in January, he stressed that fisheries and aquaculture are sectors that Brunei is interested to develop further. Brunei aims to export as well as it helps to create job opportunities for local Bruneians. As an effort to support this initiative, government-linked companies are actively assisting SMEs so that they are exposed to broader spectrum in the sector.
The two leaders also discussed a potential Commercial Arrangement Areas Agreement to strengthen both nations’ oil and energy sectors through a partnership between Petronas and PetroleumBrunei.
His Majesty and the Prime Minister also expressed satisfaction in the strengthened relationship between Brunei and Malaysia in the past few years, and both agreed to maintain the relationships. This continued collaboration will further bolster Brunei’s crucial industries and showcases Brunei’s willingness to welcome foreign investments and partnerships. On international trade agreements, during USABC’s Business Mission to Brunei in January, Brunei’s Minister of Foreign Affairs II, Dato Erywan stated that Brunei is in the process of making sure that its local laws are aligned with the Comprehensive and Progressive Partnership for Trans-Pacific Partnership to ensure that once ratified, Brunei can be compliant.
Brunei to Increase Business Competitiveness
His Majesty Sultan Hassanal Bolkiah laid out his vision to make businesses more competitive in the sultanate. Brunei’s Department of Economic Planning and Development (DEPD) maintains that the oil and gas sector currently account for 57.3% of the nation’s economy but that Brunei is eager to continue its diversification efforts.
Brunei’s improvements in the World Bank’s Ease of Doing Business (EODB) rankings over the past four years reflect the serious commitment of Brunei towards creating a pro-business environment that would enable further diversification of the Brunei’s economy. The 2019 EODB Report records Brunei Darussalam to rank 55 out of 190 economies worldwide – which marks the fourth consecutive year Brunei has improved its ranking. Five years ago, Brunei was ranked 105th, before making the annual ranking’s largest jumps in 2017 and 2018 by moving up 41 places cumulatively. Within ASEAN, only Brunei Darussalam and Malaysia recorded improvements in EODB ranking, and Brunei maintained its fourth position behind Singapore (2), Malaysia (15) and Thailand (27). Brunei also moved up two places to 62 out of 140 economies in the recent World Economic Forum’s Global Competitiveness Report 2018 which features a new methodology that takes stock of the fourth industrial revolution.
Brunei’s Ease of Doing Business Secretariat stated in a press statement that the Brunei government would strive to improve its business ecosystem as it looks to diversify its economy. As the Council previously reported that Brunei has identified the following sectors which the sultanate is looking to further develop:
|IN THIS UPDATE|
|Multilateral Trade Agreements
Brunei, Korea sign three agreements vowing deeper cooperation The Scoop 12th Mar 2019
What’s in the New Brunei-New Zealand Defense Dialogue? The Diplomat 12th Mar 2019
Youth key to Brunei’s development The ASEAN Post 12th Mar 2019
Brunei to continue attracting foreign direct investments: minister Xinhua 10th Mar 2019
Industry 4.0 initiatives to help develop Brunei Digital Economy Borneo Bulletin Online 10th Mar 2019
Government, private sector need to intervene in Brunei’s unemployment issue The Scoop 9th Mar 2019
Brunei establishes new organization for "smart nation" development Xinhua 12th Mar 2019
BRUFA pays courtesy call on Royal Customs and Excise Dept Borneo Bulletin 4th Feb 2019
Singapore-Brunei Defense Ties in Focus with Army Exercise The Diplomat 14th Feb 2019
Malaysia-Brunei Military Relations in the Headlines With Air Force Chief Visit The Diplomat 12th Feb 2019
Malaysia, Brunei express satisfaction over oil and gas collaboration Star Online 5th Mar 2019
Slew of cooperation on the cards between Malaysia and Brunei New Straits Times 5th Mar 2019
Youth urged to look at agriculture as important career option Borneo Bulletin 19th Feb 2019
Brunei Sultan calls for more measures to raise rice production - Xinhua | English.news.cn Xinhua 13th Feb 2019
Temburong visit bolsters students’ skills in agricultural entrepreneurship Borneo Bulletin 10th Feb 2019