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FDI Needed To Create More Jobs
By Shareen Han

Bandar Seri Begawan - Unemployment rate will keep on rising if there is no significant improvement in local and foreign investments in Brunei, said an economist at Universiti Brunei Darussalam.

In an interview with The Brunei Times, the economist who wished to remain anonymous, said more contribution from the private and government sectors were needed to generate more economic activity in the country.

The economist was referring to the long-term implications of Brunei's slow economic growth relative to other economies in the Asean region.

He cited unemployment as a possible cause of concern arising from the sultanate's slow economic expansion.

According to statistics from the Economic Planning and Development Department, the unemployment rate was recorded at 4.3 per cent in 2005, an increase from 3.5 per cent the previous year. However, it fell slightly to 4 per cent last year.

Brunei's total labour force was estimated at 180,000 last year, compared to 170,000 in the previous year.

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There were 4,100 women out of jobs last year, down from 4,200 in 2005. Unemployed men numbered 3,200 last year, up from 3,000 in 2005.

Majority of those unemployed were youths who fall under the 15-34 age group.

Business analysts said the government sector, which employs about 40 per cent of the total labour force, is now saturated, further causing the number of jobless to increase.

Brunei's labour department has also imposed certain restrictions on the employment of foreign workers through a quota system for specific jobs.

Employers are required to ensure that the foreign workers possess the relevant skills for the applied position, to prevent the country from becoming a dumping ground for unskilled foreign workers who could compete with locals for jobs here.

Foreign direct investment (FDI) remains one of the means by which the sultanate intends to achieve its economic diversification plans outside the oil and gas industry.

However, incoming FDI totalled only US$103 million ($1.58 million) in 2004, a relatively small figure compared to the US$1,035 million recorded in 2002 and US$2,000 million in 2003.

On the other hand, more employment opportunities were expected to be created to address the slow economic growth.

The $2.3 billion Pulau Muara Besar port project, under the Brunei Economic Development Board (BEDB), is set to speed up the country's diversification drive. It is expected to generate an estimated 4,000 jobs.

Another potential investment is the setting up of the first small medium enterprise (SME) Innovation Centre, which was originally scheduled for completion in April last year.

The development of SMEs was emphasised in the 8th National Development Plan from 2001 to 2005, as part of the government's efforts to expand private sector growth.

A recent economic outlook by Asian Development Bank's Asian Regional Integration Centre suggested that His Majesty's Government is also looking to boost the Islamic banking sector. -- Courtesy of The Brunei Times

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