- About Us
- What We Do
- Sector Expertise
- Contact Us
This report tackles three main issues: (1) the impact of the tsunami on Negara Brunei Darussalam; (2) the demise of the Multi-Fibre Agreement; and (3) Bandar Seri Begawan's aspirations to city status.
Negara Brunei Darussalam (NBD) entered 2005 in a sombre mood. New Year celebrations were cancelled on the orders of Sultan Hassanal Bolkiah; instead prayers were to be said on 31 December in mosques throughout the land in honour of the victims of the Indian Ocean disaster. His Majesty sent messages of condolence on 27 December to heads of state whose countries had been swamped by the tidal wave, and this concern was repeated in the monarch's New Year message on 31 December. At an emergency ASEAN Summit in Jakarta in early January, His Majesty pledged the sultanate's support in the forthcoming reconstruction work. A public fund was opened for survivors on 3 January and raised NBD$250,000 on its first day (BBO 4.1.2005), $83,000 more on the second, and doubled to more than $660,000 on the third (GBOW ON 6.1.2005).
NBD itself lies beyond the main earthquake, volcano, and typhoon zones. It is true that the sultanate suffers from the occasional angin kencang (strong wind) and even from flooding; one instance of the former occurred on 8 December 1990 whilst a well-known case of the latter happened in 1963. But by and large NBD appears to be immune from the kind of disasters which afflict neighbouring countries, such as the eruption of Pinatubo in June 1991, which killed 343 Filipinos and left 200,000 homeless; or that of Krakatoa, which cost 36,000 lives in 1883, let alone the explosion of Tambora (Sumbawa) in April 1815 the most powerful in history which may have caused up to 96,000 fatalities. The sultanate is usually spared even the typhoons which battered the Philippines in late 2004. NBD was not directly touched by the Boxing Day tsunami; and even travellers from the sultanate to the devastated areas emerged largely unscathed. Two Bruneians attending a scuba diving course in Thailand were reported missing on 4 January, but turned up safe and sound on the next day. It is unlikely that NBD's economy will be seriously disrupted by the regional calamity. The sultanate's exports, mostly oil and liquefied natural gas, find their main market in Japan, followed a long way behind by Thailand, South Korea and the USA, whilst the sultanate's main sources of imports are Malaysia and Singapore.
Of more immediate concern is the demise of the Multi-Fibre Agreement at the end of 2004 and the resultant loss of NBD's quotas, particularly in the USA. This threatens the sixteen local factories producing garments, the sultanate's second most valuable export, worth NBD$302m in 2000 and $90.1m in January-May 2004. In the new free-for-all, competition from China is particularly feared; it is believed that the People's Republic of China might capture up to fifty per cent of the world market. One way for NBD to survive in the post-MFA climate might be by concentrating on quality and (undefined) 'marketing preferences' (BBO 25.12.2004). Another means of defence might be via integration of the ASEAN textile industry; Thailand and Cambodia, for example, were producers of 'yarns and material', which could be converted into finished products in NBD. The essence of the matter is that NBD will have to become more competitive to survive in this sector. It is true that the industry is largely foreign-owned and depends upon an imported workforce; but the local expenditure of these twelve thousand workers makes a valuable contribution to the NBD economy.
In a separate development, Haji Saji Mudin, Chairman of the Bandar Seri Begawan Municipal Board, announced on 12 December 2004 that the national capital was seeking city status by 2010. Neighbouring Kuching and Kota Kinabalu have already been cities for some years, whilst even a provincial centre like Miri is set to join them on 25 May 2005. Bandar Seri Begawan evidently feels a need to catch up. Known previously as Bandar Brunei or Brunei Town, it assumed its present name on 4 October 1970 in honour of the late Seri Begawan sultan, namely His Highness Sir Omar Ali Saifuddin III, father to His Majesty Sultan Hassanal Bolkiah.
Whether by accident or design His Majesty subjected the capital to two surprise inspections in late December. The Bandar Seri Begawan Municipal Board, which traces its origins back to 1 January 1921 (following the Sanitary Boards Enactment of 1920), is responsible for the day-to-day administration of the capital. It has a payroll of more than one thousand. As a result of royal displeasure, improvements are to be made to the tamu (open market) in Sungai Kianggeh, which is to be made cleaner, safer, and more orderly, and to the Pasar Tambing (fish and vegetable market). The main issue to emerge on His Majesty's second visit, on 29 December, was the need for computerisation and for the elimination of queuing by members of the public at the municipality's offices.
On 20 December the Labour Department and the Department of Immigration and National Registration had come under His Majesty's scrutiny. Once again the issues of queuing and computerisation were highlighted. It is estimated that in 2002, there were more than 100,000 foreign workers in the country, of whom seventy-two per cent in the private sector. On 18 December more than two hundred members of NBD's law enforcement agencies launched a joint operation in Kampong Ayer to apprehend foreigners who were said to be illegally occupying some of the dwellings. It is believed that the River Village is now 'swamped by foreign workers renting houses provided by locals who have themselves moved onto land'. Members of the public were reminded that it is an offence to let houses in Kampong Ayer or to allow anyone other than immediate family members to stay in them.
Two new laws came into effect on 20 December 2004 (although, curiously enough, there is no mention of these decrees having been debated or approved in the new Legislative Council). First, the Employment Agencies Order 2004, which aims to protect foreign workers from exploitation and to control the activities of employers and agents who had been 'smearing the good image of the country with their misdeeds'. Secondly, the Trafficking and Smuggling of Persons Order 2004 criminalised the act of trafficking and smuggling of people and imposed draconian penalties on offenders. Although no such case had come to light in NBD thus far, there had been instances of foreign workers not being paid their salaries and reports of sexual exploitation which had been thus 'misinterpreted'.
A couple of quick points to round off this report. First, in mid-October NBD deployed a token force of peacekeepers at Cotabato City in Mindanao, where soldiers of the Royal Brunei Armed Forces are participating in an International Monitoring Team (IMT) safeguarding a cease-fire between the Philippine Government and the MILF. Secondly, the Northern Territory of Australia, previously only an 'observer', was admitted to the BIMP EAGA (NDB Indonesia Malaysia Philippines East ASEAN Growth Area) in November 2004. The new unit is to be known as 'BIMP-EAGA Plus One' (BBO 22.12.2004). Hence a strengthening of the already excellent relations between Canberra and Bandar Seri Begawan can reasonably be anticipated.
Acknowledgements: This paper draws upon newspapers and Internet sources, such as the Borneo Bulletin online, Pelita Brunei, and the Sunday Times (London), as well as the Brunei Annual Report (1921), and secondary works by JZ de Boer & D Saunders, DE Brown, D Dresner, H James & D Sheil-Small, and MC Ricklefs.
WATCHPOINT: The economic effects of the tsunami on NBD (and the wider region), and Bandar Seri Begawan's progress towards city status will bear further monitoring.
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.
Jan 16 2017 — Portfolio Investment in Asia 2017
Jan 16 2017 — COMPARATIVE OPERATING COSTS IN ASIA 2016
Jun 16 2016 — Emerging Markets As Investment Targets