1. Diversification of Brunei Darussalam’s Economy: The Challenges and Opportunities
Prepared by:
Awang Haji Nairul Anawar bin Haji Abu Lahai
Awang Haji Zakaria bin Haji Ahmad
Pg. Abd Haris bin Pg. Haji Shabudin
Lt. Col(U) Mohd. Sallehin bin Haji Mohd. Taib

2. Why Need Economic Diversification?
To reduce dependency on oil and gas
To create more and more jobs
To create more resources of revenue

3. Brunei began to adopt policy on economic diversification since early 1970
Implementation of the Investment Incentive Act 1975
Formation of the Ministry of Industry and Primary Resources 1st January 1989
Formation of Brunei Darussalam Economic Council (BDEC)and the Formation of Brunei Darussalam Economic Development Board (BEDB) November 2001
Government Linked Companies

4. BEHAVIOUR OF GDP, OIL & NON OIL SECTORS (MILLIONS B$) AT CURRENT PRICE
YEAR
GDP
Value %contr
OIL SECTOR
NON OIL SECTOR
GOVT
PRIVATE
Value
%contr
1986
5,135.6
100
3,062.6
59.6
1,110.3
21.6
962.7
18.7
1987
5,800.9
3,566.5
61.5
1,152.4
19.8
1,083.0
1988
5,414.8
2,884.1
53.3
1,317.4
24.3
1,213.3
22.4
1989
5,845.0
3,033.7
51.9
1,375.4
23.5
1,435.9
24.6
1990
6,508.6
3,490.7
53.6
1,436.6
22.1
1,581.3
1991
6,620.5
3,334.7
49.6
1,655.7
25.0
1,630.1
1992
6,565.1
2,983.5
45.4
1,754.0
26.7
1,827.6
27.8
1993
6,585.1
2,753.3
41.8
1,845.3
28.0
1,986.5
30.2
1994
6,686.2
2,541.3
38.0
1,916.6
28.7
2,228.3
33.3
1995
7,394.2
2,862.6
38.7
2,190.7
29.6
2,340.9
31.7
1996
7,408.6
2,686.3
36.3
1,905.0
25.7
2,817.3
1997
7,628.1
2,991.7
39.2
1,713.2
22.5
2,923.2
38.3
1998
6,534.0
2,139.2
32.7
1,763.9
27.0
2,630.9
40.3
1999
7,144.7
2,668.1
37.3
1,783.6
2,673.0
37.4
2000
7,441.1
2,951.1
39.7
1,803.6
24.2
2,686.4
36.1
2001
7,481.9
2,717.7
1,855.8
24.8
2,908.6
38.9
2002
7,651.7
2,836.6
37.1
1,929.8
25.2
2,885.3
37.7
2003*
8,236.9
3,270.9
39.8
1,936.5
3,020.5
36.7
*Provisional

5. CONTRIBUTION & GROWTH OF PRIVATE SECTOR AND
FOREIGN LABOUR FORCE
YEAR
Value Of Private Sector GDP
% Contri bution to GDP
Number of Total
Workers in
Private Sector
Number of
Foreign
F.W as %
Employed
Labour Force
In Private Sector
1986
962.7
18.7 Na
37.00
1987
1,083.0
1988
1,213.3
22.4
1989
1,435.9
24.6
1990
1,581.3
24.3
1991
1,630.1
54,420
39,964
73.44
1992
1,827.6
27.8
63,118
47,392
75.08
1993
1,986.5
30.2
67,990
51,801
76.19
1994
2,228.3
33.3
80,144
62,326
77.77
1995
2,340.9
31.7
75,618
60,994
80.66
1996
2,817.3
38.0 78
1997
2,923.2
38.3 76
1998
2,630.9
40.3
94,049
71,691
76.23
1999
2,673.0
37.4
84,499
61,784
73.12
2000
2,686.4
36.1
90,258
66,723
73.92
2001
2,908.6
38.9
98,372
71,844
73.03
2002
2,885.3
37.7
2003
3,020.5
36.7

6. Achievement and performance of economic diversification
is not very encouraging so far.
According to the latest official figures, the oil and gas
industries accounts for 90% of the total exports, 88% of
government revenue and 40% of GDP.
Unemployment rate is increasing, currently 8,600 were
unemployed (10.98%). The rate was only 3.6% in 1981
and 7% in 1992.
Current population 340,800 and more than 101,900 is
under 14.
Current estimates are that oil will last around 15 years at
current production level and gas a further 30.

7. Our group had looked into the performance of the
various sectors :
fishing industry
tourism industry
the industry under Brunei Industrial
Development Authority (BINA)
Direction towards privatization

8. Fishing Industry
There are three important areas in fishing industry.
Marine
Aquaculture
Food processing
Brunei fisheries potentials are estimated to be worth
at least B$200 million a year since the last few years.
However, every year the industry has not generated
even 50% of the estimated value.

9. ECONOMIC ACTIVITY BY SECTORS (MILLIONS B$) AT CURRENT PRICE
YEAR
Agriculture
Forestry
Fishery
Value
Contri %
1986
70.8
1.4
16.3
0.3
11.8
0.2
1987
80.2
18.1
14.0
1988
90.9
1.7
13.2
16.4
1989
103.1
1.8
21.9
0.4
19.4
1990
116.8
22.9
1991
119.1
15.0
25.7
1992
121.7
1.9
16.0
28.0
1993
124.7
17.0
31.9
0.5
1994
128.2
18.3
33.2
1995
132.0
20.1
35.7
1996
141.5
22.3
37.2
1997
153.2
2.0
24.8
40.3
1998
139.2
2.1
20.8
41.0
0.6
1999
138.3
19.1
39.1
2000
140.7
20.2
41.3
2001
159.6
23.3
57.5
0.8
2002
156.7
26.3
80.8
1.1
2003*
180.7
2.2
26.2
87.6
*Provisional

10. There are several hindrances that cause to the failure in
meeting the production target.
A. Delayed of fishery development programmes which were caused by the following:-
I. Prioritizing conflicts on the development programmes
with other government agencies as for location is
concerned.
II. Rigid rules in using the budget allocated and not
responding well to the current requirement and
development.
III.Conflicts in prioritizing the development programmes
by the developer such as the Public Work Department.

11. B. Lack of ability and commitment of private sectors in
improving the production because of the following:-
I. Lack of expertise in terms of technical, management,
financial of the local entrepreneurs to implement the
projects within the time frames.
II. Lacking experience and expertise in marketing the fish
products.

12. C. Investment and participation in the industry is very
low. It’s arises because of:-
I. The negative view towards fishing industry with the
perception of high risks. Therefore, less interest and investment of local financial institute.
II. Lack of participation and coordination given by other
government agencies such as the licensing, permit
and so forth.

13. D. Highly competitive from new and emerging economies
such as China, which produces a huge amount of fish
and prawn. Obviously it gives stiff competitiveness:-
I. In terms of prices.
II. In terms of markets.

14. ARRIVALS BY PURPOSE OF ENTRY TO BRUNEI
FROM
YEAR
TOTAL
RETURNING
RESIDENTS
INTENDING
VISITORS
TOURIST
BUSINESS
RELATIVES
TRANSIT
OTHERS
1988
926,023
451,703
16,910
457,410
9,017
38,612
41,891
33,111
334,779
1989
946,377
539,205
14,421
392,751
8,549
43,882
38,531
21,837
279,952
1990
931,176
541,001
13,539
376,636
8,010
43,849
36,261
24,026
264,490
1991
931,234
555,978
31,312
343,944
28,640
64,151
133,552
39,625
77,976
1992
1,154,992
696,913
48,203
411,876
38,035
79,023
159,867
38,522
96,429
1993
1,278,854
732,229
57,716
488,909
44,921
85,225
181,794
40,754
136,215
1994
1,652,883
955,138
75,391
622,354
58,090
93,670
224,140
53,402
193,052
1995
1,664,088
874,878 (1) -
789,210
36,751
48,602
230,436
25,398
448,023
1996
1,675,294
814,393 (1)
860,901
55,497
43,691
250,139
20,782
490,792
1997
1,748,841
891,221 (1)
857,620
32,933
27,480
240,731
43,819
512,657
1998
2,121,612
811,119 (1)
1,310,493
32,738
34,372
228,684
66,361
948,338
1999
1,997,227
697,211 (1)
1,300,016
38,440
29,997
247,034
75,756
908,788
2000
2,118,250
811,486 (1)
1,306,764
41,241
27,303
258,836
75,381
904,003
Source : Immigration and National Registration Department, Ministry of Home Affairs
Note : (1) Including intending resident

15. ECONOMIC ACTIVITY BY SECTORS (MILLIONS B$) AT CURRENT PRICE
YEAR
Construction
Wholesale
Retail
Restaurant and Hotel
Transport, Storage &
Communication
Value
%Contri
bution
1986
170.1
3.3
71.3
1.4
155.5
3.0
40.1
0.8
123.2
2.4
1987
183.1
3.2
90.1
1.6
179.7
3.1
45.9
150.4
2.6
1988
195.7
3.6
91.9
1.7
207.6
3.8
52.1
1.0
170.8
1989
254.6
4.4
116.2
2.0
239.8
4.1
59.4
196.4
3.4
1990
277.4
4.3
122.0
1.9
257.3
4.0
67.7
214.1
1991
302.8
4.6
128.0
272.8
72.5
1.1
235.2
1992
315.8
4.8
136.6
2.1
285.4
77.9
1.2
252.0
1993
334.0
5.1
142.4
2.2
295.6
4.5
85.8
1.3
264.9
1994
364.4
5.5
152.6
2.3
307.2
96.1
278.3
4.2
1995
404.7
162.6
324.7
108.0
1.5
298.5
1996
487.2
6.6
171.9
399.0
5.4
127.8
304.6
1997
523.4
6.9
152.7
405.7
5.3
135.3
1.8
347.0
1998
539.2
7.7
192.6
2.7
418.7
6.0
148.4
372.5
1999
442.5
6.2
203.2
2.8
332.0
144.9
382.7
2000
428.2
5.8
205.6
320.3
148.6
413.5
5.6
2001
428.8
5.7
201.9
339.5
141.2
396.8
2002
408.8
221.0
2.9
425.6
155.1
368.8
2003*
231.9
407.5
4.9
164.3
431.9
5.2
*Provisional

16. Tourism Industry
The problem frequently encountered in development of
tourism industry are :
I. Uncoordinated effort in the implementation of tourism
and hospitality.
II. Lack of places of interest including public facilities.
III. Ineffective promotion.
IV. Lack of activities for tourists in the country, and
V. Stiff competition from the neighboring countries.

17. NUMBER OF NEW COMPANIES ALLOCATED AT THE
INDUSTRIAL SITES IN BRUNEI FROM
SITES
YEAR 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
TOT
Beribi I & II 23 5 4 6 3 1 2 53
Lambak Kanan Barat 11 12 52
Lambak Kanan Timor
Salar 22 9 8
Serasa 35
Serambangun 15
Pekan Belait 7
Sungai Bera 21
Batu Apoi
TOTAL 26 17 14 42 18 38 25
254

18. STATUS OF PROJECTS ALLOCATION AT THE
INDUSTRIAL SITES IN BRUNEI BY 2004
Industrial Sites
Approved
Projects
Operated
Projects going
to Operate
Pull Out
Beribi I & II 53 40 2 11
Lambak Kanan Barat 23 27
Lambak Kanan Timor
Salar 22 5 26
Serasa 35 18 3 14
Serambangun 15 4 1 10
Pekan Belait 12 7
Sungai Bera 21 9
Batu Apoi
TOTAL
254
124
104

19. EMPLOYMENT OPPORTUNITIES (INTENDED) AT THE
INDUSTRIAL SITES IN BRUNEI FROM
YEAR
TOTAL EMPLOYMENT OPPORTUNITIES
ACCUMULATED EMPLOYMENT OPPORTUNITIES
1989
1,500
1990 5
1,505
1991
526
2,031
1992
1,541
3,572
1993
1,285
4,857
1994
2,092
6,949
1995
840
7,789
1996
7,284
15,073
1997
1,252
16,325
1998
240
16,565
1999
1,328
17,893
2000
198
18,091
2001
100
18,191
2002
607
18,798
2003
446
19,244
2004
157
19,401

20. TOTAL EXPORTS OF BRUNEI’S GARMENTS INDUSTRY
FROM
YEAR
QTY (DOZ)
TOTAL (US$)
TOTAL (B$)
1989
179,936
5,377,741
10,255,352
1990
261,806
9,685,409
17,360,126
1991
406,764
18,942,925
31,085,340
1992
464,925
19,214,187
31,319,126
1993
569,238
23,309,781
39,138,748
1994
789,605
28,809,553
40,659,772
1995
969,472
41,514,308
58,535,174
1996
1,022,917
46,753,607
65,455,049
1997
1,230,730
57,528,747
81,690,821
1998
1,799,275
87,131,535
139,409,976
1999
2,978,711
142,206,915
238,907,617
2000
4,412,190
207,731,257
348,988,512
2001
5,017,429
224,978,312
377,963,564
2002
5,237,823
216,188,061
366,330,669
2003
5,814,213
229,272,598
388,502,413

21. The Industry under BINA
The problem encountered in developing the industry
under BINA.
Small local market
Lack capability of entrepreneurs to be competitive in the
international markets.
High operation cost
Unattractive policy (e.g: Land policy)

22. The Direction towards Privatization
The problem encountered to privatization:
slowness in decision making
slowness in implementing projects

23. In general to speed up the economic diversification the
Government has to play a vital role as follows:
I. Provide the necessary physical infrastructure
II. Formulate a policy to facilitate and create a conducive
business such as tax, land policy and so forth.
III. Change the mindsets, attitudes, perception, knowledge
and skills of the individual stakeholders either the
public sectors, private sectors and the community on the
importance and urgency of economic diversification.
Such for example in the administrative efficiency viz
faster in decision making, faster in implementation of
infrastructural projects and so forth.

24. IV. All the ministries and department should coordinate the
activities to ensure more efficient and effective
implementation of the economic diversification policy.
V. Focus and align any viable sector which Brunei got the
competitive advantage.
VI. Brunei has got to be proactive and react very fast to the
international changes.
VII. Able to compete regionally and internationally.

25. BEDB to develop Pulau Muara Besar into
a Global Mega Port and Sungai Liang
Industrial Park.
This is in line with the objective of BEDB
to create 6,000 new permanent jobs and
attract US$4.5 billion in investments by
2008.

26. What is our opportunities?
What will happen to us if Brunei cannot
diversify its economy ‘successfully’ the
next 15 years?