Brunei Economic Situation
Brunei's GDP per capita, at around US$51,000 ppp, is second only to Singapore within ASEAN. But with a population of around 370,000 (including a significant number of foreign workers, approximately 100,000 in 2003) Brunei's economy is small, ahead of only Cambodia and Laos in the region, as measured by GDP. GDP is estimated to have grown 4% over 2007, on the back of high energy prices, compared with 0.5% in 2004.
The oil and gas sector forms the backbone of Brunei's economy, worth around 66% of GDP and some 94% of exports. But Brunei's oil and gas reserves are conservatively estimated to last only another 10-20 years. New deep-water exploration areas - the ownership of which is contested with Malaysia - hold further potential. Of the remaining 34% non-oil related economic activity, the public sector comprises around 35% and the private sector around 65%. Small-scale manufacturing and primary production are the main non-oil sectors.
The government is taking a proactive approach to diversifying the country's sources of economic growth. The Brunei Economic Development Board (BEDB), formed in 2001, aims to attract FDI and promote joint ventures - targeting US$4.5 billion in new investment and at least 6,000 new permanent jobs by 2008. BEDB has a two-prong strategy. First to develop a number of industry clusters, including tourism, transportation and logistics, and financial services. The second strategy has two parts. The first is to develop oil and gas-related downstream activities at Sungai Liang - proposals include urea and ammonia plants, an aluminium smelter, and a tyre recycling facility. The second is to develop a deep-water port at Pulau Muara Besar.
A programme of government spending has boosted the private sector, which suffered a serious slump after the 1997 economic crisis and the 1998 collapse of Amedeo. Under the 8th National Development Plan, 2001 - 2005, the government provided around B$1 billion for projects including in social services, public utilities, information, science and technology, security, infrastructure and job creation.
Although the official unemployment rate is relatively low, a number of government and private sector initiatives have been set up to try and counter an increasing number of unemployed graduates. Foreign workers make up approximately 40% of the workforce. In April 2006, Brunei announced compulsory screening for HIV/AIDS among foreign workers.
Japan accounts for around 37% of Brunei's exports; ASEAN for approximately 25%; Australia, Korea, China and the US are also important destinations. The Brunei market is highly import-dependent with few tariffs or other trade barriers. Brunei imports over half of its goods (64%) from ASEAN neighbours, with Japan and the US accounting for around 7% and 3%, respectively. In May 2006, Brunei became the 65th member of the Asian Development Bank (ADB).
Last updated: 14 January 2009
