Since the commercial find of crude oil in Seria in 1929, oil and gas is the primary resource fuelling Brunei Darussalam's economy, accounting for more than half of the nation's GDP.
Today the nation is on the move. While making efforts to sustain and strengthen the oil and gas industry, through the development of new upstream and downstream activities, the Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam is also pushing hard for economic diversification, A move that will ensure a more sustainable economy spurred on by high technology, knowledge-based and capital-intensive industries.
Attractive incentives are available for both local and foreign investors. Application procedures for incentives has been simplified and further tax incentives for investors, including a longer corporate tax relief period for pioneer industries has been expanded to cover export-oriented manufacturing and services, research and development, transhipment, venture capital activities, overseas investment companies and new technology companies. Furthermore better co-ordination and facilitation of industrial activities, especially on licensing and industrial building approvals has been undertaken.
Manufacturing, primary resources and tourism have been identified as a pillar of diversification. The development of the Brunei Halal brand, the shift to agribusiness, and export oriented manufacturing, food processing and services are just examples of new initiatives of the government, which should prove attractive for investors and entrepreneurs alike. New high technology investments such as biotechnology based on natural tropical forest biodiversity and high technology manufacturing, information and communication technology (ICT) and high technology farming and fisheries is also actively promoted.
Small and medium enterprises (SMEs) have been identified as a major player in industrial development that has a high potential in contributing to the diversification of the economy. To enhance the development of local SMEs into competitive and viable businesses both domestically and internationally, the government of His Majesty provides various forms of assistance such as in financing entrepreneurial development, investment incentives, technology transfer, infrastructure and various other facilities.
At the helm of this economic diversification drive is the Ministry of Industry and Primary Resources (MIPR). Formed in 1989, MIPR took on the responsibility of promoting and facilitating industrial development in Brunei Darussalam by offering investors an environment that is conducive for investment in terms of security, stability, continuity, confidence and competitiveness. MIPR has achieved a considerable measure of success in transforming Brunei Darussalam's economic landscape. A commendable development in the main areas of growth namely manufacturing, tourism, agriculture, fisheries and forestry has been achieved with a steady flow of investments from within Brunei Darussalam, ASEAN and other countries.
Infrastructure and facilities development for industries and primary resources activities is a priority for the Ministry in its effort to facilitate industrial and primary resources development. Fully developed industrial and primary resources sites are available in strategic locations all over the country, to locate manufacturing activities, agricultural and fisheries-based food processing, farming, aquaculture fisheries, services industries and other promoted activities. A total of more than 51,000 employment opportunities have been created by the manufacturing, primary resources and tourism sectors.
Development in the primary resources sector continues to show encouraging progress in terms of production, yield and earnings. The change towards commercial and business orientation resulted in more intensive production spurred by the introduction of new technologies and quality breeds of livestock and fisheries, and varieties of crops. High-technology farming has resulted in reduction of cost of production, increased yields, optimised land use, improved product quality and ultimately profitability, competitiveness and sustainability of the primary resources sector.
The Ministry's campaign to place Brunei Darussalam on the tourism map of the world had attracted a steady flow of inbound tourists from selected target markets in Europe, Australia, Middle East, Japan and China. The country is famous for its serene and clean environment, a caring and visionary Monarch and culture steeped in heritage and history.
The establishment of a competitive and sustainable economy based on industrial and primary resources development in line with the prevalent dynamic, free market global economy, demands a firm hand of the economic levers.
Regional, bilateral and multilateral cooperation will open up more trade and investment opportunities for Brunei Darussalam. The prospects for development of industry and trade provide a positive indication of its continuous contribution to GDP, creation of employment opportunities and opening up new business and investment opportunities.
In order to be able to reap these opportunities, the key challenges faced is the need to enhance the competitiveness of Brunei Darussalam to attract investors. Provisions of more attractive incentives packages compared to incentives of other countries as well as a fully developed and comprehensive infrastructure, regulations and laws that are transparent and able to protect enterprises and investment, and processing procedures that are fast and effective are key strategies to be addressed.
In line with these strategies is also the need to develop the capability and competitiveness of local entrepreneurs and businessmen in terms of entrepreneurship, penetration of the export market, productivity, innovation and technology transfer.
Stability and confidence is the key. Supported by measures that are investor friendly and the commitment of His Majesty's Government to pursue economic diversification, the emerging Brunei Darussalam is predominantly outward looking and attractive to foreign direct investment. Brunei Darussalam's SMEs through manufacturing and primary resources activities with value adding, high technology and export orientation, and the tourism sector will be the engine of growth of economic diversification that will steer the nation through the global economic challenges of the 21st century.