Brunei Darussalam WT/TPR/S/84 Page 1 I. ECONOMIC ENVIRONMENT (1) RECENT ECONOMIC DEVELOPMENTS 1. Brunei Darussalam has one of the highest standards of living amongst its ASEAN partners; estimated per capita income was B$23,627 (some US$13,800) for the year 2000 (Table I.1). The country, situated on the northern end of the island of Borneo, has a total area of 5,765 square kilometres, some 80% of it forested. Brunei's population in 2000 was estimated at around 338,000, of which, it appears, some 40% were expatriate workers. Table I.1 Basic economic and social indicators, 1990-2000 (B$ million and per cent) a a b 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 National income Current GDP 6,508.6 6,620.5 6,565.1 6,585.1 6,686.2 7,394.2 7,408.6 7,628.1 7,030.5 7,615.3 7,995.5 (B$ million) GDP per capita (B$ '000) At market 25,685 25,415 24,515 23,833 23,502 24,980 24,283 24,260 21,760 23,028 23,627 prices At constant 14,227 14,398 13,851 13,493 13,340 13,211 12,951 13,020 12,165 12,180 12,256 prices Share in GDP Per cent Agriculture 1.8 1.8 1.9 1.9 1.9 1.8 1.9 2.0 2.3 2.1 2.0 Forestry 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.3 Fishing 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 Petroleum and 49.6 50.4 45.4 41.8 36.0 38.7 36.3 39.2 30.4 35.3 36.9 natural gas Manufacturing 2.7 2.9 3.1 3.2 3.2 3.0 3.2 3.3 3.8 3.8 3.9 Electricity 0.9 0.9 1.0 1.0 1.0 1.0 0.8 0.7 0.9 0.8 0.8 Construction 4.3 4.6 4.8 5.1 5.5 5.5 6.6 6.9 7.7 7.0 6.9 Services 38.2 41.0 45.4 48.7 51.9 51.4 52.6 49.2 56.3 52.1 50.6 Financial services Banking 3.4 3.6 3.7 3.9 4.1 4.0 4.8 4.8 5.6 5.3 5.2 Insurance 1.0 1.1 1.1 1.2 1.2 1.2 1.5 1.5 1.7 1.6 1.6 Wholesale 1.9 1.9 2.1 2.2 2.3 2.2 2.3 2.4 2.7 2.6 2.7 trade Retail trade 4.0 4.1 4.3 4.5 4.6 4.4 5.4 5.3 6.0 5.7 5.6 Hotels and 1.0 1.0 1.1 1.1 1.1 1.1 1.2 1.2 1.4 1.3 1.2 restaurants Transport and 3.3 3.6 3.8 4.0 4.2 4.0 4.1 4.5 5.3 5.1 4.9 communication Real estate 1.0 1.0 1.1 1.1 1.1 1.1 1.2 1.2 1.4 1.3 1.2 Social and 21.8 23.7 27.2 29.6 32.2 32.3 30.9 27.1 30.9 28.0 27.0 personal services Ownership of 0.8 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.3 1.2 1.2 dwellings Less banking 2.2 2.3 2.4 2.5 2.6 2.5 2.7 2.8 3.1 2.9 2.8 charges Table I.1 (cont'd) WT/TPR/S/84 Trade Policy Review Page 2 a a b 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Share in employment Agriculture, .. 2.0 .. .. .. 2.5 .. .. .. .. .. forestry and fishing Petroleum and .. 5.0 .. .. .. 4.0 .. .. .. .. .. gas Manufacturing .. 3.8 .. .. .. 4.8 .. .. .. .. .. Electricity and ..2.1.................. water Construction .. 13.3 .. .. .. 8.9 .. .. .. .. .. Services .. 73.7 .. .. .. 79.8 .. .. .. .. .. Social indicators (Million) Population 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Urban ..0.2.................. population Unemployment .. 4.7 .. .. .. 4.9 .. .. .. 4.6 .. (%) Birth rate (per 27.7 27.3 27.2 26.5 25.6 24.8 25.0 23.7 22.9 22.3 .. 1,000 population) Life expectancy at birth male .. 72.1 .. .. .. .. .. 74.2 73.8 74.0 .. female .. 76.5 .. .. .. .. .. 75.0 75.8 76.3 .. Education (%) Primary/ 62.5 61.3 61.0 60.6 60.9 60.9 60.7 59.9 59.5 58.4 .. preparatory Secondary 37.5 38.7 39.0 39.4 39.1 39.1 39.3 40.1 40.5 41.6 .. a Provisional (GDP figures only). b Estimated data. .. Not available. Source: Government of Brunei Darussalam. 2. Brunei's economic prosperity is largely based on its abundant petroleum and natural gas resources, first discovered in the 1920s; the petroleum and natural gas sector currently accounts for around 37% of GDP, although this figure has declined from almost 50% of GDP in 1990. With agriculture and manufacturing playing relatively minor roles in the economy, the importance of services has grown, from a share of 38% to 51% of GDP between 1990 and 2000. Services are also a key source of employment, providing jobs for some 80% of the labour force. 3. Recent economic growth has varied considerably owing mainly to changes in international prices for petroleum, Brunei's main export, the effects of the Asian economic and financial crisis, which has affected the south-east Asian region since 1997, and the collapse of Amedeo, a large development corporation. As a result, real GDP growth, which averaged 2% between 1990 and 1997 (non-oil GDP growth averaged 4.5% during this period), contracted by 4% in 1998; the contraction was largely due to a sharp fall in real growth of the petroleum and natural gas sector by almost 12% in 1998, compared with growth of 5.4% the year before. Higher petroleum prices in 1999 have led to a recovery in the petroleum and gas sector, although non-oil GDP growth remains weaker than in 1990-97, primarily due to a contraction in the construction industry in 1999 (Table I.2). Real GDP growth is expected to be 3% in 2000. Brunei Darussalam WT/TPR/S/84 Page 3 Table I.2 Economic performance, 1990-2000 a a b 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Real GDP growth (% change) 2.7 4.0 -1.1 0.5 1.8 3.0 1.0 3.6 -4.0 2.5 3.0 Petroleum and gas 2.2 3.1 -5.7 -2.4 -1.0 1.0 -0.3 5.4 -11.8 3.4 3.2 Non-oil GDP 3.7 5.7 6.5 4.8 5.6 5.7 2.6 1.4 5.7 1.5 2.8 Agriculture and fishing 0.9 1.1 1.6 1.7 0.7 2.2 4.9 2.8 2.4 -0.2 2.3 Manufacturing, mining & quarrying 2.0 5.2 -5.7 -2.2 0.0 1.6 5.3 4.5 -12.3 3.8 3.3 Electricity and water 7.7 1.0 3.5 0.3 1.6 3.1 -5.3 -6.3 6.7 -5.3 9.6 Construction 3.3 2.6 1.2 2.7 6.1 8.1 3.0 6.9 3.1 -4.0 2.5 Services .. .. .. .. .. .. .. .. .. .. .. Transport and communications 4.7 -1.6 2.5 3.0 5.5 3.1 4.2 6.4 1.5 1.4 2.4 Social and personal services (incl. 2.4 9.9 10.1 6.9 6.9 6.2 1.6 -2.1 7.1 1.1 2.4 Government services) Trade hotels and restaurants 4.5 -7.7 -0.6 -0.6 -4.8 0.9 -27.7 15.3 9.5 2.0 2.9 Banking and insurance 13.7 0.4 3.2 3.6 6.0 7.1 8.5 7.7 5.3 3.4 2.3 Government services .. .. .. .. .. .. .. .. .. .. .. Savings and demand (% of GDP) Gross national savings ...................... Gross domestic investment .. .. .. .. .. .. .. .. .. .. .. Inflation and exchange rate (% change) GDP deflator 8.4 -2.2 0.3 -0.2 -0.3 7.3 -0.9 -0.6 -4.0 5.7 2.0 CPI (period average) 0.0 1.6 1.3 4.3 2.4 6.0 2.0 1.7 -0.4 -0.1 1.0 b Nominal effective exchange rate .. 90.7 93.3 94.9 97.5 100.0 103.2 104.6 .. .. .. (1995 = 100) b Real effective exchange rate .. 89.2 90.1 92.9 94.6 100.0 102.7 103.6 .. .. .. (1995 = 100) Money and credit (B$ million) Broad money (M3) 4,468 4,669 4,871 5,392 7,472 8,020 7,834 8,116 8,022 8,070 8,941 Credit to public sector .. .. .. .. .. .. .. .. .. .. .. Credit to private sector 1,255 1,831 1,927 2,410 3,200 2,562 3,160 5,219 3,776 3,761 4,024 Interest rate (%) Saving rate on deposits below B$100,000 .