FDI Flows To Brunei Shrink In 2004
By Man Othman

Bandar Seri Begawan - Foreign direct investment (FDI) to Brunei shrank to US$103 million last year compared to US$2 billion in 2003.

FDI flows to the Sultanate amounted to US$1035 million in 2002, according to the latest World Investment Report released last week by the United Nations Conference on Trade and Development.

Singapore and Hong Kong were among the top three Asian recipients of FDI last year - bagging US$16 billion and US$34 billion respectively. China was the top recipient, attracting US$61 billion.

Foreign direct investment (FDI) in the region of Asia and Oceania broke records in 2004. The report, released last week said the region received US$ 148 billion in FDI - US$ 46 billion more than in 2003 - making it the top recipient among developing regions.

Rapid economic growth, an improved policy environment, and increasing strategic commitments to Asian markets by transnational corporations (TNCs) contributed to the surge.

China was again the largest recipient of FDI inflows, not only among all countries in the region but among developing countries worldwide. FDI in China attained another record of US$60.6 billion.

Flows to Hong Kong, China, amounted to US$ 34 billion, a 150 per cent increase and the highest investment growth rate among the region's economies. Together, China and Hong Kong accounted for two thirds of all FDI in this part of the world.

Among the various sub-regions of Asia, East Asia remained the preferred target last year, with a 46 per cent gain in FDI inflows; in terms of FDI growth, West Asia performed the best.

Foreign investment there was up by 51 per cent, to US$9.8 billion.

This was due to high oil prices, efforts to diversify, and a series of liberalisation measures aimed at improving the investment climate, the UNCTAD report states.

South-East Asia saw a further rise in inflows - from US$17 billion in 2003 to US$26 billion in 2004 - the steepest increase since the 1997-1998 financial crisis.

In fact, the climb in investment there shows that the impact of the crisis on FDI inflows is now a thing of the past, the report suggests.

Good governance is among the array of prerequisites for attracting foreign investors to invest in a country. Attracting FDI is one of Brunei's economic diversification plans and the opportunities for FDI will be in the mega-petrochemical projects in Sungai Liang and Pulau Muara Besar Industrial Park, officials said recently during the Asean-EC Economic Forum: Foreign Direct Investment (FDI) seminar - Strategy Revisited held at Sukma Indera Hall, Asean-EC Management Centre (AEMC), Gadong.

An official said the key issues for FDI are to have the good business environment, the drivers to drive the investment, and economic progress.

In one of the major projects by BEDB - the Pulau Muara Besar Industrial Park, the key drivers would be its central location in Asia and the availability of deep water in Brunei which is suitable for the next generation super-container vessels. -- Courtesy of Borneo Bulletin

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