Lord Mayor offers economic expertise

By CT Hj Mahmod

This was disclosed yesterday by the Lord Mayor during a luncheon with the British Brunei Business Forum (BBBF) graced by Prince Abdul Qawi, the royal patron of BBBF.

The Lord Mayor was accompanied by the Lady Mayoress Carole Blackshaw and the British High Commissioner to the country, Mr. Andrew Caie.

Upon arrival, they were greeted by the Chairman of BBBF, Mr. Marcus Hurry.

Also present during the luncheon at the Orchid Garden Hotel were the Minister of Development, Dato (Dr.) Awg Hj Ahmad bin Hj Jumat, the Deputy Minister of Education, Dato Paduka Awg Hj Suyoi bin Hj Osman as well as prominent figures from the private sector.

In his speech, the Lord Mayor spoke of his keen interest of learning more on both the Brunei International Financial Centre and Economic Development Board and to discuss the role it can play in helping to diversify Brunei's economy and efforts to attract foreign direct investment.

"With regards to the Brunei International Financial Centre, if you can provide value, alongside a benign tax regime, coupled with safety, probity and trust, a niche financial centre can be successful," he said. He pointed out that "financial services is an industry that thrives on relationships and personal contract".

However, he raised the issue on the need to have fair and transparent regulations with the minimum of red tape. "Erect barriers and investors will go elsewhere," he stressed.

Five main areas were underscored by the Lord Mayor. The first was 'banking', in which he said small businesses needed to have access to reasonably priced and medium term loans from the banking system. "With this, it will generate more business volume and importantly, more liquidity and depth in commercial and financial market."

Second area was 'Insurance & Reinsurance', where without proper cover, new production capacity will not be built and firms will be less inclined to take risk. However, he pointed out that an open insurance market draws in foreign capital and capacity from outside that will result in spurred investment and growth.

Third area was 'Fund Management' - the huge provider of liquidity in the market place, that proves the basis of a sophisticated pension industry and considerable insurance, mutual and other investment funds.

Fourth is the need for a stock exchange, which is an important element, for there will always be a need for a local exchange to trade local stocks, which do not command international interest. And lastly, technology, the continuous expansion of the internet in allowing more information to flow-faster, cheaper, and in a more secure manner.

He also brought up topics highlighting the scourge of financial crime such as money laundering and the financing of terrorism. Although Brunei has done much already to protect itself in this regard, he advised that the country should remain ever vigilant and to constantly update its defences.

"With the growing population, the demand for higher standards in the provision of government services continues. And yet at the same time, the government is under pressure to keep public finance under control," he went on to say.

According to Lord Mayor, one way to resolve this dilemma is to transfer assets to private sector, that comes in three stages.

First stage is privatisation that can take in the form of restructuring, corporatisation where he highlighted the 'corporatising and rebranding JTP as Telbru', modernisation and commercialisation.

Second stage is competitive tendering, which is the simple way of reducing costs of providing the ancillary services that support public service delivery. And lastly 'Public Private Partnership' (PPP) - the procurement of public services, through a better contractual and construction process.

"The City of London investment banks, legal, accountancy and PR firms are now recognised worldwide as the leaders in the fields of privatisation, restructuring and PPP," he explained.