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In March Brunei Darussalam outlined plans to change its tariff structures, improve
foreign direct investment rules and enact a National Competition Law ahead of the
year-end launch of the AEC. According to regional press reports from early January,
the Sultanate has achieved nearly all the tariff cuts envisaged in the AECs
Blueprint 2015 master plan.
The year also saw reforms aimed at easing the process of doing business in Brunei
Darussalam, led by improvements to the licensing process for start-ups.
A single business licence has been introduced, replacing the variety of licences
issued by multiple authorities that were previously required. Additionally, a new
authority was established to oversee licensing procedures, and an online portal to
the Registrar of Companies and Business Names was created, allowing users to pay
fees remotely.
According to media reports, the countrys streamlining efforts have reduced the wait
time for licensing from three months to just a few days.
Market makers
In addition, the Sultanates financial sector is expected to undergo significant
development in the next two years.
In May the AMBD announced plans to launch a securities exchange as early as
2017, following the introduction of new capital market rules in February. The new
securities exchange will enable Brunei Darussalam to ramp up its role in the
increasingly integrated ASEAN capital markets, allowing businesses to access
funding via listings and other available instruments.
In another landmark move, the AMBD said in mid-June that it plans to issue longterm sukuk (Islamic bond) for the first time. Expected to take place in 2016, the
issue will broaden and deepen the countrys Islamic bond market, marking the end
of an era dominated by maturities of one year or less.
Such reforms should help Brunei Darussalam prepare for a year that looks set to
bring a mix of new opportunities and familiar challenges
BRUNEI ISSUES
Energy earnings down
News at the end of 2015 that oil prices had fallen to their lowest level since the
height of the global financial crisis in 2008 reaffirmed the extent of the challenge
facing Brunei Darussalam. The hydrocarbons sector traditionally accounts for
roughly 60% of GDP and more than 90% of government revenue.
Brent crude futures dipped close to $30 per barrel in mid-January, while liquefied
natural gas (LNG) prices were down 26.5% on the year, according to Platts
Japan/Korea Marker, with the average spot price of LNG cargoes arriving in northeast Asia dropping to $7.40 per million British thermal units in January.
BRUNEIs economy continued to decline year on year, this time by 2.3 per cent in
2014, owing to a slowdown in the oil and gas sector, the Department of Economic
Planning and Development Board (JPKE) reported yesterday.
This is a furher decline from the 1.8 per cent year-on-year contraction recorded in
2013.
The JPKE said the oil and gas sector, which accounted for more than half of the
Sultanates gross domestic product (GDP), fell by 3.7 per cent in 2014.
The non-oil and gas sector declined by 0.4 per cent.
By expenditure approach, the JPKE attributed GDPs decline to a 34.6 per cent
decrease in gross capital formation, imports of goods and services by 19.7 per cent
and domestic consumption by three per cent.
Bruneis exports rose by 4.3 per cent in 2014, while government spending increased
by 2.9 per cent.
In the fourth quarter of 2014 alone, Bruneis GDP grew by 0.2 per cent on year. The
2.7 per cent growth in the non-oil and gas sector offset the 1.6 per cent decline in
the oil and gas industry.
The gains in the agriculture and services sectors supported the non-oil and gas
sector in the fourth quarter.
Agriculture, forestry and fishery sectors rose by 3.1 per cent thanks to a 25.7 per
cent rise in the production of vegetables and fruits as well as an 8.6 per cent growth
in forestry production.
The services sector increased by 2.2 per cent on the back of higher growth posted
by finance, transport and education service sectors.
The industrial sector decreased by 1.1 per cent pressured by a poor performance in
oil and gas mining.
Bruneis GDP at current prices in the fourth quarter of 2014 was estimated at
$5.245 billion compared to the $5.209 billion in the previous quarter.
JPKE said the fourth quarter national income accounts is the first quarterly report to
be released that used 2010 as the base year in calculating the countrys gross
domestic product.
JPKE previously used 2000 as the base year in calculating GDP.
The Brunei Times
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%E2%80%99s-economy-slips-2-3#sthash.jktmCwW0.dpuf