Supply Chains: Brunei
Brunei is one of the smallest but wealthiest countries in Southeast Asia. In recent years, the government has sought to diversify its economy beyond the oil and gas sectors; as a result, it has established an open investment climate. However, diversification remains a challenge due to Brunei’s small size. Foreign direct investment (FDI) still largely revolves around the petrochemical industry and is highly correlated with global oil prices. In 2020, Brunei received US$577 million in inbound FDI versus US$173 million five years earlier, an increase of 234 percent. In 2020, Brunei’s real GDP grew by 1.1 percent despite COVID-19 headwinds, making it one of the few economies in the Asia-Pacific region to register positive economic growth.
Low taxes, a stable political climate, and a well-educated workforce make Brunei an attractive destination for investment. However, foreign investors face challenges including several bureaucratic hurdles to investment, such as long processing periods for business licenses and regulatory approvals. In response, the government has been actively recruiting foreign investors by attempting to make the business licensing process more efficient and strengthening its intellectual property protection regime. Top sources of foreign investment in recent years include China, Japan, and Malaysia.
Recent Investment/Supply Chain Policies
- On January 6, 2021, the Ministry of Finance and Economy announced the launch of Brunei's Economic Blueprint: Towards a Dynamic and Sustainable Economy. The blueprint lists several objectives to be achieved by 2030, such as the creation of "productive and vibrant businesses" through the exploration of "new markets and opportunities leveraging... technology and innovation" and the fostering of an "open and globally connected economy" through trade facilitation and export diversification.