224 Asian Development Outlook 2009
Import values are much lower than those o energy-oriented exports,reecting the small population (390,000 in 2007) and economy (GDP o
o imports. Brunei also imports most o its ood.Ination averaged 2.7% last year, well above the 0.6% average o theprevious 5 years (Figure 3.22.4). Food (29% o the consumer price basket)was the primary contributor, reecting higher international prices.A currency board arrangement, which links the Brunei dollar to theSingapore dollar one to one, has contained ination expectations and,historically, contributed to low ination. Te ination rate in Brunei isalso suppressed by an extensive system o government subsidies, coveringrice, sugar, and uel, as well as housing, education, and health services.Prices o motor vehicles, inant milk powder, cigarettes, and cooking oilare controlled. Te absence o taxes on personal income and on sales o goods and services also helps keep ination low. Te only signifcant taxesare levied on corporate profts. Import duties are also low, equivalent to2.4% o total tax receipts in FY2007 (ended 31 March 2008)
axes, dividends, and royalties rom oil and gas companies accountor about 90% o fscal revenue (Figure 3.22.5). Fiscal expenditurehas allen in the past couple o years, mainly reecting a decline indevelopment spending. Implementation o projects under the nationaldevelopment plan, Rancangan Kemajuan Negara 2007–2012 (RKN),has lagged signifcantly behind allocations. Higher revenue and lowerexpenditure have contributed to a sharp increase in the fscal surplus inrecent years.In order to speed up RKN project implementation, the Governmentlast year devolved the appointments o project consultants to eachministry responsible or the projects. It also moved toward a design–buildmethod or projects so that one provider (contractor or designer) isaccountable or both the design and construction.Some advances were made in diversiying the economy in 2008.
scheduled to be completed by the end o this year. It is the frst majorinvestment at the Sungai Liang Industrial Park, which is being developedas a petrochemical hub. iCenter, the country’s frst business incubator todevelop local small and medium-sized enterprises in inormation andcommunications technology, was launched in 2008. About 16 companieshave started providing business services in Internet and relatedapplications in the iCenter.
Te global economic downturn is transmitted to Brunei’s economy primarily through lower world demand or energy and the all ininternational energy prices. Te country has ample fnancial resourceso its own and no external debt, so transmission through the fnancialchannel is limited. Income rom investment in oreign assets may moderate, but is unlikely to have a signifcant impact near term giventhe country’s large resources. Foreign direct investment and tourism may slow somewhat, though.Te lack o timely and comprehensive economic data or recent
3.22.3 Hydrocarbon indicators
ProductionAverage priceHHHHHHHHHThousand barrels/day$/barrel
,ProductionAverage priceHHHHHHHHHThousand barrels/day$/MMBTU
Liqueﬁed natural gas
MMBTU = million British thermal units.
Department of Economic Planning andDevelopment,
Brunei Economic Bulletin
, December 2008.
3.22.4 Monthly inﬂation
--Miscellaneous goodsand servicesRecreation andentertainmentTransportationFood and beverageOverallOctJulAprJan
CEIC Data Company Ltd., downloaded 16 March2009.
3.22.5 Fiscal indicators
-Fiscal balanceExpenditure growthRevenue growth
% of GDPEstimate
Data are for ﬁscal years running from April to March.
Ministry of Finance, Brunei Darussalam; staﬀ estimates.