Economic & Commercial Report of Brunei Darussalam - October 2014
1. Economic Indicators
Population
422,000 [July 2014 estimate]
GDP at constant prices
US$ 9.5 billion [March 2014]
GDP (PPP)
US$22.25 billion [2013]
GDP Per capita income at current prices
US$ 39,055 [March 2014]
GDP Growth
1.8% [2013]; 0.9% [2012]; 3.4% [2011]
Inflation
1% [2013]
Foreign Trade:
Export of Goods [fob]
US$11.26 billion [2013]
Imports of Goods
US$3.5 billion [2013]
Balance of trade
US$7.7 billion [2013]
Main items of export
Crude Oil, Natural Gas & Garments
Main items of import
Iron and Steel, Motor Vehicles, Machinery and Transport equipment, Manufactured Goods, Foods, and Chemicals
Main destination of export
Japan 45.7%, South Korea 15.1%, Australia 9.1%, NZ 6.6%, India 5.8%, Vietnam 4.7% [2012]
Main origin of imports
Singapore 26.3%, China 21.3%, UK 21.3%, Malaysia 11.8% [2012]
2. India-Brunei Trade
Our trade figures with Brunei Darussalam are given below (Source DGCIS):
(Value: Million Brunei $) (B$1 = ₹ 48.54)
2007
2008
2009
2010
2011
2012
2013
Indian Exports
21.90 (+54.77%)
29.39 (+34.20%)
39.21 (+33.41%)
31.13 (-20.60%)
36.53 (+17.34%)
42.59 (+16.58%)
47.20 (+10.82%)
Indian Imports
273.66 (-54.16%)
478.15 (+74.72%)
892.55 (86.66%)
674.80 (-24.39%)
1265.91 (+87.59%)
1444.55 (+14.11%)
919.78 (-36.33%)
Total trade
295.56(-54.16%)
507.54(+71.72%)
931.76(+83.58%)
705.93(-24.23%)
1302.44(+84.49%)
1487.14(+14.18%)
966.98(-34.98%)
Note: The figures in parenthesis represent the percentage change compared to the previous year.
According to DGCIS Kolkata data, the bilateral trade between India and Brunei during the calendar year 2013 was B$966.98 million. The exports from India amounted to B$42.59 million and imports from Brunei were B$919.78 million. Figures from the last few years indicate that the overall trade between India and Brunei has been increasing steadily over the last few years. Our imports are showing phenomenal increase primarily because of our dependence on Brunei for LNG and petroleum products. This trend is likely to continue as our energy requirement keeps increasing every year. Our exports to Brunei are also showing an increasing trend though at a steady pace.
The reasons for lower level of bilateral trade have been relatively high shipping costs, and Brunei’s small population base of approximately 415,000. The main import of India from Brunei is crude oil and petroleum products, followed by organic chemicals, metal ores and scrap. Due to low demand, most of the consumer goods from India are received in Brunei through re-exports via Malaysia and Singapore. Our main exports to Brunei consist of transport equipment, followed by meat and meat products and gems & jewellery.
3. Economic And Investment Related News
(i) Brunei GDP up 0.8pc in Q2: It was reported on October 06, 2014 that in the second quarter of 2014 (Q2 2014), GDP for Brunei at current prices was estimated at B$4,944.0 million compared to B$4,914.7 million in Q1 2014. In terms of GDP growth at constant prices, Q2 2014 recorded a growth of 0.8% year-on-year mainly attributed to the increase of the non-oil and gas sector by 2.5% (y-o-y).
(ii) JPKE releases July trade statistics: Government reported on October 06, 2014 that for July 2014, total trade amounted to B$1,718.8 million, comprising exports (B$1,241.6 million) and imports (B$477.2 million). The trade balance on a month-to-month increased by 20.9% to B$764.4 million. At the same time, the total trade also increased by 7.2%. Exports for July 2014 increased by 11.1% to B$1,241.6 million due to an increase in the main export of crude oil and LNG respectively by 19.8% and 7.5%. The highest share of 34.3% of the total exports went to Japan, followed by Australia (16.5%) and India (12.2%). The highest share of imports came from Singapore with 30.1% followed by Malaysia (18.7%) and China (10.3%).
(iii) Department of Labour issues workplace safety instructions: The Department of Labour issued a warning to companies on 4 October 2014 that it would take serious action against companies or organization including employers and employees who do not adhere to the legal requirements of the Workplace Safety and Health Order. The general penalties specified in the in the Workplace Safety and Health Order 2009 and Workplace Safety and Health (Amendment) Order 2013, could reach up to B$200,000 and imprisonment for a term not exceeding two years or both for any individual.
(iv) Hengyi Industries’ oil exploration activities: Hengy Industries Pvt Ltd. will carry out dredging activities around the western and southern channels of Pulau Muara Besar (PMB) for six months upto 30 May 2015. In January this year Hengyi was awarded a land lease contract for an integrated oil refinery and aromatics cracker plant.
(v) Brunei to strengthen Intellectual Property protection: Brunei is planning to use Georgraphic Indications (GI), a form of intellectual property protection for products tied to specific location. GI is a specific IPR tool that protect some products that have specific links with the geographical area. In Brunei GIs are protected under the trademark act as a collective or certification mark.
(vi) Car Sales down 13.9% in August: According to a report by Brunei Automobile Traders Association (BATA) Brunei’s passenger vehicle sales for August declined by 13.9% compared to July’s figures. That report showed that August vehicle sales dropped to 1,442 units or 206 units less than the 1,648 cars sold in July.
(vii) Local Islamic finance market share to grow by 50% in six years: The local Islamic banking and finance industry is expected to make up half of the total financial sector in six years time, according to Deputy Chairman of Autoriti Monetary Brunei Darussalam (AMBD), the central bank of Brunei. The market share for Islamic finance in Brunei will grow to at least 50 per cent of the local financial sector by 2020, according to Minister of Development.
(viii) Unemployment figures for July 2014 show an increase: According to statistics released by the Department of Economic Planning and Development, the number of unemployed Brunei citizens and permanent residents, aged 18 to 59 years stood at 12,173 in July as compared to 11,469 in June 2014.
(ix) Land transport issues to be tackled under Masterplan: The National Masterplan for a Sustainable Land Transportation System, which seeks to address the current and future needs of the land transport system in Brunei was unveiled on 20 October 2014. It was disclosed by the Minister of Communications that there were 216,000 licensed vehicles in Brunei and 1400 private vehicles are registered every month with a nine per cent annual growth rate. The total length of roads in the country is 3,167 km. In terms of public transport, there are 105 public buses, 456 school buses and 45 taxis.
(x) TelBru to introduce Fair Usage Policy: Telekom Brunei (TelBru) has announced that it will join a number of countries around the world in adopting a Fair Usage Policy for its broadband service. The policy, aligned with the industry practice of telecommunication providers in other parts of the world, is aimed at ensuring that all customers get a better quality of service and a more consistent internet experience by reducing the excessive amount of bandwidth consumed by a minority of heavy users.
(xi) Brunei, Korea LNG trade to slow down: The B$2 billion trade volue between Korea and Brunei could see a drastic decline when Brunei’s contract to supply liquefied natural gas (LNG) to Korea ends in 2018. According to the Korean Ambassador, when the contract was under review last year, the Korean Government chose to renew it for a shortened five-year term, instead of the usual 10 years, due to Brunei’s high LNG prices. Ninety per cent of bilateral trade volume between Brunei and Korea comprises oil and gas, with Korea ranked the second largest importer of LNG from Brunei after Japan. (xii) Banks free to price residential property loan products: According to new instructions from Autoriti Monetary Brunei Darussalam (AMBD), Brunei’s central bank, Bank loans and financing on home properties no longer have a regulatory cap for their interest or profit rates. The AMBD has revoked regulations on profit rates on residential property financing for Islamic banks as well as interest rates on residential property loans for banks. All banks are also free to price their residential property loan products “within a reasonable range.”
(xiii) September inflation declines: According to statistics released by Department of Economic Planning and Development (DEPD), Prices of goods and services in September has declined by 0.1 per cent compared to August owing to lower prices of recreational goods, medical products, clothing and footwear. The report recorded a 0.6 per cent drop in the Consumer Price Index for goods in the recreation and culture segment, 2.6 per cent drop in health and 0.6 drop in the clothing and footwear segment.
(xiv) Brunei ranked 101 in World Bank’s ‘Ease of Doing Business’ ranking: Brunei is now placed at 101 in the latest World Bank’s Ease of Doing Business Report 2015, which lists a total of 189 economies. Last year Brunei was ranked 59th in the World Bank Report. Brunei ranked lower in terms of registering property, getting credit and resolving bankruptcy. The Report said entrepreneurs will need 101 days and go through 15 procedures to set up a new business in the Sultanate. Businessmen also need 298 days and go through seven procedures to register a property in Brunei. On the plus side, the Report said that Brunei has made dealing with construction permits easier by consolidating final inspections.
(xv) Petrochemical firm Hengyi refinery delays start of operations: Petrochemical firm Hengyi Industries has delayed the start of operations of its refinery project in Pulau Muara Besar for at least one year from its target date due to requirement of additional installations. The Company plans to install a coking plant and construct a single buoy mooring. The integrated oil refinery and aromatics cracker plant, estimated to be valued at over US$20 billion when completed, was expected to begin operations in early 2017.
Source: Commercial Section, Embassy of India, Bandar Seri Begawan
