Brunei, through its Vision 2035, has set out the directions for its economic goals with an emphasis on attracting foreign direct investments (FDIs) as an important driver of growth, focusing mainly on economic activities that bring new industries, knowledge, technologies, and markets, as well as new business and employment opportunities for its people.
With an open economy policy favourable to foreign trades and FDIs, the government continues its economic diversification efforts to limit its long reliance on oil and gas exports. The last few years have seen the country accelerating its pace on bringing in more FDIs into the country.
FDIs are important to Brunei as they play a key role in the country’s economic and technological development. The country encourages FDIs in the domestic economy through various investment incentives offered by the Energy and Industry Department at the Prime Minister’s Office (EIDPMO), and through activities conducted by the Ministry of Foreign and Trade, and the Brunei Economic Development Board (BEDB).
In its bid to attract more FDIs into the country, Brunei has made some crucial amendments and streamlined its laws to make it easier and quicker for entrepreneurs and investors to establish businesses.
The Business License Act (Amendment) of 2016 exempts several business activities (eateries, boarding and lodging houses or other places of public
resort; street vendors and stalls; motor vehicle dealers; petrol stations including places for storing petrol and inflammable materials; timber stores and furniture factories; and retail shops and workshops) from needing to obtain a business licence.
The Miscellaneous License Act (Amendment) of 2015 reduces the wait times for new business registrants to start operations, with low-risk businesses like eateries and shops able to start operations immediately.
As part of Brunei’s efforts to attract more foreign investments, several facilitating agents were established including the BEDB, FDI Action and Support Centre (FAST), and Darussalam Enterprise (DARe).
These organisations work together to attract more FDIs and they smoothen the process of obtaining permits, approvals and licences. Facilitating services are now consolidated into one government website.
As of May 2017, 11 FDI projects are in progress while another 11 are in the implementation phase before commencing their operations in Brunei. In
addition, another 20 FDI projects are in the initial stage.
Pehin Datu Singamanteri Colonel (Rtd) Dato Seri Setia Dr Awang Haji Mohammad Yasmin bin Haji Umar, former Minister of Energy and Industry at the
Prime Minister’s Office, underlined Brunei’s commitment in attracting more FDIs coming into the country and in generating employment opportunities by reducing lengthy bureaucratic processes.
“With the reformation to improve ease of business led by His Royal Highness Prince Haji Al-Muhtadee Billah ibni His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah, the Crown Prince and Senior Minister at the Prime Minister’s Office, there have been numerous improvements in reduction of bureaucracies and red tape,” the former Minister said.
Brunei ranked 56th out of 190 countries, in the World Bank’s Doing Business 2018 report, moving up 16 places from the previous year. It marks the second consecutive year Brunei was named the ‘most improved economy in the world’.
Meanwhile, the latest Global Competitiveness Report 2017-2018 released by the World Economic Forum (WEF) also sees Brunei jumping a significant 12 places from last year, ranking 46 out of 137 economies worldwide, while also highlighting Brunei as the most improved country in the Asean region.
Brunei is now in the top five most competitive economies in the Asean region behind Singapore (three), Malaysia (23), Thailand (32) and Indonesia (36); followed by Vietnam (55), the Philippines (56), Cambodia (94) and Laos (98).
These achievements were possible through the introduction of new processes, regulations and system changes to improve the ease of doing business, particularly geared towards supporting Brunei’s growing number of FDIs.
The company employs practices of good corporate governance and fact-based analysis to support sustainable operational excellence, with a view to increase portfolio performance and value for money, and at the same time, promote measurable performance improvement.
Darussalam Assets was part of the first corporatisation initiative in Brunei which resulted in the takeover of Muara Container Terminal (MCT). Muara Port Company Sdn Bhd (MPC), a joint venture company between the Brunei Government, through Darussalam Assets, and Beibu Gulf Holding Co. Ltd, a state-owned corporation from China and a subsidiary under the Guangxi Beibu Gulf Port Group, assumed operations on February 21, 2017.
Since its incorporation, MPC has executed its plans to improve the operations of the MCT by making current processes more efficient, upgrading existing equipment as well as acquiring new equipment.
In the long run, Darussalam Assets aims to continue its collaboration with Guangxi Beibu Gulf as it strives to transform Muara Port into a regional shipping centre and a transit hub in the region. The successful execution of these plans will not only strengthen the economic and trade exchanges, and promote investment cooperation and economic interaction between Brunei and regional countries, but it will also contribute to the nation’s sustainable development and diversification of economic growth in sectors outside of the oil and gas industries.
On November 23, 2016, the founders of PDS Abattoir signed an agreement to partner with Darussalam Assets. The establishment of the feedlot is currently in progress with commencement of operations targeted to begin in mid-2018.
Through the partnership, Darussalam Assets acquires a 40 per cent stake in PDS Abattoir and with the transaction, PDS Abattoir will commission the design and construction of a cattle feedlot and Napier Grass Plantation at the 45-hectares land in Batang Mitus, Brunei.
Darussalam Assets aims to work closely with PDS Abattoir to improve its competitiveness with increased potential to develop further downstream opportunities targeting the export markets.
Darussalam Assets’ collaborative efforts with the relevant government authorities puts them in a position where they can positively influence industry cluster structures and strategies. With a view to accelerate further innovation, transparency and competition, Darussalam Assets aims to implement development projects in joint venture with qualified foreign partners, leading to further commercialisation and corporatisation of services.
The view to improve the performance of these sectors will lead to improved services available to Brunei, and in turn create a more conducive environment for foreign direct investments and gainful employment for Bruneian citizens.
Copyright 2017 Borneo Bulletin Yearbook 2017 All rights reserved.