Brunei Darussalam - Economy



Discovery of extensive petroleum and natural gas fields in the 1920s brought economic stability and modernization to Brunei. Today its economy, a combination of domestic and foreign entrepreneurship, government regulation, welfare programs, and village tradition, remains overwhelmingly dependent on the oil and gas sector. This sector accounts for almost 50% of GDP, almost 90% of exports, and 75 to 90% of government revenues, although, in 2002, for the first time, earnings from Brunei's overseas investments totaled more than its revenues from the petroleum exports. Brunei's per capita GDP is one of the highest in Asia, though sharply down from the peak reached in 1980. Brunei's oil production also peaked in 1980 at an estimated 270,000 barrels per day, but has been deliberately cut back since then to preserve the country's oil reserves, which are conservatively estimated to last another 20–25 years.

In early 2001, decrees designed to make investment in Brunei more attractive were promulgated, and in March 2001 an out-of-court settlement of the Amedeo Development Corporation scandal, done in the "Brunei way," was announced. The Sultan's younger brother, Prince Jefri, Finance Minister and head of the Brunei Investment Authority (BIA) had been accused of misappropriating as much as $28 billion of public funds through the Amedeo corporation, which declared bankruptcy at the height of the Asian financial crisis. In all, 71 people were accused, including Prince Jefri's son, Prince Hakeem, suspected of receiving $1.08 billion. By 2002, the Global Everygreen Corporation, revealed to be fully government-owned, had settled all of Amedeo's outstanding debts, taken over several of its projects with the intention of completing a number of them, a significant factor in a revival of the construction sector, Brunei's second-largest industrial sector. The government is increasing efforts to promote Brunei as a destination for upscale tourism and ecotourism. Meanwhile, attempts to diversify the economy pursuant to the national development plan have moved slowly. Manufacturing is estimated to have contributed a little over 3% to the GDP in 2001. Real GDP growth improved sharply in 2000, to 3.5%, because of higher oil prices. With the global economic slowdown and lower oil prices in 2001, the GDP growth rate is estimated to have fallen to 3%.

User Contributions:

Comment about this article, ask questions, or add new information about this topic:

CAPTCHA