Determinants of Supply of Non-Oil Exports in Brunei Darussalam

This article analyses factors influencing exports of non-oil products from Brunei Darussalam over a forty-year period from 1961 to 2000. The period covered transformation of Brunei from a low-income agriculture-based country to a high-income modern state with oil and gas production as the main engine of economic growth. The analysis employs a relatively new cointegration technique to identify the significant factors affecting levels of non-oil exports. The results indicate that real wages, level of oil exports as a proportion of gross domestic product, government exports promotion policy, and trend factors, such as improvement in infrastructure, significantly influenced long-run non-oil exports. Short-run disturbances to non-oil exports were driven by export prices, wage rates, government export promotion policy, and trend factors.