Brunei's Local News - Brudirect.com

Bandar Seri Begawan - The uncertainty in global oil prices and how it will affect Brunei Darussalam have prompted local entrepreneurs and decision-makers to identify the scope of this uncertainty and the implications of future oil prices in relation to other aspects of the local economy.

A talk was held by Asia Inc Forum as part of the organization’s efforts to facilitate discussions on the key issues which affect the Brunei economy. Yesterday's talk was in partnership with TOTAL, I ISBC and Alcoa.

The continuing rise in oil prices has compounded Asian governments' economic woes at a time of record inflation. For instance, Indonesia, a former OPEC member, has since turned into a net oil importer with fuel subsidies accounting for some 13 per cent of Indonesia's 2008 budget.

In May this year, Indonesian officials had to raise fuel prices by a whopping 30 per cent to prevent a budget crisis.

India and Malaysia have both increased prices of government-subsidized fuel, which sparked anger and antigovernment protests.

Wealthier governments are not excluded.

Hong Kong does not currently have fuel subsidies, but imposes high taxes on fuel to discourage people from driving.

However, it is feeling pressure from protesting truck and taxi drivers to lift the taxes. Present at yesterday's talk was D Victor Shum from Purvin and Gertz Inc — an international energy-consulting firm in Singapore — who shared his views on the implications of future oil prices in relation to the Brunei economy.

Overall, high fuel prices could weaken domestic consumption in the Asia region, and when combined with stronger local currencies, could drive up the price of exports. If this happens, economic growth would most likely be slow for the year.

To subsidize or not is a short-term question and Asian governments know that the long term answer lies in reducing dependence on fossil fuels.

Worldwide investment in clean energy is estimated to have reached US$148 billion last year. But very little of it has reached Asia due to the lack of government support for renewable energy policies and legislation. -- Courtesy of Borneo Bulletin