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General
Overview
of the Economy
Brunei
Darussalam is still very much dependent on revenues from crude
oil and natural gas to finance its development programmes.
Aside from this, Brunei Darussalam also receives income from
rents, royalties, corporate tax and dividends. Due to the
non-renewable nature of oil and gas, economic diversification
has been in Brunei Darussalam's national development agenda.
In the current Seventh national Development Plan, 1996-2000,
the government has allocated more than $7.2 billion for the
implementation of various projects and programmes.
Brunei Darussalam is the third largest oil producer in
Southeast Asia and it produced 163,000 barrels per day. It is
also the fourth largest producer of liquefied natural gas in
the world.
Economic Indicators
GDP at current prices (Million B$) : 8.051.0 (1997 estm.)
Average annual inflation rate: 2.7 percent
Unemployment rate: 4.9 percent
Land,
Labour and Capital
 Although
Brunei Darussalam is no giant when it comes to landmass, it
has been blessed with rich natural resources and a strategic
location within the region. The majority of the country is
covered in tropical rainforests teeming with exotic flora and
fauna. Anxious to promote the conservation of its lush
surroundings, eco-tourism has gained importance in the
country's economic activities.
Human resources are central to the successful transformation
of Brunei Darussalam into a diversified industrial economy. As
in most developing nations, there is a shortage of skilled
workforce in the country. Therefore, greater emphasis is
placed upon education. The main areas of interest in human
resources development are managerial and industrial skills,
with particular emphasis on entrepreneurial skills as well as
vocational and technical training.
Brunei
Darussalam's main exports consist of three major commodities -
crude oil, petroleum products and liquefied natural gas - sold
largely to Japan, the United States and ASEAN countries. The
Government's move to promote non-oil and gas activities has
been largely successful with figures showing 64% of GDP in
1996 compared to only 24.3% in 1991.
Primary
Resources
Agriculture
Rice Production
 Various
efforts have been made by the government to encourage rice
production during the last decade and the yield per acre has
increased due to the introduction of better agricultural
methods.
Approximately 290 tones of 1 percent of the nation's rice
needs are produced locally from 613 hectares of rice fields
scattered around the country.
As a first step towards the attainment of self-sufficiency in
rice, the government launched in 1978 an experimental large
scale mechanized rice planting project at Kampong Wasan.
Covering an area of 400 hectares, the project was a joint
undertaking between the Agriculture Department and the Public
Works Department.
The Public Works Department was responsible for providing the
required infrastructure, clearing the land and giving other
basic provisions. The Agriculture Department was responsible
for actual planting, maintenance, harvesting and processing.
The project is also aimed at planting padi twice a year, from
April to September and from October to March.
Various
efforts have been made by the government to encourage rice
production during the last decade and the yield per acre has
increased due to the introduction of better agricultural
methods.
Approximately 290 tones of 1 percent of the nation's rice
needs are produced locally from 613 hectares of rice fields
scattered around the country.
As a first step towards the attainment of self-sufficiency in
rice, the government launched in 1978 an experimental large
scale mechanized rice planting project at Kampong Wasan.
Covering an area of 400 hectares, the project was a joint
undertaking between the Agriculture Department and the Public
Works Department.
The Public Works Department was responsible for providing the
required infrastructure, clearing the land and giving other
basic provisions. The Agriculture Department was responsible
for actual planting, maintenance, harvesting and processing.
The project is also aimed at planting padi twice a year, from
April to September and from October to March.
Fruit Farming
Fruit farming is largely
performed on a small scale. There is a vast range of locally
produced tropical fruits, which supply some 11% of domestic
requirements of more than 14,000 tones. In 1975, the
Agriculture Department initiated a fruit-farming scheme to
encourage fruit cultivation in the country. In an effort to
increase the production of local fruits, the government
through the agricultural stations in Batang Mitus, Tanah Jambu
and Lumapas, planted seedlings of various fruit trees
including rambutan, durian and oranges.
Vegetables
Locally grown vegetables constitute about 6,700 tones or
just over 65 percent of the country's needs. The amount
increases gradually as more people are taking up vegetable
farming.
Livestock
The country produces about 1,000
head of cattle and bufaloes for the market annually at about
six percent of its own beef consumption, The Government
assists local stock farmers with calves, machinery, feed,
seedlings, fertilizers and veterinary care. The country
requires 3,000 to 5,000 tones of meat annually, with per
capita consumption of betweeen 9 and 17 kg. To meet demand, it
has to import an average of between 4,000 and 7,000 head of
live cattle from its Wileroo Ranch in the Northern of
Australia. Local fresh milk production contributes about 199
thousand litters annually.
Research has been carried out to ascertain the best possible
way to increase the buffalo population. Towards this end, the
agriculture Department has launched a research project
covering 4000 hectares in the Batang Mitus area in the Tutong
District. So far, over 200 hectares have already been
initiated. The farm's main aim will be to assess local and
imported stock towards producing highbred buffaloes for
commercial purposes.
Forestry
About three quarters of Brunei Darussalam's total land
area are covered by forests. However, their contribution to
the economy is minimal. Logging, limited to 100 thousand cubic
meters annually, is confined to meeting local needs only.
Fisheries
 With
the proclamation of the 200 nautical miles Brunei Fisheries
Limits in 1983 and the identification of potential areas for
fisheries activities, the value of fisheries industry is
estimated to be worth more than B$200 million. At the present
exploitation and utilization, the fisheries sector of Brunei
Darussalam, comprising capture, aqua-culture and seafood
processing contributed about 0.5% of the total Gross Domestic
Product (GDP), or about B$37.2 million, at current prices. It
provides work to more than 1,500 involved in this sector.
With realistic potential for export, however lacking in
relevant resources, including associated technology, the
development of fisheries industry needs involvement of foreign
investment. The government, through the Fisheries Department
therefore has been actively promoting suitable foreign
involvement, either in the form of joint partnership or other
forms of strategic alliances, aimed at developing the
fisheries sector towards a competitive, efficient and
commercially lucrative venture.
External
Trade
Oil and Gas
Crude oil and liquefied natural gas are the main exports
of Brunei Darussalam. From January to June 1998 it exported
134.77 trillion BTU or 88.94 percent to Japan and 16.75
trillion BTU or 11.06 percent to the Republic of Korea.
Under a Sale and Purchase Extension Agreement signed by BLNG
and the Japanese Buyers in 1993, the LNG Plant at Lumut
exports annually about 5.54 million metric tons of LNG to
Japan. In June 1998, a further amendment made known as the
Sale and Purchase Extension Agreement Amendment had been
signed which increased the sales for an additional 14 cargoes
per annum to Japan starting from 1999 till the year 2013.
In October 1997, a sale and purchase agreement had been signed
to deliver 0.7 million metric tons of LNG to the Republic of
Korea until the year 2013. In total, 200 'B' class LNG cargoes
equivalent will be delivered annually to the buyers in Japan
and the Republic of Korea from the year 1999 to 2013.
In March 1998, the Government of His Majesty the Sultan and
Yang Di-Pertuan of Negara Brunei Darussalam formed a
Joint-venture company the Brunei Gas Carriers Sendirian Berhad
(BGC) with Shell International Gas and Mitsubishi Corporation.
Currently, Brunei LNG Plant processes natural gas supplied
from offshore gas fields owned by the Brunei Shell Petroleum
Company Sendirian Berhad. From 1st April, 1999 LNG will
receive additional natural gas from a non-Brunei Shell owned
Maharajalela Jamalulalam Field.
Oil and Gas accounted for about 36% of the country's Gross
Domestic Product in 1996.
Crude oil and liquefied natural gas are the main exports
of Brunei Darussalam. From January to June 1998 it exported
134.77 trillion BTU or 88.94 percent to Japan and 16.75
trillion BTU or 11.06 percent to the Republic of Korea.
Under a Sale and Purchase Extension Agreement signed by BLNG
and the Japanese Buyers in 1993, the LNG Plant at Lumut
exports annually about 5.54 million metric tons of LNG to
Japan. In June 1998, a further amendment made known as the
Sale and Purchase Extension Agreement Amendment had been
signed which increased the sales for an additional 14 cargoes
per annum to Japan starting from 1999 till the year 2013.
In October 1997, a sale and purchase agreement had been signed
to deliver 0.7 million metric tons of LNG to the Republic of
Korea until the year 2013. In total, 200 'B' class LNG cargoes
equivalent will be delivered annually to the buyers in Japan
and the Republic of Korea from the year 1999 to 2013.
In March 1998, the Government of His Majesty the Sultan and
Yang Di-Pertuan of Negara Brunei Darussalam formed a
Joint-venture company the Brunei Gas Carriers Sendirian Berhad
(BGC) with Shell International Gas and Mitsubishi Corporation.
Currently, Brunei LNG Plant processes natural gas supplied
from offshore gas fields owned by the Brunei Shell Petroleum
Company Sendirian Berhad. From 1st April, 1999 LNG will
receive additional natural gas from a non-Brunei Shell owned
Maharajalela Jamalulalam Field.
Oil and Gas accounted for about 36% of the country's Gross
Domestic Product in 1996.
Banking
Brunei
Darussalam is well served by several commercial banks with
branches throughout the country. The first banking was opened
more than fifty years ago when the Government set up the Post
Office Savings Bank (POSB) in 1935.
Brunei Darussalam operates a Currency Board system and has no
Central Bank. The Government under the Banking Acts and
Finance Companies Act regulates the banking industry. The
Ministry of Finance through the Financial Institutions
Division closely regulates all banking activities to ensure a
stable and fiscally sound business environment. The Brunei
Currency Board is responsible for issuing and managing the
currency.
The Brunei Dollar is at par with the Singapore Dollar and are
both freely traded in the respective countries. There are
currently no exchange controls in Brunei. Money changer
facilities are also available.
The banks continue to support local businessmen in their
endeavor and thus help in the development of Brunei
Darussalam.
There are 9 banks (3 incorporated in Brunei) with branches
throughout the country.
List of Banks:
Baiduri Bank Berhad
Citibank
Development Bank of Brunei Berhad
Hongkong Bank
Islamic Bank of Brunei Berhad (IBB) Berhad
Malayan Banking Berhad
Overseas Union Bank (OUB)
Standard Chartered Bank
Sime Bank Berhad
Currency:
The unit currency is the Brunei dollar, divided into 100
cents.
Exchange Rate: US$1.00 = between B$1.43 and B$1.60
Employment
Brunei Darussalam's small population accounts for its limited
labor force. With the implementation of ambitious plans in
recent years, the country has had to recruit both skilled and
unskilled labor from abroad.
There are about 36,345 (early 1998) workforce in the
government sector and more than 106 thousand wage earners in
the private sector. This figure, however, does not include
members of the Security Forces, daily-rated employees an
domestic servants in private employment.
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