Countries of the World/COUNTRYS.BIN/dp/0058/00586.txt

Text File | 1991-06-24 | 19KB | 394 lines

$Unique_ID{COW00586}
$Pretitle{406}
$Title{Brunei Darrussalam
Part 5.  Economic Profile}
$Subtitle{}
$Author{Embassy of Brunei Darussalam, Washington DC}
$Affiliation{Embassy of Brunei Darussalam, Washington DC}
$Subject{brunei
government
oil
development
per
plan
gas
national
agriculture
cent}
$Date{1988}
$Log{Money*0058601.scf
Table 2.*0058601.tab
Table 3.*0058602.tab
Table 4.*0058603.tab
Table 5.*0058604.tab
Table 6.*0058605.tab
Table 7.*0058606.tab
Table 8.*0058607.tab
Table 9.*0058608.tab
Table 10.*0058609.tab
Table 11.*0058610.tab
}
Country:     Brunei Darrussalam
Book:        Brunei Darussalam in Profile
Author:      Embassy of Brunei Darussalam, Washington DC
Affiliation: Embassy of Brunei Darussalam, Washington DC
Date:        1988

Part 5.  Economic Profile

[See Money: Courtesy Embassy of Brunei Darussalam]

The National Development Plan

     Brunei's economy is dominated by the oil and liquefied natural gas
industries and Government expenditure patterns. The Brunei Government is well
aware of the inherent long-term problems caused by such a pattern, and
accordingly a series of National Development Plans have been implemented for
the past 20 years.

     The mode of planning is indicative of broad targets set by the Government
through a National Development Committee. The main aim of the fifth National
Development Plan 1986-1990 is to build up a more diversified economy. Previous
National Plans have been more concerned with improving the infrastructure.

     The current National Plan has nine objectives. These are:

     - To improve the quality of life of the people.

     - To maximise the use of national resources.

     - To develop new export orientated industry as well as import
substitution industries.

     - To accelerate human resources development so as to meet the country's
demand for an increasingly sophisticated economy.

     - To maintain full employment and increase the level of productivity.

     - To maintain a moderate rate of inflation.

     - To foster a dynamic, disciplined and responsible society with its
citizens as agents for progress and development.

     - To encourage and nurture the development of Malays as leaders of
industry and commerce.

     - To have a clean and healthy environment.

     Brunei's economy has performed well in the 1980s, although the
macroeconomic indicators are distorted by the depressing impact of the fall in
oil prices during that period. Gross domestic product (GDP) per capita for the
economy as a whole fell in the 1980s, following a dramatic 33.3 per cent
growth rate in 1979 and a 67.4 per cent growth rate in 1980. This highlights
the importance of oil and gas prices.

     The fall in oil revenue has had no effect on living standards, which have
continued to improve steadily during the decade. The non-oil sector of the
economy, particularly construction, has shown a healthy growth, with a boost
in the infrastructure and a conscious move to diversify the economy which is
the hallmark of the Government's economic planning. Construction averaged a
growth rate of 14.2 per cent per annum during 1975 to 1985.

     The National Plan recognises the urgent need for diversification. The
Plan stated in 1985 that it was "more urgent now to formulate policy measures
to reduce the dependence of the country's economic well-being on Government
expenditure and to increase the share of the private sector's contribution".

Facts At A Glance

[See Table 2.: Area and Population Density by District, 1986]

[See Table 3.: Working Population by Major Industry, Sector and Sex (1981
Census)]

[See Table 4.: Imports by Product]

[See Table 5.: Exports by Product]

[See Table 6.: Imports by Countries of Origin]

[See Table 7.: Exports by Countries of Destination]

[See Table 8.: Consumer Price Index (Average) (1977 = 100)]

[See Table 9.: Estimates of gross domestic product by economic activity at
current prices]

[See Table 10.: Government Budget,]


[See Table 11.: Gross Domestic Product 1980-1986]

     Brunei's commitment to the free market economy is reflected by the
concern that the Plan shows to boost private sector involvement, particularly
in manufacturing, agriculture and the service industries.

     The Brunei Government's fundamental commitment to the free market and its
expectation that companies should behave responsibly was summed up in a
keynote speech by His Majesty, Sultan Hassanal Bolkiah Mu'izzaddin Waddaulah,
Sultan and Yang Di-Pertuan on National Day in 1987:

     "In implementing any project my Government will ensure the involvement of
the private sector based on its capabilities. Such opportunities should be
used responsibly for the progress of the country. The private sector should
complete jobs given to them on time and properly, not just for profits," His
Majesty said.

     The view within the Economic Planning Unit is that the private sector
needs to be more aggressive in pursuing new ventures and more responsive to
new technologies and new market opportunities. The private sector has more
exposure to international contacts and dealings and will therefore be in a
better position to respond to the Government's industrial policy.

     Brunei's policy of a relatively open economy has had the effect that
professional standards, for example, in accountancy and auditing, have risen
due to the standards set by various external professional bodies. The
Government hopes that these effects will continue to stimulate efficiency and
a move to higher value added goods and services.

     His Majesty The Sultan, in his 41st birthday address in 1987, said:

     "In the economic field we have also felt the effect of the fall of world
oil prices. However, this does not affect the implementation of the projects
under the National Development Plan and instead it has increased our
determination to achieve the objectives of diversifying and strengthening the
country's economy. My Government is also making preparation for the
establishment of light industries."

     The fifth Five Year Plan places emphasis on the creation of new
industries. This is a shift of emphasis from earlier Plans which dealt with
infrastructure and social matters. The Plan lists some 350 specific projects
and has allocated B $3.7 billion for development. Total public spending under
the fifth Plan is B $16.2 billion, compared to B $11.9 billion in the fourth
Plan.

     As part of its encouragement of the private sector policy, the Government
has initiated a series of business seminars to find out what local business
people feel and want. The Economic Development Board and the Industrial
Development Unit were both established to promote the development of
entrepreneurs and new industries.

     Brunei has two major constraints operating on the development of its
industrial base. The first is its small domestic market and the second is very
high wage levels. The Government believes that the effect of these problems on
economic expansion can be dealt with by the move towards export orientated
industry and eventually to building up a large financial services sector
within the country.

     Foreign investment in Brunei is encouraged as an important part of the
Five Year Plan. Companies receive assistance in setting up joint ventures with
Brunei businesses (see page 128).

     The Economic Planning Unit monitors the implementation of the plan to
ensure that targets are met. Work is now under way for a mid-term review of
the fifth Plan, whilst in the ministries work has started for preparation of
targets and projects for the sixth Five Year Plan, which will commence in
1991.

Oil and Gas Production

     Commercial production of oil commenced in Seria in 1929 and the industry
has dominated the Brunei Darussalam economy since that time. Oil and energy
income as a proportion of gross national product has been falling in recent
years. However, Brunei Darussalam has avoided some of the recent public
finance problems faced by