The economy of Brunei

TAN SIEW EE and ROSNAH OPAI, eds.

The economy of Brunei Darussalam: perspectives and insights

Singapore: Institute of Southeast Asian Studies; Petaling Jaya: HBJ Education, 2008; x, 386 pp. ISBN 978-983-3026-04-3 pb S$49.90/ US$39.90

Reviewed by Victor T. King, University of Leeds

This is the third in a series of edited volumes on the economy of Brunei co-edited by Tan Siew Ee and written by ‘mainly young local’ researchers in Brunei based primarily at Universiti Brunei Darussalam (UBD). General social science books on Brunei produced by local academics are few and far between. The preface indicates that the volume is a basic student reference text for the ‘Economy of Brunei’ course at UBD but it also serves as a handy compendium for those interested in the economic affairs of Brunei. The volume is heavily concerned with quite practical economic matters, including policy issues in relation to economic development and the management of Brunei’s economy in relation to the analysis of basic statistical and other relevant data (on imports and exports, income, consumption, economic growth, human resources, training and infrastructure, demography, government budgeting and expenditure, and taxation). In this sense it is a quite straightforward piece of work, even for those of us without an economics background, though I am leaving aside the complexities of econometric analysis; it does not set the pulse racing.

The 14 chapters, several of them co-written by the editors, range over such broad issues as socio-economic development in relation to Brunei’s five-year planning cycle and the associated administrative structure (Tan and Rosnah); economic diversification policies (Rosnah); diversification and specialisation in trade (Pang Wei Loon); household consumption and expenditure patterns according to ethnicity (Haji Zulazrin Haji Mohidin and Rosnah); personal consumption and savings (Jessica Lai Teck Choo); private sector demand for cars (Suziyati Mohammad Ali and Tan); the socio-economic factors influencing cigarette consumption (Haji Roslee Haji Baha); determinants of inbound tourism from various ASEAN countries (Rosnah and Tan); travel agencies and inbound tourism and the constraints on tourism development (Chin Yick Moi and Tan); Brunei-Japan trade linkages and the gradual shift from Japan towards closer integration with other ASEAN countries (Pang and Tan); export-led growth and its relevance to Brunei (Haji Suhaimi Haji Ali); money demand and money supply (two papers by Tan Eu Chye, a Visiting Professor to UBD from Universiti Malaya); and finally Brunei’s tax performance (Shahriman Haji Besar and Tan).

One of the main preoccupations of the book, not unexpectedly, is Brunei’s dependence on oil and gas and the ways in which government policy and action can assist in economic diversification processes. The government’s attempts at developing other non-oil sectors of the economy including agriculture, forestry, fishing, manufacturing and services such as tourism have met with mixed success. It has been the services sector and specifically finance and tourism-related activities which have responded most positively, along with textile/garment production. The difficulties which Brunei experiences with regard to its limited labour supply, and especially the availability of skilled labour, its location and communications infrastructure, the relatively high cost of living, and competition from its neighbours are discussed frankly as are the tendencies of Bruneians to consume luxury goods and to incur personal debt through loans, as well as the disinclination to direct sufficient levels of income to savings and investments. As a result of the deliberations of the contributors to the volume a range of policy recommendations are proposed which seem to me to make sense in the Brunei context and include, among others, the monitoring of consumption practices, changes in various elements of the tax regime, the improvement of public transport and the communications infrastructure, the need to develop the skills and expertise of the work force, and the provision of more and better appointed facilities, particularly accommodation, for international tourists and other visitors.

Of course, as a resource-rich country with a small population Brunei is still in a very enviable economic position in comparison with most of its ASEAN neighbours, but wealth generates its own problems and the co-editors have provided some useful pointers for ‘policy-makers in Brunei who are grappling with the difficult task of transforming tiny and laid back Brunei into a modern and developed state’ (p.iv). My one major criticism of the book is that the several chapters, despite their focus upon ‘the economic’ are relatively loosely integrated. I felt the need for a more robust introduction which would serve to demonstrate the positive achievements of Brunei’s economic planning but also, and perhaps more importantly, its contradictions and inadequacies as revealed across the rather diverse chapters. Much of what is discussed in the book also ideally needs to be located in a political, social and cultural context. No economy works in a vacuum.