Brunei Darussalam: Human And Economic Development


AVM Horton

The latest annual Human Development Index issued by the UN Development Programme on 15 July 2004 ranks Negara Brunei Darussalam (NBD) in thirty-third place in the world (BBO 16.7.2004), compared to forty-fourth in 1992 (SYB 1995-96:225) and thirty-second more recently (SYB 2002:333; SYB 2003:331); so whilst the general trend in its human development is upwards, the sultanate has become somewhat becalmed in the twenty-first century. Ignoring reservations about the validity of the index, NBD currently stands in fourth position among Asian nations behind Japan, Singapore, and South Korea. The Bornean kingdom outpaces approximately equivalent West Asian states with which it has close ties, such as Bahrain (in fortieth spot), visited by His Majesty Sultan Hassanal Bolkiah in late May 2004, and Oman (74th); whilst neighbouring Malaysia is ranked in fifty-ninth place. The index takes account, not just of per capita income, but also of educational levels, health care, and life expectancy.

The scale of NBD's achievement will be better appreciated when it is recalled that the sultanate lacked even a government secondary school as late as 1951 and it was not until 1958 that the first local person qualified as a trained nurse (Brunei Annual Report 1958:77). In 1959, the infant mortality rate stood at ninety-three per thousand live births, compared to fewer than six per thousand nowadays (PB 6.2.2002:10). It was 1985 before a local university was founded.

Another report highlights the fact that twenty-one per cent of deaths in NBD during 2003 (213 out of 1,010) were caused by heart problems, with a further fifteen per cent being accounted for by cancer (BBO Tu.6.7.2004). These maladies are usually regarded as 'diseases of affluence'; so, paradoxically, such data may be considered as confirmation of the sultanate's development. The government is encouraging the public to take up sports and to exercise more. Road accidents, another major cause of mortality, accounted for twenty-six fatalities during 2003, a marked improvement on the toll in both 1997 (sixty-one) and 1998 (fifty) (PB 17.2.1999:2). 'Human development' in NBD has coincided largely with the reigns of the present monarch and that of His Majesty's father, Sultan Omar Ali Saifuddien, and has owed much to the resources generated from the sultanate's oil and gas production.

Sultan Hassanal Bolkiah was in Seria on 8 May 2004 to officiate at celebrations marking the seventy-fifth anniversary of the discovery of the oilfield there (BBSO 9.5.2004). Ten years of delivering liquefied natural gas to South Korea have also been marked (GBOW ON 17.6.2004). On 16 June 2004, Brunei Liquefied Natural Gas Sdn Bhd (BLNG) and Korea Gas signed a new Memorandum of Agreement, reportedly covering the period between April 2003 and March 2008. The reason for the back-dating is not explained. A clue is provided perhaps in the remark of BLNG's Chief Executive Officer to the effect that 'discussions for the new pricing terms have not been easy' (BBO 17.6.2004). BLNG is currently upgrading its plant, but this process is not expected to disrupt existing production levels to any appreciable extent (BBSO 16.5.2004).

The price of crude oil averaged US$30.17 per barrel in 2003 compared to only US$25.33 in 2002, whilst LNG rose to US$4.54 per million btu (British thermal units) in 2003 from US$4.17 per million btu in the previous year. The oil and gas sector's contribution to GDP increased from 37.1 per cent in 2002 to 39.8 per cent in 2003, thanks largely to these higher prices. The Borneo Bulletin, citing the Brunei Economic Bulletin, reported that NBD's economy expanded by 3.2 per cent in real terms during 2003 and was expected to grow by a similar amount in 2004, provided that demand holds up in the sultanate's major markets, such as Japan, South Korea, and China (BBSO 16.5.2004). The government enjoyed a budget surplus of NBD$917 million in 2003 compared with a deficit of $378.5 million in the previous year. Revenue in 2003 amounted to NBD$4,925 million (nearly forty-five per cent higher than the original 'estimate'), whilst expenditure totalled $4,008 million (nineteen per cent below the budget forecast) (BBO 1.5.2004).

Less positively, dissatisfaction continued to be voiced about 'red tape', which was supposedly hampering local business activity (BBO 12.6.2004). Moreover, it was feared that 'soaring steel prices' might cause retail prices of imported cars to increase in the near future (BBO M.19.4.2004), although dealers remain on course to sell more than ten thousand vehicles in 2004 (BBO 10.6.2004). This is not an insignificant matter: the Royal Customs and Excise Department raised NBD$103 million in 2003, of which car import tax accounted for $56 million (BBO F.18.6.2004).

The Brunei International Financial Centre (BIFC) is facing competition from neighbouring Labuan (BBO 12.5.2004), which provides a possible means for NBD investors to tap in to the Malaysian market (BBO 10.5.2004). Mr Robert Miller, Head of Supervision at the BIFC, stated that his organisation and the Labuan International Offshore Financial Centre will co-operate as much as possible because there is 'plenty of good work for everybody' (BBO 12.5.2004).

The private sector in the sultanate, having been subjected to criticism for 'weakness and backwardness' in 'certain consultant reports', was defended in May 2004 by Haji Mohd Razali bin Johari, President of the Malay Chamber of Commerce and Industry, who stated that the membership was offended: 'It is not right that we should be poorly judged against measures which are more indicative of avarice, anarchy, aggressiveness, antagonism and animosity', he said. 'Besides upholding the MIB [Malay Islamic Monarchy] concept, the Bruneian way of doing business is that of prudence, patience, perseverance, moderation and pride' (BBO 13.5.2004).

An NBD$28 million lens-manufacturing project is under way, involving an NBD-South Korea joint venture. The factory is being built at Lambak Kanan. It is reported that the company aims to produce up to 600,000 lenses a month largely for export purposes. Employment will be provided for 325 people, of whom nearly half are to be recruited locally, with the prospect of further Bruneisation in due course (BBO 15.6.2004).

Prosperity is not without its drawbacks. Bandar Seri Begawan is now ranked as the 110th most expensive city in the world, according to a survey by Mercer Human Resource Consulting (BBO 19.6.2004). Furthermore, during the second quarter of 2004 there were two cases of alleged corruption featuring prominent persons, all of whom are pleading 'not guilty'. The first trial is a multi-million dollar affair involving a former government minister and a wealthy contractor; in the second case, which is on an altogether smaller scale, the defendant is a former director of forestry. The Anti-Corruption Bureau received 214 reports from members of the public during 2003 (BBSO 27.6.2004). Most of these allegations were anonymous and unsubstantiated (although not necessarily malicious). Investigations were launched in ninety-six cases. The number of successful prosecutions is not stated. The government encourages the public to remain vigilant and warns that failure to report a known case of bribery is itself an offence.

Key: BBO (Borneo Bulletin online); BBSO (Borneo Bulletin Sunday online); GBOW ON (Government of Brunei Darussalam Official Website: Online News); PB (Pelita Brunei); SYB (Statesman's Year-Book).

WATCHPOINT: Will the current hydrocarbon boom have a positive effect on further human development in the sultanate?


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