Brunei Seeks to Improve Business Environment, Diversify Economy Ahead of AEC Compliance
Brunei has acknowledged the need to diversify its economy away from its current focus on oil and gas industries, particularly with the ASEAN Economic Community soon to be implemented. As such, the government is attempting to foster the creation of new core industries and attract greater foreign investment. The governmental plan “Vision 2035” is part of the official attempt to create a more attractive business environment by developing a stable and economic climate in the country.
Brunei’s economy is still heavily dependent on oil and gas. According to the country’s Minister of Industry and Primary Resources, YB Pehin Dato Hj Yahya, “the oil and gas sector currently makes up close to 67 percent of our Gross Domestic product (GDP); represents close to 90 percent of the government’s revenues; contributes a staggering 96 percent of our exports; but employs less than five percent of our workforce.”
The ASEAN Economic Community (AEC) is intended to facilitate the creation of a single market and production base, partly through the near elimination of inter-region import duties. Nearly 80 percent of the AEC blueprint, a total of 259 different measures, has now been concluded in anticipation of its entry into force by December 2015.
ASEAN – the Association of Southeast Asian Nations – was formed in 1967 and comprises 10 Asian countries as an economic trade bloc. It includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Collectively, ASEAN represents a market of some 600 million people, with a combined GDP of about US$1.8 trillion. Effectively a trade bloc situated between China and India, ASEAN is the third Asian dragon in terms of its development as an emerging economy.
The government of Brunei believes that the country has much to gain from greater economic integration into the region. Key changes that Brunei has already enacted, or will soon implement, include the following:
- Updating tariffs to comply with AEC regulations
- Providing stronger protection for foreign direct investment
- Enacting a National Competition Law
- Creating a stable business environment
- Making business practices more flexible and cost effective
Brunei’s permanent secretary at the Ministry of Foreign Affairs and Trade, Lim Jock Hoi, has stated “there will be more transparent rules and regulations for importers and exporters, as well as access to settlement procedures for when trade disputes arise.”
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