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  • Brunei in 2013Paradoxes in Image and Performance?
  • Christopher Roberts (bio)

Brunei Darussalam


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[End Page 83]

Brunei is currently a politically stable and peaceful country that enjoys one of the highest per capita incomes in Asia due to an abundance of hydrocarbon reserves. However, it is the smallest Southeast Asian nation in terms of its population (415,717) and second smallest in terms of its land mass (5,765 square kilometres). This, together with its long term existence as a constitutional sultanate or Malay Islamic Monarchy (Melayu Islam Beraja), provides for a fascinating mix of historical, cultural, and political considerations. However, its size, strategic location, and the challenges of modernization and globalization continue to generate a conundrum over the most viable policy approaches to economic, social, and security issues in the long term. Given these considerations, this chapter provides an overview of a broad spectrum of key developments in economic, political, and foreign affairs during 2013. As detailed below, Brunei faced a mixed year where there was a general stasis on the economic front and a new level of conservatism politically, but a successful mix of international diplomacy and leadership vis-à-vis Southeast Asian regionalism.

Economic Affairs

The pace of economic development in Brunei Darussalam has been quite mediocre in recent years. At the time of writing, Brunei was estimated to have achieved only 1.4 per cent real GDP growth during 2013 and this follows from 0.9 per cent in 2012.1 While real GDP growth is predicted to accelerate to 2.1 per cent [End Page 85] in 2014 and 2.5 per cent in 2015, such growth falls far short of the official target of 6 per cent that is declared in the country’s Vision/Wawasan 2035.2 This relatively lacklustre performance is primarily a consequence of continued dependence on the export of hydrocarbons and an associated lack of capacity to diversify the economy away from such dependence despite numerous decrees and directives to the contrary by Sultan Haji Hassanal Bolkiah. Nonetheless, the hydrocarbon revenue remains sufficient to maintain significant trade and budget surpluses; a state-of-affairs that is reinforced by the long-term channelling of its oil wealth into significant investments abroad.3 The economic climate was also reinforced by continued low inflation (estimated at 0.8 per cent in 2013), an outcome that is a consequence of the currency peg to the Singapore dollar and the government’s continued subsidization of certain basic items like rice and sugar.

Despite the continued dependence of the country on hydrocarbon revenue (approximately 90 per cent of GDP),4 there have been some successes in the Sultanate’s attempts to diversify its economy. Noteworthy examples include the commencement of construction for the Pulau Muara Besar port, the construction of a new ammonia plant (scheduled to come online in 2014), and the completion of a methanol plant in mid-2010. However, the methanol plant suffered from an “unexpected shutdown” for a week in February and was then taken offline for “maintenance” from May 2013 through to January 2014. A smaller development concerned a joint investment between Aureos (Brunei) and Viva Pharmaceutical (Canada) to construct Brunei’s first Pharmaceutical manufacturing plant that is estimated to generate a further 250 local positions.5 Given that Brunei only has a few thousand unemployed workers, such projects will have a significant impact in this sphere. However, the extent to which the country has a current need to extend its number of employment opportunities is debatable as it is already heavily dependent on foreign labour.

The government is also targeting tourism as a further source of income and employment and has declared an intention to increase tourist arrivals from 242,000 in 2011 to 400,000 by 2016.6 Here, there is room to further develop eco-tourism in the largely untouched tropical rainforest areas of the Temburong District. The government will support tourism and other industries through the enlargement of Brunei’s international airport (scheduled for completion by November 2014) and a July 2013 announcement that it will be launching a new low-cost airline in 2014.7 For several years the Sultanate has...

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