Bandar Seri Begawan: Against the backdrop of global turbulence and uncertainty, Brunei Darussalam could be considered as an oasis for foreign investors and businesses within a fast-growing Asean and Asia-Pacific region.
This observation was made by Dato Paduka Haji Ali bin Haji Apong, the Deputy Minister at the Prime Minister's Office and Chairman of the Brunei Economic Development Board (BEDB), as 'he pointed out some of the Sultanate's modest successes in attracting FDI including the US$4 billion integrated refinery and aromatics complex by Zhejiang Hengyi from China, the US$102 million Multi-Purpose Training Centre that is equipped with the latest state-of-the-art helicopter simulation facilities by CAE from Canada, as well as the US$18 million Halal nutraceuticals plant by Viva Pharmaceutical from Canada.
"Clearly, with a population of around 400,000 (in the country), these investors must surely see BrUnei Darussalam as a hub from which to export their goods and services not only within Asean but also to the Asia-Pacific region and globally," said Dato Paduka Haji Ali Apong, who was speaking during the Asean Business & Investment Summit at the International Convention Centre yesterday.
In ensuring future sustainability, the Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam has recently established the Brunei Research Council (BRC) whose main focus is to encourage both public and private research and development (R&D) in areas such as energy, environment, food security, healthcare and health services, as well as ICT, so as to ensure the nation's long-term competitiveness.
As such, His Majesty's Government has committed B$200 million to be utilised for R&D purposes over the next few years.
He said, "A portion of this will be used for a cost-sharing grant scheme where we will look to fund private sector R&D in collaboration with our institutes of higher learning and government agencies in projects with strong commercialisation potential.
"One example is where we have initiated a R&D collaboration with an Australian firm undertaking R&D in the development of healthcare supplements and nutraceuticals from locally derived natural plant extracts."
Furthermore, Brunei has also stepped up efforts to encourage entrepreneurship and innovation, whilst ensuring adequate IPR protection.
"Our iCentre or Innovation Centre has incubated a number of innovative ICT start-up companies that have won regional awards and some have even achieved international recognition. In addition, we have extended our reach to the Institutes of Higher Learning through an Entrepreneurship @Campus initiative to inculcate a spirit of entrepreneurship and innovation amongst our youths," the deputy minister said.
Speaking on Asean, Dato Paduka Haji Ali said despite foreign investors being cautious about recovery in the world economy, Asean has continued to forge ahead with its commitment to create an Asean Economic Community (AEC) by 2015, which aims to create a single market and production base, a highly competitive region, a region of equitable development and a regional economy fully integrated with the global economy.
One such initiative that will play a significant role leading up to the Asean Economic Community is the Asean Comprehensive Investment Agreement (ACIA). ACIA is a comprehensive set of agreements that encompasses all four major aspects of investments, namely liberalisation, facilitation, protection and promotion. It will be a key enabler that will pave the way towards this single, integrated market community by removing impediments towards investments into and within Asean.
He said, there is no doubt that a more open and transparent investment regime would enhance Asean's attractiveness as an FDI destination.
Nonetheless he also urged to be mindful that Asean, as a collective grouping needs to improve its competitiveness so as to remain relevant to foreign investors in today's fast-changing global environment.
According to the World Economic Forum's Global Competitiveness Index (GCI), which covers 144 economies, Asean individual member states' ranking were highly disparate - from two to 85. Whilst Singapore, Malaysia and Brunei were ranked within the top 30, it shows that there is still much room for improvement and need for equitable development by Asean as a whole.
In the long term, it is not desirable nor is it sustainable for Asean to compete solely on cheap natural resources and cheap labour, where he said in the context of Brunei Darussalam, for example, the Sultanate has recognised that the oil and gas resources are finite and have already taken active steps towards economic diversification by focusing on higher value adding oil and gas downstream activities, as well as in the non-oil and gas export-oriented manufacturing (such as food, pharmaceuticals and cosmetics) and service sectors (such as Infocomms Technology (ICT) and financial services).
In the area of manpower, Dato Paduka Haji Ali said, Brunei, like its Asean counterparts, has continued to invest heavily in education and is revamping its vocational and technical training to ensure that the country produces quality skilled labour that will allow the country to undertake higher value added activities and to transform itself into a knowledge-based economy.
Dato Paduka Haji Ali emphasised that besides education and training, there are clearly two indicators measured in the GCI - technological readiness and innovation - that stand out as key areas that Asean as a region is falling short compared to other regions in the world.
He said, "In spite of the differing maturity of Asean member states' economies, there is a need for Asean member states to encourage, invest in, support, and adopt new and innovative technologies so as to constantly sharpen our competitive advantage.
"To do so, we need a conducive environment infused with an entrepreneurial culture and supported by robust Intellectual Property Rights (IPR) protection regime.
"In this ever evolving technological era that we live in today, we have no choice but to continuously strive to find new and innovative solutions to address problems and issues that we face."
Whilst technology acts as the primary engine for economic growth, innovation, Dato Paduka Haji Ali said it is the fuel that will allow an economy to progress to its next phase.
According to him, without innovation, an economy may face the danger of being stagnated.
"Although a competitive advantage can be achieved and substantial gains can be made through factors such as improved infrastructure, institutions and human capital, it is very likely that these returns will fall short in the long term," he said. "It is therefore important that provisions be made for innovation to flourish so that sustainable economic growth can be achieved."
Dato Paduka Haji Ali, meanwhile, reiterated that the future prospects for Asean remains optimistic as Asean strives towards a single integrated economic community.
"I am confident that with our collective efforts, Asean will be able to enhance our global competitiveness and remain relevant in a fast-changing global environment so as to continue to be an attractive FDI destination," he said.
Today, Asean has a combined population of 620 million, with a combined GDP of US$2.2 trillion. Inward FDI has grown about five times from a mere US$22 billion in 2001 to US$118 billion in 2012, whilst Intra-Asean FDI has grown by more than 10 times from US$2.5 billion to US$26 billion during the same period.
Meanwhile, total trade volume in Asean today stands at US$2.4 trillion per year, representing approximately 24 per cent of global trade.
On the whole, Asean GDP in 2012 grew by a respectable 4.8 per cent compared to global GDP growth of 3.2 per cent buoyed by domestic investment, as well as Intra-Asean trade and investments.