Government to spend $6.1 billion for 2013/2014

Bandar Seri Begawan - The Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam will be spending an estimated $6.1 billion for the year 2013/2014, which is a $200 million increase compared to the Financial Year 2012/2013.

During that period, the government projected $5,791,931,000 revenue while the local economic growth was expected to be around 2.3 per cent in 2013, led by a robust three per cent growth by the non-oil and gas sector.

This was revealed during a deliberation of the proposal for the 2013/2014 'Supply Bill' by Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awg Hj Abd Rahman bin Hj Ibrahim, the Minister of Finance II at the Prime Minister's Office at the opening discussion of the 9th Legislative Council yesterday.

Yang Berhormat Pehin Dato Seri Setia Hj Abd Rahman outlined the latest development of the national and global economy including future challenges faced and the impact towards the nation's socio-economy.

In 2011, he highlighted, the Brunei economy continued to achieve a 2.2 per cent growth rate, with the non-oil and gas sector achieving a robust growth rate of 3.5 per cent compared to three per cent the previous year. The growth rate in the oil and gas sector was 0.7 per cent compared to the prior 2.2 per cent.

The Gross Domestic Product (GDP) in 2011 at current prices (nominal GDP) improved by 22 per cent to $20.6 billion. The Minister of Finance II revealed this improvement was contributed by the non-oil and gas sector, which recorded a positive growth of 4.3 per cent (6.7 billion) compared to 3.8 per cent the previous year. The biggest contributor was the service sector with a contribution of $5.6 billion or 27.7 per cent of the GDP followed by industrial activities that contributed $826.1 million or 4.0 per cent of the GDP.

In the agricultural, forestry and fishery sector, although its contribution to the GDP is relatively small at 0.6 per cent in 2011, it has nonetheless recorded a positive 2.9 per cent growth compared to a negative growth of 9.7 per cent in 2010.

Meanwhile, the oil and gas sector contributed $13.9 billion or 67.7 per cent of the GDP in 2011. The country then continued to receive a Foreign Direct Investment (FDI) of$1.5 billion, an increase of 78.2 per cent compared to 57.9 per cent in 2010. However, only 8.6 per cent of the amount or $129.9 million were in the non-oil and gas sector.

The nation's trade also recorded positive development, which saw an increase of 25.1 per cent to $19.3 billion. The nation's exports recorded stronger growth of 29.1 per cent to $15.6 billion, compared to a growth of 16.1 per cent in the previous year, with a majority of the export growth contributed by petroleum and crude oil. The nation's methanol export, which began in May 2010, also increased at 80.4 per cent to $231.8 million in 2011.

Yang Berhormat Pehin Dato Seri Setia Hj Abd Rahman said although efforts to diversify the economy are still in the works, the contribution of the non-oil and gas exports remain at a minimal but a marked improvement was also recorded. The food, drink and live animal exports continue to grow at a rate of 31 per cent in 2011. The export of construction materials, machinery and transportation equipment also recorded a continued growth of 26 per cent to $339.8 million while the minimal export value of the non-oil and gas sector highlighted the need for more initiatives to be implemented to achieve the Brunei Vision 2035.

National Imports also recorded an increase of 10.4 per cent at $3.7 billion. The imports comprised industrial materials such as machineries, cement and construction materials, machineries and agricultural equipment as well as metal production materials. This trend showed a continued increase in domestic demands following rapid domestic activities, encouraged by the development in the private non-oil and gas sector, which continued to record strong development.

The Minister of Finance II at the Prime Minister's Office said the nation's economic growth in 2012 was expected to grow at 0.7 per cent.

For 2013, the global economy is projected to grow at 3.6 per cent compared to the initial estimation of 3.9 per cent issued by IMF in 2012 marking a weak global economy performance shadowed by uncertainties. The global trade is also estimated to grow at just around 4.5 per cent compared to the initial estimation of 51 per cent whereas the debt crisis in the Euro zone and developed countries debts are still unable to show signs of ending.

Yang Berhormat Pehin Dato Seri Setia Hj Abd Rahman highlighted that the government policy of 'Fiscal Sustainability' demanded the government to plan its spending according to priority and the nation's ability. He proudly revealed that the nation's economy is resilient amidst the uncertainty in the global economic situation citing a need for a more dynamic economy that can endure a sustainable growth

To achieve this, the minister reiterated that a stronger 'Human Capital' is required. Brunei will continue to prioritise development amongst its youths as the future leaders to sustain and lead the implementation of programmes that strengthen the socio-economy of the country.

He remarked that the focus and priority in the government financial planning year 2013/2014 is directed to efforts in intensifying capacity especially the youths, provide and promote trainings through improvement of facilities and educations for schools and higher educational institutions including vocational and technical schools; strengthening the private sector to spur resilient and inclusive economic growth; improvement of public welfare towards the eradication of poverty.

The Minister of Finance II at the Prime Minister's Office said in order to develop a holistic human capital, an allocation of the 2013/2014 budget are given to the provision of schemes under the Human Resources Development, which include the Private Sector Human Resources Capacity Development Scheme. This will provide locals employed in the private sector with access to education assistances to help them improve their skills and marketability. The minister highlighted that since this incentive was introduced last year, it has been receiving a good response and 364 scholarships have been granted. These comprise 128 students that are still studying HND, 172 doing their first degree, 27 undertaking their masters, 37 studying under the Sub-Skim Professional, in local and overseas institutions. Of the figure, 364 students received scholarships under this scheme while 89.6 per cent are working under the non-oil and gas sector and 10.4 per cent under the oil and gas sector.

Second is the provision of a Special Scholarship Scheme with a total allocation of $23.3 million from the 2013/2014 budget. Since its introduction, the government has spent more than $116 million for 559 scholarship recipients. This scholarship includes 123 students for A-Levels, 365 students for first degree, 64 for Masters and seven for PHD level. These students are studying abroad.

Other schemes are under the HRD include Technical and Vocational Education Scheme, which allows students who have completed their 'O' and 'A' Levels, to pursue their studies at local private institutions. A total of 3,286 students are currently pursuing their studies until HND. The Training and Work Placement (SLP) scheme, aims to provide financial incentives to local students who have been trained in private companies to continue working in the private sector. Currently, a total of 348 individuals have undertaken courses for work-skill training; 950 are on-the-job training and a total of 331 people have received permanent positions.

This year, a total allocation of $10 million has been allocated to help parents working in the private sector and members of the Employee Provident Fund (TAP) to fund their children's education in the local tertiary education institutions.