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In the recent Asian turmoil, Brunei, with all its wealth, seems an oasis of calm. It is true that the Brunei currency remains relatively strong and one does not see dramatic economic hardship in ASEAN's smallest state. Nevertheless, there are certain indications of change and tension. First, the fact that oil prices have fallen by over a third during the last year is obvious reason for caution in this oil-dependant state. There have already been cut-backs in government spending and an inevitable flow-on impact on the employment of foreign workers and the general level of public confidence. Secondly, the close attention given to developments in Indonesia in recent months - even in the carefully nuanced reportage of the Brunei paper, the Borneo Bulletin - hints at a degree of interest in the possibility of political change in Brunei itself. The current atmosphere does not suggest the likelihood of imminent change, but, just as in Malaysia, the passing of a long-serving political leader and the widespread attack on an illiberal political system are matters of constant comment. A third area of possible disturbance in Brunei is a growing interest in certain influential circles in promoting Islamic values and institutions. The cancellation of Australian lamb imports some months ago - justified by concerns about the adequacy of arrangements for halal slaughter - is one indicator of such a development. In some quarters of society and government there is also a vigorous interest in the implementation of a law code based on Islamic Law, the Sharia. At present the Brunei legal system is a British colonial one, including much legislation of English origin, and it might be suggested that some questioning of this system is an inevitable part of the process of decolonisation. In this regard, it should be remembered that Brunei became fully independent only in the mid 1980s. Another consideration in explaining the current Islamic enthusiasm in political, legal and social areas is the role of religious influence from Malaysia, where there has occurred a strengthening of Islamic institutions since the 1970's. To replace the colonial-based law with a more Islamic-influenced system, however, raises two issues. First, Brunei is in many ways a moderate rather than a Fundamentalist Muslim state: it is influenced by long-established traditions of Muslim kingship and the government is also concerned to promote a strong commitment to Malay ethnicity as well as a sense of Islamic brotherhood. Secondly, the Brunei government is seeking to become a serious player in ASEAN, and particularly a major centre of commercial activity in the East Asian Growth Region, embracing Indonesia's Sulawesi, Moluccas and Kalimantan, Malaysia's Labuan, Sarawak and Sabah and the Southern Philippines. Demands to implement a more vigorously Islamic legal (and perhaps political) system will need to be balanced against the desire to present Brunei as a growing commercial entrepot especially attractive and welcoming to the international business community.
WATCHPOINT: How will the call for Islam-inspired reforms be balanced against the government's commercial aspirations for Brunei?
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.
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