Brunei Darussalam: Areas for Improvement Identified

2004

Dr AVM Horton

In a titah (address) to the nation on New Year’s Eve HM Sultan Hassanal Bolkiah took as his theme the need for a ‘high quality civil service’. During the previous twelve months His Majesty had inspected government agencies in all four districts of Negara Brunei Darussalam (NBD) and had observed that the quality of service ‘needed to be improved’ and, indeed, would ‘become the core subject’. His Majesty was looking for renewed dedication and commitment from all civil servants in the execution of their duties (BBO 1.1.2004). One problem (not cited) is the sheer size of the public sector, which accounts for half of the entire workforce (HSBC 2002:12). Radical reform may be necessary if the shortcomings identified by His Majesty are to be overcome.

In another section of his titah the national head of Islam (His Majesty) warned Muslims to be on their guard against ‘elements seeking to undermine the tranquillity and prosperity of the country’. Among ‘social threats’ are violations of religion ‘which in the end could jeopardise peace’ (BBO 1.1.2004). In fact, the Islamisation of the sultanate is proceeding apace: a total of 323 persons embraced Islam in January-August alone (BBO 13.9.2003). In December 2003, the Brunei National Solidarity Party (PPKB) objected to a report issued by the US State Department, which accused NBD of being a nation which ‘restricted religious freedom’. Dr Haji Mohd Hatta bin Haji Zainal Abidin, PPKB President, claimed that such liberty had existed in NBD for a long time and invited the miscreants responsible for the allegations to come to the country to see for themselves.

The NBD government, with the cooperation of the Islamic Development Bank of Jeddah, has approved the establishment of a Centre for Islamic Banking, Finance and Management at Universiti Brunei Darussalam (UBD). In fact, UBD has already started a minor programme in this field and the first graduates are due to emerge later in 2004 (GBOW ON 8.1.2004). As part of its plan to become a ‘regional centre for the spread of Islam’, the government is ready to develop an international Islamic financial market in the ‘Abode of Peace’ (Darussalam). This will not be easy. Another report mentions that the development of Islamic banking in the sultanate has been hampered by several factors, highlighting the recent origin in NBD of this type of business, the shortage of qualified personnel, and the need for expensive investment in information technology. Such problems make it difficult for Islamic banks to compete with conventional banks, which have massive international resources upon which to draw (BBO 6.1.2004). A possible solution suggested was to encourage the transformation of conventional banking into Islamic banking (GBOW ON 8.1.2004).

Among domestic economic indicators, the car market showed signs of improvement during 2003 with 11,214 cars being sold, an increase of about three per cent compared with the previous year. On the other hand sales of heavy vehicles, a litmus test of the construction industry, were ‘not encouraging’ (BBO 10.1.2004). Furthermore shopkeepers in Bandar Seri Begawan complained of a ‘slump in business’, following a decline in the population of Kampong Ayer (the traditional ‘River Village’ section of the capital) because of fires and because of residents’ increasing preference to move to dry land (BBO 1.11.2003). Plans were afoot for the creation of a ‘Brunei Business Development Council’ to give a more effective and unified voice to the private sector in the sultanate (BBO 3.1.2004).

In the international arena, His Majesty insisted in his titah that efforts to maintain peace and prevent terrorism must be continued. His Majesty also made vague remarks about ‘different approaches’ being made, or needing to be made, by international organisations such as the United Nations. NBD sought a strengthening of the global multilateral trading system via regional bodies such as ASEAN, APEC and ASEM; and hoped to advance the current round of WTO trade talks.

As an example of the sultanate’s own successful trade negotiation efforts, the Brunei Shell Petroleum Company’s contract to sell petroleum to India during the second half of 2003 was duly renewed on 5 January 2004, this time for a whole year: a similar volume of ten thousand barrels per day of Seria Light Export Blend will be delivered to the Indian Oil Corporation’s refinery at Chennai. The BSPC hoped the deal would develop into a long-term business relationship with its state-owned Indian partner (BBO 6.1.2004). On 17 December the NBD government extended the BSPC’s mining agreements for nineteen years (taking them to the end of 2022), with an option for a further fifteen years. There is evidently no expectation of the sultanate’s hydrocarbon reserves being exhausted any time soon. International oil prices during the quarter fluctuated around the US$27-31 level on the benchmark London market.

One comparatively new buzzword in the sultanate is ‘e-government’ (BBO 29.12.2003). On 22 December 2003, the Prime Minister’s Office (PMO) signed a contract worth over NBD$23 million for a project known as ‘PMOnet’. Under this scheme IBM Business Consulting Services and a local concern, Syabas Technologies, have undertaken to design a state-of-the-art information technology infrastructure, which will enable the government to deliver better services to the public and make improvements in information sharing. This may also assist in improving transparency, accountability and efficiency.

WATCHPOINT: Improvements in the efficiency of the civil service are likely to be a key focus in 2004. Key: (a) BBO - Borneo Bulletin online. (b) GBOW ON - Government of Brunei Official Website, on-line news. (c) HSBC - Hongkong and Shanghai Banking Corporation Limited Brunei Darussalam (HSBC Business Profile Series; Group Public Affairs Department, HSBC, HK; eleventh edition, fourth quarter 2002; copy supplied by courtesy of HSBC, London). (d) PB Pelita Brunei (NBD government’s weekly Malay-language newspaper).

 

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