Bankers See Boom & Bust Scenario
By Ignatius Stephen

Bandar Seri Begawan - A boom and bust situation leading to increasing number of bankruptcies and bank loan defaults is facing Brunei currently, according to some local bankers and businessmen in the Sultanate.

According to them there has been a boom in car sales and some other commodities ever since the recent government pay increase.

There has also been a slight increase in home property prices, and rentals also show a very small upward trend, real estate officials said. Other businesses like food and retail outlets are going downhill largely because the local spending power has taken a beating.

This has been quite apparent ever since banks moved against easy loans although more prevalent use of credit cards now generally available just for the asking has helped the beleaguered shoppers.

Bankruptcy cases have gone up. "There are so many we have even lost count," said a local court official.

There has been some on going building and civil contract work. But bidding prices are so low it is hard to make money, said a local construction man.

However, the common complaint is that the gains from the recent significant increase in world oil prices is not -percolating down to the local populace in creating a favourable economic climate.

That will involve the implementation of some mega projects and other public spending which could make the difference, observers said.

Even some of the current big projects like the Radio Television Brunei complex in Sungai Akar, the Parliament building in Jalan Kebangaasan and reservoir projects have not made sufficient impression on the local market.

The mushrooming shopping blocks is also threatening to flood the market and it is feared a glut may soon follow bringing disaster to this particular sector, economists say. -- Courtesy of Borneo Bulletin

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