Country Report Brunei June 2009

Outlook for 2009-10

Brunei will remain an autocracy over the forecast period. The sultan, Hassanal Bolkiah Muizzaddin, may step up propaganda on the national ideology, Malay Islamic Monarchy, which is seen as important in maintaining social unity. The sultan has not announced a timetable for the implementation of the partial democratisation he envisages. Real GDP growth is likely to be weak over the forecast period. Methanol exports will begin in 2010, a small step towards the diversification of the economy away from oil.

The political scene

The Legislative Council was convened once again in March and heard presentations on the budget. No challenge to the government was reported from the pliant appointed body. The government has reached an accord with Malaysia to set up a committee to demarcate maritime borders. The work of the committee, which is expected to be completed by 2010, could lead to an upsurge in oil and gas output as disputed offshore areas come into production.

Economic policy

The government has said that it expects a rare budget deficit in fiscal year 2009/10 (April-March), owing to lower global oil prices. However, the sultanates wealth means that this will be easily financed. Bruneis competitiveness has been ranked by the World Economic Forum, an international foundation, which gave it a high score for macroeconomic stability, but a low score for the bureaucracy required to set up new businesses.

The domestic economy

Brunei has failed to publish economic data during the past three months; existing data go up to the second quarter of 2008 only. Data to mid-2008 show some success in financial services development. Malaysia and Brunei are to integrate their power grids, allowing Brunei to benefit from Sarawaks cheap and clean hydropower. Work on an aquaculture project began in February; it will open in 2010 and should yield significant exports of fish. The government has taken a significant step towards giving women equal rights in government employment. In April it announced that the employment status of married women in the civil service would be the same as for unmarried women.

Foreign trade and payments

Bruneis external trade data for recent months have not yet been published, but there will be few surprises. Bruneis exports consist almost entirely of oil and gas, and lower commodity prices will have reduced the sultanates trade surplus. Brunei remains dependent on imports for a wide range of goods, including food, and cars from Japan.

This report covers the following industry codes:
SIC Code: 60;1;49;15
NAICS Code: 52;11;22;23