Brunei Darussalam: A Mixed Bag of Political and Economic Developments

2005

AVM Horton

Following on from themes developed in previous analyses in this series, the situation in Negara Brunei Darussalam over the last three months has presented a rather mixed bag of political and economic developments.

On the political front, Crown Prince Al-Muhtadee Billah has continued his rise to prominence. Following his appointment last year as a General in the Royal Brunei Armed Forces, on 5 May 2005 Crown Prince Al-Muhtadee Billah was installed as Deputy Inspector-General of the Royal Brunei Police Force. The Inspector-General is HM the Sultan himself, who has held the post since 14 August 1971; so the new development is clearly part of the crown prince's grooming to take over as Head of State in due course.

There continues to be no signs of any immediate move towards greater democratic participation. Some ten months after the revival of the Legislative Council was announced on 15 July 2004 (See Asian Analysis, Nov. 2004 for the background), the date for the promised elections for the fifteen elective positions has still not been set.

Meanwhile, in mid-March an internal feud was reported to have broken out in PAKAR (Parti Kesedaran Rakyat Brunei or People's Awareness Party), which has now split up into 'two warring factions'. The larger group, led by the party's president (Haji Maidin bin Haji Ahmad), held an emergency assembly on 15 March, whilst their rivals, loyal to the secretary-general (Dr Haji Jumat bin Haji Idris), held a gathering of their own two days later. Both cliques were intending to submit minutes of their meetings to the Registrar of Societies which they hoped would determine which bloc would have the right to lead the political party. No indication has been given of the substantive issues (if any) involved in the dispute (Borneo Bulletin online, 6, 16, 18 March 2005). Readers might be forgiven for supposing that the whole episode highlights a certain Gilbertian comicality of 'politics' in the sultanate.

Turning to the economic sphere, as had been widely anticipated, the termination of the Multi-Fibre Agreement at the beginning of the year has severely damaged NBD's textile industry. Of seventeen garment factories in operation at the end of 2005, 'earning valuable foreign dollars', around half have already closed, and those remaining 'are just tottering along' (Borneo Bulletin online, 11 May 2005). Similarly, the only local cement producer continues to fear the demise of its business: it has already reduced output by fifty per cent because of lower demand from the local construction industry, the availability of cheap imports, and protectionism by potential export markets. It appears, therefore, that yet another attempt at economic diversification in the 'Abode of Peace' is on the brink of failure. Fortunately, the international price of hydrocarbons, despite having dipped slightly from its peak, remains at the upper end of the scale. It was reported on the sultanate's official website on 7 May that the government was planning to open to tender two more onshore exploration areas, Block L and Block M. (Most of the production nowadays is offshore).

Finally, inflation appears to be well under control. The Consumer Price Index in January 2005 was only 1.6 per cent higher than that of the same month in 2004 (according to the Borneo Bulletin online, 27 April 2005). Further, in an effort to reduce local unemployment, the Labour Department has specified fourteen job categories under which no work passes will be issued for foreign workers (Borneo Bulletin online, 28 April).

During a visit to the sultanate in early May, Pakistan Premier Shaukat Aziz highlighted potential opportunities in his country for prospective NBD investors (Borneo Bulletin Sunday online, 8 May 2005). There has also been a flurry of diplomatic activity, surrounding the State Visit to Bandar Seri Begawan by the President of the People's Republic of China, the outcomes of which I hope to discuss in a future report.

WATCHPOINT: When will the date for Legislative Council elections be announced?

 

About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top