Brunei Darussalam: Making Strides with a Renewed Focus on the Future

Summary

Brunei Darussalam, one of the smallest yet richest countries in Southeast Asia with a total population of nearly 450,000, has made remarkable economic progress as a result of its reforms. Some indications of its achievements are presented in this chapter. The 2018 ASEAN+3 Regional Economic Outlook (AREO) projected that Brunei would have strong growth in gross domestic product (GDP), rising from 0.6 per cent in 2017 to 1.6 per cent and 3.4 per cent in 2018 and 2019 respectively. Yet, according to a forecast of the overall growth rate of real GDP among the ten Southeast Asian countries, Brunei experienced the slowest growth rate this decade. The country's average GDP annual growth rate — greatly affected by world prices and the local production of oil and gas — from 2004 to 2018 was 0.13 per cent.

Despite the challenges associated with the decline in energy reserves and falling world oil prices, the Brunei government and industrial players remain optimistic about the future of the country, in view of the rapid development of the global economy and the continual enhancement of the life energy requirement, which in turn increases the global demand for oil and gas. A decade after the 2008 global financial crisis, the casualties of Brunei's near economic downturn are slowly fading from memory. Oil exploration and drilling activities are actively in progress, with a continued focus on accessing more resources for the development of the overall economy, in line with the country's need for diversification strategies that can deliver sustained, job-intensive and inclusive growth.

Brunei's own experience of sustainable economic growth underscores the importance of economic diversification and broad-based economic development governed by prudent policy and regulation. Economic diversification has been a key theme of Brunei's long-term strategy since the launch of its first development plan, the National Development Plan 1953–1958. While there is reason to be optimistic about the country's future economic prosperity because the government has shown progress in its basic policy of diversifying the economy away from oil and gas, the challenge is how to wean the country off its debt drip without intensifying an economic slowdown.