Brunei – Economy Overview

• Capital: Bandar Seri Begawan
• Area: 5,765 km²
• Population: 381,371
• GDP (PPP): US$10.199 billion
• GDP (Nominal): -----
• Currency: Brunei Dollar
• Time Zone: GMT+8.1

Brunei has a small wealthy economy that's founded on a mix of foreign and domestic entrepreneurship, welfare measures and government regulation, and old tradition. The economy relies almost entirely on the export of natural gas and crude oil, with revenues from the petroleum sector bringing in over half of the country's GDP. Brunei is still considered a third world county, although its per capita GDP of by far higher than most other third world countries. Medical services for the general population are provided for by the government, along with providing subsidies for food and housing. The main concern of the Brunei government has been to diversify the economy away from its twin pillars of oil and gas, an area in which it has shown considerable progress over the last decade.

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Brunei is still the third-largest oil exporter in Southeast Asia, with a daily average of approximately 180,000 barrels a day, and the fourth-largest producer of liquefied natural gas in the world. The increase in petroleum prices in the 1970s caused Brunei's GDP to soar to a peak of $5.7 billion in 1980. After this peak it proceeded to gradually decline over the next 5 years. In 1986 it experienced a sharp drop by almost 30%, due to lowered petroleum prices worldwide. It has recovered somewhat since then, growing steadily through the late 1980s. The Asian financial crisis of the late 1990s, had created instability in Brunei's economy. In recent years, Brunei's GDP growth rate has experienced steady recovery, and since 2005 has surpassed its 1980 peak to reach over $6 billion.

Industry

Despite efforts to diversify the economy, the bulk of Brunei's industry is still concentrated in the export and refinement of petroleum and natural gas. Other industries worth mentioning are construction, agriculture, forestry, fishing, and banking, which have been flourishing in recent years due to the government's policy to promote industry diversification.

Investment

The Brunei Government actively encourages foreign investment by giving start up enterprises pioneer status, providing that they meet certain criteria. This status exempts company profits from income tax for up to 5 years, depending on the amount of invested capital. There are no particular restrictions on foreign equity ownership, but the government encourages local participation, both by shared capital and management. Foreign companies in Brunei must either be incorporated locally or registered as a branch of a foreign company, as well as being registered with the Brunei Registrar of Companies. In addition, at least half of the company's directors must be Brunei residents.

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