Brunei's Growth Is Slowest In Asean
By Shareen Han

Bandar Seri Begawan - Brunei's economic growth is expected to be the slowest in the Southeast Asian region this year, according to the recent outlook of the Asian Development Bank's (ADB) Asian Regional Integration Center,

Poor economic activity outside the oil and gas: sector, including the private and government sectors, is to blame for the country's slow economic growth, said an economist at Universiti Brunei Darussalam.

"There is no significant improvement in investment in the non oil sector, but a substantial increase of revenue in the oil sector," the economist, who requested not to be named, told The Brunei Times yesterday.

He explained that Brunei is forecast to have the slowest economic growth in the region because oil prices are expected to drop this year, while the manufacturing and tourism industries in neighbouring countries are "booming".

The local economy continues to be heavily dependent on the oil sector. There is, however, an ongoing drive to diversify the economy.

He added: "The main issue is the non-availability of cheap and skilled labour, and a good market that can generally meet local and foreign demand, making it less attractive compared to other countries."

It is up to the government to make the country an attractive investment destination by offering incentives such as allowing the entry of more foreign workers and lower business taxes, he said.

More local and foreign investments are needed for new development projects, while red tape should be cut down, so that business applications can be processed quickly, he added.

"The country is not spending in a big way to generate more economic activity - meaning that there is less revenue and low surplus for the government," he said.

The economist said that although the country's economy is growing, this can be "misleading" because it does not necessarily reflect overall growth.

Last year's growth was mainly attributed to rising oil prices.

"It does not translate into economic development because there is still not enough economic activity in Brunei, apart from the oil and gas sector," he said. The ADB stated in its report that Brunei's gross domestic product (GDP) growth rate will be 3 per cent.

Last year's high energy prices gave Brunei's economic expansion an estimated 3.7 per cent.

ADB's December 2006 report suggested that the government needed to keep an eye on its growing expenses, following a salary increase for some civil servants last year, as well as recent increases in health and education spending.

However, there will also be an emphasis on developing the Islamic banking sector, as part of the country's economic diversification efforts, with the establishment of the Syariah Financing Supervisory Board early last year.

Brunei's government has also created a small medium enterprise (SME) innovation centre, which will focus on supporting projects to facilitate information and communication technology in e-government.

Vietnam is expected to have the highest economic growth this year at 7.6 per cent, followed by Laos and Cambodia.-- Courtesy of The Brunei Times

Click Here To Have Your Say On This Story

Brudirect.com News

Brunei's Fastest Growing Website with