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| .bn Brunei |
| Yong Chee Tuan |
Overview The economy of Brunei, which is predominantly based on oil and gas exports, has done well given the high prices enjoyed by the two commodities during much of 2004. The country is expected to embark on a new round of investment-oriented development activities. A second wave of e-government spending is also expected to extend beyond the current Eighth National Development Plan ending in March 2006. Economic growth is expected to strengthen further in the years ahead due largely to increased government spending. GDP is projected to increase at 3 - 4 percent. The largest share of the country’s annual budget for 2004 - 2005, amounting to B$5,000 million (US$1 = B$1.7), was the B$604 million that went to the Ministry of Education. A two-pronged investment strategy has been conceived by the Brunei Economic Development Board (BEDB) to accelerate economic diversification. Plans are underway to develop an international port and hub at a deserted island off the coast of Brunei Bay called Muara Besar. Another set of plans focuses on building a series of heavy industrial plants (aluminium refinery and tyre recycling plants) in Sungai Liang, a town close to the Brunei Liquefied Natural Gas Plant. The Eco-Cyber Park project runs parallel to these initiatives. It has been conceived to integrate ICT and ecology, principally in the form of eco-tourism and environmentally friendly approaches to industrial development within a specially gazetted zone. This project was the brainchild of the Ministry of Communications and is now managed by BEDB. It aims at jumpstarting foreign direct investment in ICT-related fields and incubating local entrepreneurs. However, the Eco-Cyber Park appears to have been overshadowed by the Sungai Liang Industrial Park project. The master-plan contract for the latter was awarded to the Halcrow Group in December 2004. The urgency of attracting downstream investors to the Sungai Liang Industrial Park will further retard the progress of the low-priority Eco-Cyber Park. The consultancy report from the Monitor Group, presumably a part of the feasibility study on the projects, was submitted to BEDB in mid-2003. The newly appointed chairman of BEDB, Pehin Dato Hj Mohammad, is likely to maintain the momentum of securing international investors to develop downstream and manufacturing industries in Brunei. BEDB will play a more prominent role in the implementation of the Eco-Cyber Park project. A request for proposal was issued in early 2003. However, there is no indication as to when and how the project will be awarded. Ironically, high crude-oil prices do not favour diversification of the economy into the energy-intensive heavy industries. From a business perspective, it is rather fruitless to allow high profits from oil exports to be offset by heavy spending on downstream activities. The current trend in the oil industry appears to be to focus on lean and niche fields, cutting off subsidiaries or plants that are not making good profits. If it is difficult to create and maintain clusters of manufacturing plants in the country, then other options such as financial services, tourism, logistics and ICT are likely to become mainstream economic activities. The government is actively pursuing the vision of esta-blishing Brunei as a financial hub in the region, specifically for Islamic financing and trade-related financial products. The country has an edge in this field because of its friendly international policies and alliances. Brunei Darussalam is a Malay Islamic monarchy state, renowned for its peace and security. It also does not need to further burnish its reputation as a modern, progressive and global player. In this regard, the government is committed to improving and strengthening Brunei’s finance-related services. The Treasury, Accounting and Finance Information System (TAFIS) project led the first wave of e-government initiatives in the country. The Brunei Accenture Group, a joint venture between Accenture and a government-owned enterprise, won the contract to implement the project, which is scheduled to be completed by the middle of 2005. TAFIS was followed by the PMOnet project of the Prime Minister’s Office. A message that comes across clearly from these two projects is that the government is pinning high hopes on the. . . . . . the complete text of this chapter is available for purchase and immediate download as a PDF file, please click here for more information. |
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