Diversity drive: Page 18

Diversity drive

Page 18

Government revenues have declined as a result of the global oil market slowdown, and the 2016/17 budget reflects this. However, moves to increase foreign investment and support economic diversification also factor into the government’s spending plans, with non-oil growth becoming increasingly critical, as evidenced by allocations to education, infrastructure, and research and development.

SNAPSHOT

6 Brunei Darussalam in figures 

 COUNTRY PROFILE

10 A new direction: Economic diversification and the development of human capital are central to plans going forward 

13  Traditions and change: Fusing a conservative approach with economic development

16 Interview: Le Luong Minh, Secretary-General, ASEAN

ECONOMY

18 Diversity drive: Two mega-projects and investment in the non-energy sectors aim to broaden the economy and impact GDP growth 

23 Effective measures: Reforms in the Sultanate saw its World Bank ease of doing business ranking rise in 2016

 25 Interview: Dato Mohd Amin Liew Abdullah, Deputy Minister, Ministry of Finance; and Chairman, Brunei Economic Development Board (BEDB)

26 Viewpoint: Andrew Robb, the Australian Government’s Special Envoy for Trade

27 Rationalising costs: With reduced oil and gas revenues, the Sultanate is reforming the public sector and diversifying its economy

Targeted approach 

Page 31

Brunei Darussalam maintains a trade surplus, but exports contracted in 2015, and the outlook for 2016 is subdued. The Sultanate’s diversification measures continue, with manufacturing and industrial exports set to increase their contribution to total trade in the coming years. A series of regulatory reforms are also under way as authorities move to attract new FDI in strategically important industries.

TRADE & INVESTMENT

31 Targeted approach: Regulator reforms are under way to attract foreign investment in key industries 

35 Interview: Cecilia Malmström, European Commissioner for Trade

36 Economic benefits: A new trade agreement is expected to underpin diversification efforts

Plan of action

Page 39

Hydrocarbons continue to dominate the economy, but with oil and gas prices at a sustained low, significant strain is being placed on expenditure and investment. Despite this, ongoing upgrades to existing production coupled with government efforts to diversify into renewable energy are expected to support long-term expansion and attract investment.

ENERGY

39 Plan of action: A changing marketplace has led to a host of initiatives spearheaded by both the government and the private sector

47 A natural leader: Partnerships with major international oil companies have helped the country cope with a fall in natural gas prices 

49 Neighbourly relations: By working with its ASEAN partners the Sultanate is identifying new avenues for growth and collaboration

51 Waste not, want not: Subsidies have long been a staple, but the government is encouraging its citizens to reduce consumption 

53 Embracing renewables: Confronting the reality of climate change has become a priority

INDUSTRY

56 Turning tides: New strategies should lead to expanded opportunities

60 Halal growth: A new development cluster will unlock local potential

Making headway

Page 62

The country’s small but significant banking sector has remained remarkably healthy throughout the global economic downturn, boasting total assets of $12.1bn as of December 2015. While consolidation has led to a drop in lenders, a trend that is likely to continue, the country’s banks remain some of the strongest in the region, with high levels of liquidity and well-managed non-performing loans. Islamic banks are key to the country’s economy and have overtaken their conventional rivals in popularity, a feature that makes the Sultanate’s banking sector unique among its Asian peers.

BANKING

62 Making headway: Ongoing changes are improving standards in the sector

67 Interview: Yusof bin Haji Abdul Rahman, Managing Director, Autoriti Monetari Brunei Darussalam (AMBD)

68 Interview: Pierre Imhof, CEO, Baiduri Bank

69 Balancing act: New policies should shore up the sector against challenges

70 Interview: Ajay Kanwal, Regional CEO, ASEAN and South Asia, Standard Chartered 

ISLAMIC FINANCIAL SERVICES

72 Major player: As the country moves towards sharia law, the sector is poised to grow in importance and scope

76 Interview: Javed Ahmad, Former Managing Director, Bank Islam Brunei Darussalam (BIBD)

78 New moves: Islamic bonds expand the country’s financial base

INSURANCE

80 Resilient growth: Low penetration rate offers room for expansion, while takaful is steadily increasing its market share

85 Calling Asia Pacific: Efforts to standardise and liberalise the regional insurance market continue

86 Interview: Osman Jair, Managing Director, Insurans Islam TAIB; and Chairman, Brunei Insurance and Takaful Association (BITA)

Charting a new course

Page 88

Technology’s potential to ensure social development has led to the initiation of various ICT infrastructure projects in the Sultanate. These undertakings include ICT consolidation for the efficient running of government and the delivery of e-services to Bruneians, with both initiatives aligned with the goals set out in the strategic vision, Wawasan Brunei 2035. 

ICT

88 Charting a new course: The government has established ambitious goals to help private firms build their businesses on the back of new infrastructure

91 It starts at home: Building a local ICT workforce is a critical step in developing the sector’s long-term prospects

92 Interview: Pengiran Zain, Chief Executive, Authority for Info-communications Technology Industry (AITI)

Pulling its weight

Page 94

An overhaul of the country’s public transport segment is currently under way, as the government implements initiatives such as bus rapid transit to reduce car dependency. The most high-profile transport project on the horizon currently, Temburong Bridge, will connect the two sides of the country currently separated by Brunei Bay and the Limbang district of Malaysia.

TRANSPORT

94 Pulling its weight: Falling oil prices drive sector development

98 Interview: Dermot Mannion, Former Deputy Chairman, Royal Brunei Airlines (RB)

99 Change in the air: The flag carrier looks forward after a major overhaul

102 Avoiding gridlock: The government is searching for ways to reduce the population’s car dependency

Thinking big

Page 104

Large-scale construction projects being rolled out in Brunei Darussalam look set to make a significant contribution to the national economy, greatly facilitating the Sultanate’s connectivity and potentially leading to further substantial construction opportunities. Adding to this is the government’s focus on a green building drive to modernise industry practices.

CONSTRUCTION & REAL ESTATE

104 Thinking big: A new manufacturing hub and a bridge linking both sides of the country promise to bring big economic benefits

109 Part of the community: The Sultanate is benefitting from new agreements and commitments within the region

111 Interview: Bobby Chua, Vice-Chairman, Swee

112 Renovations under way: Development plans for Bandar Seri Begawan are set to create new opportunities

117 House and home: Changes in property ownership laws affect the real estate market

AGRICULTURE

120 Seeds of growth: The Sultanate is exploring diverse means of assuring food security, including agro-industry and rice cultivation

124 Interview: Dato Ali Apong, Minister of Primary Resources and Tourism

126 Fruits of the sea: Fishing and aquaculture hold great promise for the economy

Distinct advantages

Page 128 

The elevation of tourism to ministerial status in 2015 reflects the government’s hope that the industry can become a key driver of GDP growth.Building sustainably on the country’s strong Islamic tourism and ecotourism offerings is seen as key in raising international visitor numbers and revenue. 

TOURISM & CULTURE

128 Distinct advantages: Focusing on key niches to increase tourism receipts as the government looks to boost the non-oil economy

133 Opportunity awaits: The Sultanate is building on its Islamic tourism offering

134 Interview: Mario Hardy, CEO, Pacific Asia Travel Association (PATA)

135 Preserving paradise: Temburong prepares for an influx of visitors

137 China calling: A number of initiatives set to boost tourist numbers

TAX
KPMG 

141 Refining the system: Useful tax updates for businesses

146 Viewpoint: Shazali Sulaiman, Partner, KPMG Brunei Darussalam; and Chairman, Brunei Darussalam International Chambers of Commerce and Industry

LEGAL FRAMEWORK
Dr Colin Ong Legal Services

149 Law of the land: A breakdown of the country’s legal environment

156 Viewpoint: Colin Ong, Managing Partner, Dr Colin Ong Legal Services; and President, Arbitration Association Brunei Darussalam (AABD)

THE GUIDE

160 A good night’s sleep: Accommodation options

163 Listings: Phone numbers for local services

164 Facts for visitors: Useful information for new arrivals