Overview

Brunei
Brunei, independent Islamic sultanate on the northern coast of the island
of Borneo in Southeast Asia. It is bounded to the north by the South China Sea and on all other
sides by the East Malaysian state of Sarawak, which also divides the state into two disconnected
segments of unequal size. Brunei achieved independence in 1984, after having been a
British protectorate since 1888. It is a member of the Commonwealth and ASEAN (Association
of Southeast Asian Nations).
The estimated population is 433,285, with about 200,000 people living in the capital and
largest city of Bandar Seri Begawan. Brunei is divided into four districts, the largest of which is
Brunei-Maura, with more than half of the country's population. Nearly 97% of Brunei's population
lives in the larger western area (including Brunei-Muara, Tutong and Belait) while just 10,000
people live in the mountains of the east.
The population of Brunei is youthful and growing. About one-fourth of the population is
under age 15, and roughly half is under age 30. The birth rate is around the global average, while
the death rate is among the lowest in the world, partly because of the youthful age distribution.
Life expectancy is around 77 years of age, higher than the global average. Brunei has a high net
migration rate, though its growth rate is steadily decreasing.
Brunei’s economy is almost totally dependent on the exploitation of its vast reserves
of petroleum and natural gas. Although oil and gas revenues have allowed the state to give its
citizens one of the highest per capita incomes in Asia, they also have made the country dependent
on a single commodity that is subject to market fluctuations. In addition, Brunei must rely on
imports for nearly all its manufactured goods and most of its food.
The petroleum industry (including the manufacture of liquefied natural gas [LNG])
generates more than half of Brunei’s GDP, although it employs a very small portion of the labor
force. Nearly all of the country’s petroleum and natural gas is produced from offshore fields
located off its own western segment, and all but a small percentage of the production is exported,
mostly to Asian countries. A local refinery supplies domestic needs; the country’s energy is
generated almost entirely from fossil fuels.
 General Conclusion

Brunei
Brunei is an energy-rich sultanate on the northern coast of Borneo in Southeast Asia.
Brunei boasts a well-educated, largely English-speaking population; excellent infrastructure; and
a stable government intent on attracting foreign investment. Crude oil and natural gas production
account for approximately 65% of GDP and 95% of exports, with Japan as the primary export
market. Per capita GDP is among the highest in the world, and substantial income from overseas
investment supplements income from domestic hydrocarbon production. Bruneian citizens pay no
personal income taxes, and the government provides free medical services and free education
through the university level.
The 1st chapter discussed about Poverty and Inequality, Economic Characteristics of High-
Poverty and the policies developed by the country in relation to the chapter. In the aspect of
Poverty, Brunei does not seem to have an exact poverty head count ratio as it a developed country
and it has managed poverty well however, it did not totally eradicate poverty. To measure their
poverty presence the researchers decided to use the country’s HDI value because in this way if
Human development is low in the country then Poverty is high and evident, the opposite goes if
Brunei’s HDI is escalating. And indeed, Brunei Darussalam’s HDI value for 2017 is 0.853—
which put the country in the very high human development category. For Inequality, the
researchers only found the country’s past Gini coefficient without a specific year and this s 0.405.
Since a country’s GDP cannot rise without the proper distribution of income we therefore, decided
to measure their inequality using Gross Domestic Product Rate. Over the years Brunei had gone
through peaks and downfalls due to their exports-imports situation but Brunei's GDP Per Capita
reached 30,666.620 USD in Dec 2018, compared with 28,237.873 USD in Dec 2017.
Regarding Economic Characteristics of High Poverty, Women in Brunei are recognized as
humans with power and high status. Malays make up 65.7 percent of the populations;
Chinese, 10.3 percent, indigenous people, 3.4 percent and other, 20.6 percent. There are
about 25,000 Iban and Dusan tribal people which live rain forests. The are some Indians.
And their policy to combat economic development is Wawasan Brunei 2035. It puts the
emphasis firmly on “accelerating economic growth” through high productivity to achieve the
target of 6% average annual economic growth. This also targets eradicating poverty and inequality
in relation to economic growth.
In Chapter two,
In Chapter three, it discusses Urbanization and Rural-Urban Migration Development. As
the country grows, the population grows. Brunei Darussalam is the fourth-largest oil producer in
South-East Asia and the ninth-largest exporter of liquefied natural gas in the world. Urbanization
is quite important because it plays a great role in our economy as it brings higher economic scale
to our society. Relationship exists between urbanization and economic growth and urbanization
positively impacts economic growth. The total population of Brunei was estimated at 428,697
million people in 2017, and 77.31% of it are Brunei’s total population living in urban areas. High
population leads to urbanization. So, urbanization is one factor that affect economic growth in
Brunei.
In Chapter four, it discussed the country’s policies in tackling Environmental
Sustainability. The country of Brunei Darussalam implemented some environmental policies just
to protect and the conservation of the resources of their country. The Government of Brunei
Darussalam is fully committed to the concept of sustainable development, in order to attain
sustainable development, they implement some policies to ensure that the resources are protected
and conserved as well. These policies will help the country in attaining development, because
environment plays a big role in our lives. Environmental Policy is aimed to balancing
environmental protection and conservation of natural resources with other policy and goals. The
country of Brunei then implemented conservation of forestry, clean water, waste management,
clean air and other policies that plays a big role in order to attain development. Some
environmental policies regulate the actions of private individuals, organizations, or businesses for
one goal and that is Protecting the Environment. Oil and Gas is one of the major resources that the
country of Brunei has and these resources help them to attain development and that is why they
implemented the Petroleum Mining Act in order to conserve the oil and gas resources of their
country. Therefore, these strategies had provided a basis for long term policies and actions on the
need to protect and conserve the country’s environment from pollution and excessive exploitation
of natural resources. At the same time the existing administrative mechanism was also
strengthened to better co-ordinate environmental programs undertaken by various agencies of the
country of Brunei Darussalam.
In Chapter five,
In Chapter six,
In Chapter seven,

Findings:
Conclusion:
 Country Paper
Chapter 1
POVERTY, INEQUALITY AND DEVELOPMENT
This chapter comprises the data analysis of poverty, inequality and development in
Indonesia. It also shows here the economic characteristics of high-poverty groups the rural poverty,
women and poverty and ethnic minorities, indigenous population and poverty together the policies
implemented.
I. Poverty and Growth

Source: CountryEconomy.com

Brunei Darussalam’s HDI value for 2017 is 0.853— which put the country in the very high
human development category. Between 1990 and 2017, Brunei Darussalam’s HDI value increased
from 0.782 to 0.853, an increase of 9.1 percent. The graph reviews Brunei Darussalam’s progress
over the years. The Human development Index relies on indicators to come up with the data
presented, these are namely, life expectancy, education and per capita income. Brunei over the past
years have exceeded these indicators and it is increasingly improving with every year. Brunei is
known to be a small but developed country and because it is not overly populated it has managed
to overcome poverty and achieved high human development.
Poverty and Growth is usually measured through determining a country’s poverty line and
the population, which is termed as poverty head count ratio, underneath that border will determine
how evident poverty is in a country. Every country has its own poverty line but Brunei, however,
has no official indication for poverty. The government did form a special committee to study about
its poverty situation however the poverty line at the time the case study was conducted was not yet
defined. In recent studies of UNESCO, they have extracted the poverty line of Brunei that was
officially established which was $1.90 a day. Population under the poverty line remains unsolved
due to country’s on-going studies to acquire data.
This part of the chapter displayed the human development index value from the country in
replacement of measuring poverty. According to the World Health Organization regarding poverty
and development, Countries where the level of poverty is relatively large tend also to exhibit low
values of human development, thus lowering the mean values of the development measures. This
would also mean that if the country exhibits high human development then it is less likely to hone
poverty which, in Brunei’s case, is almost unclear because of the country’s escalating human
development index. the HDI also masks inequality in the distribution of human development
across the population at the country level.

II. Inequality and Growth

 The graph above shows the movement of Real Gross Domestic Product Growth Rate with
should correlate with inequality.
Source: CEIC Data
Brunei’s GDP per capita prior to 2000 is from the World Bank. In the recent reports,
Brunei’s GDP gained to 0.483% YoY in Mar 2019. Brunei’s nominal GDP reached 3.350 USD in
Mar 2019. Its GDP deflator increased 3.669% in March 2019. Gross savings rate of Brunei was
measured at 49.382% in March 2019.
Brunei's GDP Per Capita reached 30,666.620 USD in Dec 2018, compared with
28,237.873 USD in Dec 2017. Brunei GDP Per Capita data is updated yearly, available
from Dec 1965 to Dec 2018, with an average number of 15,816.108 USD. The data reached
an all-time high of 47,776.369 USD in Dec 2012 and a record low of 1,113.819 in Dec
1965. CEIC calculates annual GDP per Capita from annual Nominal GDP and annual
Population. CEIC converts GDP per Capita into USD.
Brunei’s economy is almost totally dependent on the exploitation of its vast reserves
of petroleum and natural gas. they also have made the country dependent on a single commodity
that is subject to market fluctuations. From 2011 to 2013 they supported their country with exports
of crude oil and natural gas with revenues from the petroleum sector accounting for over half of
the GDP. The proceeding years after slowly decreased in GDP because economy stagnation and
less exports.
According to Britannica, For the 2015-2016 fiscal year, Brunei is currently on track to
report a fiscal deficit valued at 16 percent of its GDP. When global oil prices plunged in 2015, an
analysis by Paul Pryce of UPH Analytics in 2016 revealed that government revenue decreased by
70% in 2016. According to Brunei’s Department of Economic Planning and Development in 2016,
Brunei recorded negative growth that year, with a GDP decline of 2.5%. Meanwhile, the IMF has
forecasted that while Brunei’s economy contracted to -1.3% in 2017, it will finally chart positive
growth in 2018 with an increase of 0.7%. Brunei was even listed in Forbes Magazine in December
2017 as one of “Asia’s Five Weakest Economies by Growth.”
Source: The ASEAN Post
Inequality and Growth is commonly measured through determining a country’s
GINI coefficient stand. It measures the extent to which the distribution within an economy
depart from a perfectly equal distribution. According to the World Bank, if the wealth is
distributed evenly among all persons the Gini coefficient is zero while in a score of one means that
a single person holds all the wealth. In short, zero represents perfect equality, while 1 represents
perfect inequality. So far, from gathering data, Sources only gave an imputed GINI
coefficient of Brunei without a specific year, which is 0.405. So, to fill in data for
measuring Brunei’s inequality the country’s GDP became a consideration. According to
Naguib (2015), It seems that higher inequality levels are associated to higher levels of per capita
GDP and per capita GDP growth. And this is because the distribution of income whether equal or
inequal affects the GDP of a country, thus the decision was on presenting Brunei’s Gross Domestic
Product Rate.

III. Economic Characteristics of High-Poverty Groups:

Women in Brunei
In Brunei, ladies are viewed as people of "high status". The law denies lewd
behavior and stipulates that whoever attacks or uses criminal power, expecting in this way
to shock or realizing it is probably going to shock the humility of an individual, will be
rebuffed with detainment for as much as five years and caning. There is no particular
domestic violence at home law, however captures have been made in abusive behavior at
home cases under the Women and Girls Protection Act. A special unit staffed by female
officials has been built inside the police division to examine household misuse and
youngster misuse objections. A hotline was accessible for people to report abusive
behavior at home. The Ministry of Culture, Youth, and Sport's Department of Community
Development gives guiding to ladies and their life partners.
Couples and people reserve the privilege to choose the number, separating, and
timing of their kids, and approach preventative gadgets and strategies through the
legislature and private facilities. As per the administration's translation of Qur'anic
statutes, Muslim ladies have rights like those of Muslim men in areas, for example, divorce
and child custody. Ladies had equivalent access to HIV treatment and advising, just as
follow-up treatment. Abortion in Brunei is primarily illegal, with an exception if a
woman's life is danger.
In recent years, Bruneian ladies have begun to accept "places of duty" in the Government
of Brunei. They can take employments in the military of Brunei; anyway, they are not
permitted to serve while in battle circumstances
Minorities in Brunei
Malays take up 65.7 percent of the country's population; Chinese occupies 10.3 percent,
indigenous individuals, on the other hand,3.4 percent and other, 20.6 percent. There are around
25,000 Iban and Dusan innate individuals which live downpour backwoods. There are a few
Indians residing. A portion of the others are outside workers acquired to fill in as development
laborers, household help and perform occupations that Bruneians would prefer not to do. The
Bruneian government runs a lodging plan for landless indigenous individuals.
The enormous number of stateless people and changeless inhabitants in Brunei, a large
portion of whom are Chinese, Koreans and other minority gatherings, can't straightforwardly claim
land in the nation and are prevented a number from claiming different rights, for example,
sponsored restorative consideration. There has been some moderately late unwinding of the
nation's citizenship laws in 2003 which have allowed more established people to move toward
becoming residents without breezing through a composed citizenship test.
There has anyway been a crackdown since February 2004 on 'more current' migrant
laborers who have been exposed to changes to Brunei's migration laws which presented retroactive
jail sentences and caning for laborers who had outstayed their work grants, illicit settlers looking
for work, and outside specialists not really utilized by their underlying backer.
Concerning indigenous people groups, "Brunei is an Islamic state, with the official national
belief system of Melayu Islam Beraja (or Malay Muslim Monarchy). There has kept on being
weight on the non-Muslim populace to change over to Islam and receive Malay culture. Non-
Malay and non-Muslim minorities keep on being exposed to horrible treatment by Brunei
specialists. Under the Constitution, Bumiputeras (Malays just as indigenous Tutong, Belait,
Dusun, Murut, Kedayan and Bisaya) appreciate various governmental policy regarding minorities
in society advantages denied others, including indigenous Iban and Penan minorities who are not
viewed as Bumiputeras.
Non-conventional religious minorities face specific challenges, with gatherings, for
example, the Baha'is being prohibited. Non-Muslim minorities are not allowed to hold open
religious parades, and all schools, open and private, are likewise restricted by the Ministry of
Education from instructing of different religions, while Islam must be educated in all schools.
Indigenous People in Brunei
The indigenous minority tribes in Brunei are equivalent to the neighboring Malaysian
conditions of Sabah and Sarawak. Dusun comprise about 6.3 percent of the populace, and Murut
around 6 percent. Generally animistic, however many have changed over to Islam and Christianity,
they are likewise customarily relocating swidden cultivators and authorities of wilderness items
living in the forested inside of the nation. The Kedayan are Malay-talking and Muslim
agriculturalists. In spite of their language and religious affiliations with the ethnic Malay dominant
part, Kedayan are viewed by Bruneians as closer in status to the animist, inside inborn gatherings
due to various comparative social practices.
Iban, once in the past referred to likewise as Sea Dayaks, are generally 4.7 percent of the
populace, live for the most part along the fringe with Sarawak (see Malaysia). They are considered
to have entered Brunei from Sarawak during the rule of the well-known "white Rajahs" of the
Brooke family, and it is presumably hence that they are not considered by Brunei specialists and
its Constitution as Bumiputera. Generally engaged with head-chasing and living in longhouses,
they have all the more as of late become workers and are ending up increasingly urbanized. The
Penan are maybe under 300 people in Brunei and are woodland tenants who generally pursued an
itinerant lifestyle. They customarily reaped and utilized blowpipes with toxin tipped darts to chase
creatures. Most currently live in lasting settlements and take part in all year cultivating.
Source: Facts and Details

IV. Policies Implemented

Wawasan Brunei 2035
With abundant natural resources and a small population, Brunei Darussalam has one of the
highest levels of GDP per capita in Southeast Asia. However, over the last decade its gross
domestic product (GDP) per capita growth rate has been the lowest in the region. Structural
reforms to depart from the hydrocarbon-dependent development are critical to enhance
productivity and to sustain economic growth.
The Tenth National Development Plan 2012-17 (NDP10) is the second medium-term
development plan under the national long-term development vision, known as Wawasan Brunei
2035, or Vision Brunei 2035. It puts the emphasis firmly on “accelerating economic growth”
through high productivity to achieve the target of 6% average annual economic growth.
To realize that goal, Brunei’s economy needs to be less reliant on the oil and gas
sectors, which accounted for more than 60% of GDP and over 90% of total exports. It is urgent to
foster the development of other high-value-added manufacturing and services sectors. In line with
NDP10, the government has set out six strategic development thrusts. Three are particularly
significant: an environment conducive to business; an educated and highly skilled population and
a progressive, productive economy based on knowledge and innovation.
Owing to the country’s reliance on the hydrocarbon sector, there has been relatively
moderate development in the private sector in Brunei Darussalam. The oil and gas industry have
dominated the economy for the past 80 years. Hydrocarbon resources account for over 90% of
Brunei Darussalam’s exports and more than 50% of its gross domestic product (Brunei Economic
Development Board). The private sector outside the oil and gas industry has contributed steadily
around 20% to GDP in recent years. In terms of employment, while the number of employees in
the private sector fell from some 125 000 in 2007 to around 117 000 in 2010, they account for a
significant share of total employment. On the other hand, the public sector employment level grew
slightly but steadily.
Source: Structural Policy Country Notes
 Chapter 3
URBANIZATION AND RURAL-URBAN MIGRATION DEVELOPMENT
This chapter primarily focuses on the relationship of urbanization and economic growth of
Brunei Darussalam. Also, it gives emphasis to the urban vs. rural population, informal urban labor,
and urban employment in Brunei with the aligned policies implemented in the country.

I. Relationship of Urbanization and Economic Growth

Urbanization in Brunei from 2007 to 2017

This shows the degree of urbanization in Brunei. It clearly illustrates that as the year
increases, the percentage of people living in urban areas, also increases. In the year 2017, there are
77.31 percent of Brunei’s total population lived in urban areas and cities. People in Brunei migrate
from rural to urban areas for economic/employment opportunities, and also for the better future of
their children. Most countries rural areas are poorer than urban. Fewer jobs are available in rural
areas. People are pushed away from the rural areas because of the lack of opportunities in such
areas. Many young people are also pushed by a lack of cultural/social opportunities in the rural
areas.
Another body of theory has evolved that sees migration as a major component of household
survival theory, in turn derived from peasant survival (Arguello, 19881). Thus, the long-term or
the temporary migration of a person from a household is seen as a way for the household to
maximize its chances for survival in an uncertain environment by diversifying its sources of
income. This idea has been incorporated into the “new economics of labor migration” (or “new
economics of migration”) of Stark et al., viewing migration as a means by which the household
spreads risks.

Brunei GDP per Capita from 2007 to 2018

GDP per capita is a measure of a country's economic output that accounts for its number
of people. It divides the country's gross domestic product by its total population. That makes it a
good measurement of a country's standard of living.
Brunei's GDP Per Capita reached 30,666.620 USD in 2018, compared with 28,237.873
USD in 2017. Brunei GDP Per Capita data is updated yearly, available from 1965 to 2018, with
an average number of 15,816.108 USD. The data reached an all-time high of 47,776.369 USD in
2012 and a record low of 1,113.819 in 1965.
From the year 2008 to 2009 the country experiences a GDP-per-capita downfall its large
budget deficits continue, exacerbated by relatively low oil and gas prices that reduce government
revenue. Brunei benefits from moderately well-maintained monetary stability and a relatively high
degree of market openness. In relation to this, according CEIC (2019) in the latest reports, Brunei's
GDP contracted 0.483 % YoY in Mar 2019. Brunei's Nominal GDP reached 3.350 USD in Mar
2019. Its GDP deflator (implicit price deflator) increased 3.669 % in Mar 2019. Gross Savings
Rate of Brunei was measured at 49.382 % in Mar 2019.
 In conclusion, Urbanization is quite important because it plays a great role in our economy
as it brings higher economic scale to our society. So, urbanization and economic growth has a
significant relationship. Brunei’s agricultural and urban lands are still somewhat linked spatially
because the primary source of their income is in the agriculture sector. Furthermore, the
urbanization helps to increase the economic growth of Brunei in terms of household commodities
but if not taken carefully by the government it can result to a fall back of the economy.

II. Rural vs. Urban Population

Urban and Rural Population in Brunei from 2006 to 2016

Urban and Rural Population

90
80 73.5% 74.8 % 75.5% 76.3% 77.1%
70
77.5%
60
50
40
30
20
10 26.5% 25.7% 24.5% 23.2%
0
23.8%
2006 2008
22.5% 2010 2012 2014 2016

Urban Rural Column1

Source: World Bank

Urban population in Brunei was reported at 73.5 % in 2006. Brunei is undergoing a

transformation from a rural economy to urban economy. Due to the migration of people from rural
to urban, Brunei will have a gradual increase in the proportion of people living in urban areas, as
where food, shelter, and employment occur. This will be an advantage for Brunei from
urbanization, this will make the managerial capacity of city government stronger. Each year, the
percentage of urban population increases, from 73.5 % in 2006, to 74.8% in 2008, up to 77.5 % in
2016. According to World Population review (2018) 75% of Brunei's population lives in urban
areas, with an urbanization rate of more than 2% per year.
 Rural Population in Brunei was reported at 26.5 % in 2006. As urban population increases,
the population in rural areas also decreases, due to rural-urban migration. Moreover, people know
that there are more opportunities in urban areas that will make them earn higher salaries which can
sustain the needs of their family.
And also, it can provide a proper education for their children which can help to build a
better future. That is why from 26.5 % in 2006, 25.7% in 2008, and in 2016 the population of rural
areas in Brunei continuously decreases into 22.5 %.
And since 75% of the total population are living in urban areas it can easily be concluded that there
are 15% of the total population in Brunei that are living in rural areas.

III. Informal Urban Labor Force

The statistics of the informal sector in the realm of official statistics are finite and limited.
Many studies have shown that in developing countries, informal sector continue to be a
large and growing component of an economy. Informal economy constitute important portion of
labor force as informal sector creates informal employment. It is perceived that informal sector in
Brunei contribute to its economy in terms of employment by providing opportunities to those who
cannot be absorb by formal sector. Even though it contributes to the economy, employment in
informal sector is not included in Brunei’s official labor force statistics. The characteristics of
informal employment include lack of protection for non-payment of wages, unsatisfactory
occupational health and safety conditions and absence of social benefits such as pensions, sick pay
and health insurance. In relation to this, according to Labor Force Survey (LFS) in 2014 about
18,000 persons were employed in the informal sector, corresponding to about 9.5 per cent of the
total employment. The informal sector comprises all unregistered private business enterprises that
did not keep record of accounts including domestic workers engaged by households. The
majorities of the employed persons in the informal sector were non-local workers (65.3 per cent),
female (71.3 per cent), and engaged as domestic workers by households (54.4 per cent). More than
87,600 employed persons or 46.2 per cent of the total employed population had informal
employment without social security coverage, paid sick leave and paid annual leave. Around
69,800 workers with informal employment were employed in the formal sector.
 IV. Urban Unemployment
Urban Unemployment in Brunei from 2007-2018

Source: https://www.ceicdata.com/en/indicator/brunei/unemployment-rate

As we look from 2007 to 2008, urban unemployment showed a generally stable but
slightly increasing trend. Then, Unemployment soared as the crisis hit. In 2017, urban
unemployment rate is on its highest rate with 9.32%. Brunei's Unemployment Rate dropped to
9.22 % in 2018, from the previously reported number of 9.32 % in 2017.Brunei's Unemployment
Rate is updated yearly, available from 1991 to Dec 2018, with an average rate of 5.76 %.
The data reached an all-time high of 9.32 % in 2017 and a record low of 4.70 % in 1991. From the
year 2014 up to 2017 urban unemployment is rapidly increasing. In relation to this, according to
the survey, more people are now working in the private sector compared to previous years. The
number of locals employed in the private sector last year was 66,400 persons compared to 54,000
in 2014 — a 6.9 percent increase, bringing the ratio of public to private sector employment to
40:60 in 2017. Among other findings, the Labor Force Survey also highlighted labor
underutilization, which refers to the mismatch between labor supply and demand or unmet need
for employment among the population and a drop in Brunei’s average monthly income. And also,
according to CEIC in the latest reports, Brunei's Population reached 0.43 million people in 2017.
The country's Labor Force Participation Rate dropped to 65.15 % in 2018. Unemployment Rate in
Brunei is expected to be 9.20 percent by the end of this quarter, according to Trading Economics
global macro models and analysts’ expectations. In the long-term, the Brunei Unemployment
Rate is projected to trend around 9.10 percent in 2020, according to our econometric models.
Despite being said as one of the richest countries in the world with a relatively small
population, Brunei faces an unemployment rate of 6.7% in 2011 (The World Factbook, n.d.),
creating local news’ headlines a number of times in recent years. One of the causes of
unemployment in Brunei is low qualification. The permanent secretary of culture, youth and
sports, Dato Haji Mohd Hamid, mentioned that among the 18,000 locals unemployed, a large
number of them are those with only primary or secondary level qualifications (Koo, 2013), which
makes it difficult for them to find a suitable job.
Though urban unemployment still higher than the rural areas. The explanation for this is
that many people who are living in the rural areas tend to move to the cities or in urban areas in
search for employment opportunities.

V. Policies Implemented
Setting up a competition commission and a department for competition and consumer
affairs
In August 2017, the Prime Minister’s Office announced the creation of a national competition
commission to promote business competition in line with the Competition Order of 2015. This is
a competition law that seeks to promote efficiency in the economy and consumer welfare. In turn,
the aim is to foster economic growth, as per Brunei Darussalam’s national strategy – Kawasan
Brunei 2035. Brunei Darussalam has also set up a new government department for competition
and consumer affairs (under the aegis of the department for economic planning and development)
to investigate and conduct the administrative tasks for the new competition commission. In this
connection, the competition commission took part in an engagement session in February 2018 at
the economic planning department.

Strengthening local SMEs

As an oil-producing nation, Brunei Darussalam is one of the richest countries in GDP per
capita terms in the region. Brunei Darussalam’s economy is mainly led by exports of crude oil and
natural gas; when measured at constant prices based on the year 2010, oil and gas continue to
account for 43.6% of GDP in 2017.
However, their production continues to decline gradually from 2010. The government has
taken steps towards diversification through a variety of initiatives. In an effort to lessen the
economy’s dependence on the oil and gas sector, and to generate more jobs in other sectors, the
government has been focusing on strengthening SMEs domestically, so that they are competitive
in exporting to the global market.
 Chapter 4
THE ENVIRONMENT AND DEVELOPMENT
This chapter elaborates the Environmental Policies in Brunei Darussalam.

I. Policies Implemented

Policies are important in every country’s development. They implemented some

environmental policies to ensure that its financial development does not exhaust the nation's
critical normal resource base. If Brunei Darussalam growth depends on unregulated deforestation
also, a developing dependence on non-renewable energy sources, its monetary achievement will
demonstrate unsustainable and keep the nation from accomplishing its global pledge to lessen
Greenhouse gasses outflows.

The Government of Brunei Darussalam has this called National Development Plans (NDP),
where the Government has continued to address the need to protect and conserve the country’s
environment from pollution and excessive exploitation of natural resources. At the same time,
efforts have been undertaken to strengthen existing administrative machinery. In particular, the
National Committee on Environment and the Environment Unit has been established for the
purposes of coordinating environmental programs and activities.

Environmental Protection and Management Order (EPMO), 2016

To help systematic and coordinated administration and insurance of the earth, the Government
of Brunei Darussalam is thinking about the order of a direction in regards to the ecological
administration. The Environmental Protection and Management Order (EPMO) 2016 is made
under Article 83(3) Constitution of Brunei Darussalam. That this order shall apply to the territory
of Brunei Darussalam and establishes that it shall be the duty of every person to take, so far as is
reasonably practicable, such measures to ensure the protection of the environment and the
prevention, reduction, or control of any potential hazard that may cause pollution or damage to the
environment. In this policy, it shows that the government of Brunei Darussalam implemented this
policy to protect the environment and possibly uncertainties that can cause problem to the
environment. This policy is intended to every person (Article 83(3)), and to those who operates
business that they should follow the rules and regulations of the policy so that they will not harm
the environment. In this policy there is called a Notification Matrix, where they are obliged to
submit a written notification to the authority and they shall complete the Notification Matrix before
they can proceed to a certain activity.

In 2016 this policy was amended because of the number of humans who do things that is
unnecessary for the environment that might lead to destroy the environment. During this year haze
is very rampant haze in Brunei frequently occur between May and October when the southwesterly
monsoon winds prevail and also due to open burning in Brunei and this leads to destroy the forest
of their country. According to Martinah Hj Tamit that the EPMO is finalizing the amendment and
the regulation will impose fines to those found carrying out open burning as a deterrent to this
irresponsible and potentially dangerous activity. Hence in 2017 there’s a big improvement in the
air quality of Brunei it is not polluted at all due to the EPMO 2016 and it is realized that proper
management of the quality of the environment is essential in view of urbanization and economic
growth.

Petroleum Mining Act

Brunei’s economy has been dominated by the oil and gas upstream and downstream industries
for the past 80 years. Brunei’s oil and gas fields produce approximately 127,000 barrels of oil per
day (bbl./day) and 243,000 barrels of oil equivalent of natural gas per day (US Embassies Abroad).
In order to safeguard the natural resources of Brunei Darussalam, the Government of Brunei
implemented this act to control the natural resources of the country. The Law states that
Government responsibility includes controlling of natural resources, controlling activities which
may have environmental impacts and regulating legal actions. In this act there is a restriction of
who should be the one that will explore the minerals. The Government will then find bidders that
would join the exploration of the minerals.

Forest Act (Amendment) 2007

 These Law establish requirements in order to perform forestry activities within the National
territory of Brunei. In particular, they specify licensing requirements and forestry fees to be paid
for specific activity. Sustainability manage forests have multiple environmental and socio-
economic functions important at the global, national and local scales, and play a vital part in
sustainable development (Mette Løyche Wilkie 2010). Forest plays a big role for humans because
we depend on forest for our own survival, from the air we breathe and to the wood we use. It plays
a vital role in sustainable development since it provides livelihoods for humans, forest also offer
watershed protection, prevent soil erosion and mitigate climate change. In Brunei Darussalam as
they need for more land its pristine rainforests are disappearing rapidly (Peter Engbers 2010). How
can they attain Sustainable development if they will not conserve the forest one major scenario
that might happen if they will not conserve the forest and its biodiversity is that the lack of clean
water and clean air, in this scenario it can result in adverse social and economic impacts on
communities and economies?

However, in 1994 there were recorded 382 cases of vegetation fires which destroyed around
390 hectares of vegetation cover. The fire was caused due to occurrences of dry spells vegetation
that occur fire frequently in that year. However, there is one cause and that is the result of open
burning activities. Local vegetation fires in Brunei can be argued as the major contributor for
occurrences of haze episodes in the country. The severe haze episode is in 1994 which is one of
the most severe incidences of haze in the country. Hence, they implemented this act to lessen the
number of cases about open burning in Brunei Darussalam. In order to lessen the cases of open
burning the country of Brunei Darussalam initiated several activities that will help in informing
the citizens about the haze that is been the cause by open burning. The Government of Brunei then
disseminated information through the media-television, radio and newspapers. The Ministry issued
a “haze warning”. The public were advised to restrict outdoor activities that involve physical
exertion that might lead to illness.

Clean Air Act

 This Act regulates air emissions from stationary and mobile sources that regulates the
hazardous air pollutants. Environmental pollution is currently not a major problem in Brunei
Darussalam, however with the diversification of their economy and industrial growth coupled with
increasing population, it is bound to become severe in the future.

In this regard, not only government but every individual, private sectors and NGOS are
playing their role in ensuring environmental sanitation. The air quality in Brunei is good in general,
however there are some factors that contribute to impairment of air quality, which includes open
burning and trans-boundary haze pollution. Open burning is still rampant in Brunei, mainly
backyard burning in residential and commercial areas and this issue then pertaining to the Penal
Code Amendment Order of 2016. Environmental sustainability is the sine qua non for sustaining
quality of life (Nurul Amalina binti Hj Ahmad), and economic competitiveness of the country like
Brunei Darussalam. According to Albert Einstein “Environment includes everything that isn’t me”
which means that Environment includes everything in the world.

Hence, Air pollution in Brunei is now a growing concern in the country. It is primarily
because of the lack of information and knowledge of the citizens in Brunei most of them are not
aware of what are the consequences if the pollution in their country become worst in the near
future. However, Air quality in Brunei is comparatively clean, this nonetheless does not mean that
Brunei Darussalam is free from pollution there are some studies have indicated a very high TSP
level. Windblown dusts are the most likely sources and also, we must not regard that one major
sources of air pollution in their country is due to motor car. In 1992 figures shows that there are a
lot of number of registered vehicles in Brunei Darussalam and was about 144,159. According to
Bandar Seri Begawan (BSB) air quality is affected by vehicular traffic emitting CO, NOx,
particulate, HC, and SOx. Hence the Sulphur content of the gasoline and diesel fuels used in Brunei
is relatively low however vehicle tests are also being carried out as part of the registration process.
The testing of gasoline vehicles includes emission test for carbon dioxide and hydrocarbons at
engine and for diesel vehicle a smoke test at free acceleration, similarly motor vehicles are also
tested for carbon monoxide and hydrocarbon levels.
Water Quality Act Chapter 121, 1962

Water quality in Brunei has the potential to decrease in the near future if action is not taken.
This Act implements a safe water and protecting the river basins. Surface water supply, which
make up 99 percent of water utilized for all purposes in Brunei. The Brunei rivers upper reaches
have been a major freshwater source for the western part of the country. High levels of water
pollution in the Brunei river have been traced to waste water treatment plants, industrial discharge,
and polluted streams. The country of Brunei then addresses the water problem and then
implemented this act to improve watershed protection and manage pollution.

However, as of this moment the water quality of Brunei Darussalam is comparatively good. All
the people have an access in piped drinking water and there is no water interruption and they
provide services to its people 24 hours a day. Hence, they implemented this act to ensure that there
will no problem in the quality of water and possibly protect it and manage pollution of the water.
 Chapter V
BALANCE OF PAYMENTS AND DEBT CONDITION
This chapter primarily focuses on the current account balance and financial account of Brunei
Darussalam. also, it gives emphasis to the debt condition of Brunei with aligned of policies
implemented in the country.

I. BALANCE OF PAYMENTS WITH COMPONENTS

Current and Capital Balance in Brunei Darussalam from 2001-2018

This shows the current and capital account balance data is updated yearly. In 2018, current
and capital account for Brunei Darussalam data was reported at 1.068 USD bn. This records a
decrease from the previous year in 2017, this is because account posted lower deficit in goods and
services, primary income, portfolio investment, foreign direct investment and foreign direct
investment % of GDP. Though Brunei Darussalam current and capital account balance fluctuated
substantially in recent years, it tended to decrease through 2015-2018 period. The data reached an
all-time high of 6.931 USD bn in 2008 because its surplus was due to expansion of the exports and
imports of goods and services net factor income and net transfer payments. It has surplus around
2006 to 2014 and services account posted lower deficit in 2016 and a record low in 2018. In 2001
it experiences a difficulty to rise up because of the lower goods and services and foreign exchange
but when the government started to govern the country according, many people started to invest
in Brunei. And because pf that the Brunei’s current and capital account increases until year 2015.
Brunei’s BN: Bop: Current & Capital Account data remains active status in CEIC and is reported
by International Monetary Fund.

The banking industry is controlled by the Association of Banks, in liaison with the
government. In 1999 there were nine banks operating in Brunei. Of these, three were locally
incorporated and six were foreign, among them the Hongkong Bank, Malayan Banking Bernhard,
and Citibank. The International Bank of Brunei, in which the sultan has a 51% stake, is the larger
of the local banks. The other, the National Bank of Brunei, was seized in 1986 by the government,
which charged the majority shareholders with irregularities, and later closed in the early 1990s.
Other banks are the Badura Bank, Sime Bank, the Development Bank of Brunei, the Overseas
Union Bank, and the Standard Chartered Finance (Brunei) Berhad. The managing director of the
Brunei Investment Agency (BIA), Abdul Aziz Abdul Rahman, met France's Treasury director,
Jean Lemierre, in mid-December 1996 to discuss the possibility of opening a BIA office in Paris.
BIA's French investments are currently managed from the agency's offices in London and Brussels.
Approximately half of the country's revenue is now derived from the income from these
investments. The Brunei Investments and Commercial Bank, a subsidiary of the Brunei Investment
Agency, acquired a 13.4% stake in the Australian Macquarie Bank in November 1996, making the
BIA the single largest shareholder. The US Central Intelligence Agency (CIA) reports that in 2000
the purchasing power parity of Brunei Darussalam's exports was $3 billion while imports totaled
$1.4 billion resulting in a trade surplus of $1.6 billion.

Brunei's Financial Account: Foreign Investment: Net outflows

 During 1990s Brunei outflows have difficulty to rise up because they don't have sufficient
capital and supply to export product so around 1990s to year 2008 brunei foreign direct investment
outflow remain lower but in 2010 its foreign direct investment fall down it reaches a negative
outcome but in year 2012 it started incressing accordingly. During 2014 when many countries are
starting investing directly to Brunei helps them to recover from a low record from the previous
year in 1990 to 2010. In 2013 the data reached an all-time high of 859.058 USD. Net Outflows
data was reported at 507.944 USD mn in 2015. This records an increase from the previous number
of 381.819 USD mn for Dec 2014.
According to CEIC, Brunei’s BN: BOP: Financial Account: Foreign Direct Investment: Net
Outflows data remains active status in CEIC and is reported by World Bank. The data is
categorized under Global Database’s Brunei – Table BN.World Bank.WDI: Balance of Payments:
Capital and Financial Account. Foreign direct investment refers to direct investment equity flows
in an economy. It is the sum of equity capital, reinvestment of earnings, and other capital. Direct
investment is a category of cross-border investment associated with a resident in one economy
having control or a significant degree of influence on the management of an enterprise that is
resident in another economy. Ownership of 10 percent or more of the ordinary shares of voting
stock is the criterion for determining the existence of a direct investment relationship. This series
shows net outflows of investment from the reporting economy to the rest of the world. Data are in
current U.S. dollars.; ; International Monetary Fund, Balance of Payments database, supplemented
by data from the United Nations Conference on Trade and Development and official national
sources.

DEBT CONDITION
Brunei's Household debt: % of Nominal GDP: Annual from 2011-2018

This shows the debt condition of Brunei Darussalim. During 2011 up to 2014 there are
difficulty in brunei's household debt because of the lack of flow of funds statistics but Brunei's
household debt accounted for 15.9 % of the country's Nominal GDP in 2018, compared with the
ratio of 17.7 % in the previous year. Brunei's household debt to GDP ratio is updated yearly,
available from 2011 to 2018. The data reached an all-time high of 19.4 % in 2016 and record low
of 12.4 % in 2012. Household Debt includes Vehicle, Credit Card, Consumer Durables, Home
Improvement - Interior Decorations etc., General Consumption and Other Personal Loans, Land
Purchases and Constructions, Housing Purchase and Home Improvement (Structural, Renovation,
etc.). Household Debt covers Domestic loans only.

According to CEIC, CEIC calculates annual Household Debt as % of Nominal GDP from quarterly
Household Debt and annual Nominal GDP. Monetary Authority Brunei Darussalam provides
Household Debt in local currency. The Department of Economic Planning and Development,
Ministry of Finance and Economy provides Nominal GDP in local currency. Loans are used due
to the lack of Flow of Funds statistics.

In the latest reports, Brunei's Household Debt reached 2.1 USD bn in Mar 2019. Brunei's Foreign
Exchange Reserves was measured at 3.3 USD bn in Mar 2019. The Foreign Exchange Reserves
equaled 10.9 Months of Import in Mar 2019. Brunei's Domestic Credit reached 3.7 USD bn in Mar
2019, representing an increased of 3.1 % YoY. The country's Non Performing Loans Ratio stood
at 5.1 % in Mar 2019, compared with the ratio of 4.8 % in the previous quarter.

POLICIES IMPLEMENTED
WTO Trade Policy Reviews
Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member
countries’ trade and related policies are examined and evaluated at regular intervals.The economy
of Brunei Darussalam remains highly dependent on oil and gas, which accounts for about two-
thirds of output, and over 90% of merchandise exports and government revenues. This makes
Brunei particularly vulnerable to an eventual depletion of its petroleum resources, and remains a
cause for concern due to fluctuating international energy prices. The Government is thus
implementing an ambitious diversification strategy and promoting private-sector participation in
the economy, which remains limited.
WTO Trade Policy Review's aims to achieve annual real GDP growth rates of 5-6% which
may require increasing overall productivity, particularly in the government sector (including state-
owned enterprises) being the largest employer. Sizable hydrocarbon exports and the steady
accumulation of long-term foreign assets over many years have provided Brunei with a
comfortable balance of payments position, which also reflects the big gap between savings and
investment.
Legislate and implement competition policy

A condition that is essential to developing the private sector and improving productivity is
increased competition. That requires sound and comprehensive competition policy and law.
Stronger competition in Brunei Darussalam would lead to productivity gains and help in
diversifying the hydrocarbon-dependent economy.
The current level of business competition in Brunei Darussalam needs to be improved.
Notably, Brunei should foster greater competition in key sectors, including banking and
telecommunications. According to the World Bank’s Global Financial Development database,
competition in the banking sector has been less vigorous in Brunei than in the more developed
Southeast Asian countries.