Asia Economy

International agencies and local officials are warning that Brunei Darussalam must remain firmly focused on diversifying its economy away from a declining energy sector and on improving its human capital if it is to achieve sustainable growth in the medium term.

Malaysia’s leadership is forging ahead with plans for entry to the US-led Trans-Pacific Partnership (TPP) despite domestic concerns that the multilateral trade agreement will negatively impact some domestic sectors and international concerns over delays in its progress.

A shift of emphasis is under way in the regime governing Indonesia’s foreign direct investment (FDI), as the country moves to boost capital inflows in some areas of the economy through regulatory changes, while closing other sectors to international players.

Though early performance has been sluggish, officials in the Philippines are confident the strong foreign direct investment (FDI) showing from last year will be maintained in 2014, with an improved business climate along with political and economic stability as the Philippines’ main selling points. Even so, competition for investments is likely to remain keen.

Pressure is mounting on Malaysia’s central bank to tighten loan restrictions after its annual report showed household debt levels inching towards 87% of GDP at the end of 2013. With the highest household debt levels in Asia, demand for credit is driven primarily by the desire to buy properties and vehicles.

The 2014/15 budget for Brunei Darussalam, which came into effect on April 1, has a strong business focus, seeking to promote investment, stimulate and support private sector growth, and help provide the tools and skills needed to sustain economic development and diversity.