Information about Asia and the Pacific Asia y el Pacífico
Journal Issue
Share
Article

Brunei Darussalam

Author(s):
International Monetary Fund
Published Date:
July 1996
Share
  • ShareShare
Information about Asia and the Pacific Asia y el Pacífico
Show Summary Details

Brunei Darussalam: Basic Data

199019911992199319941995
(In constant prices, percentage change)
National Accounts
GDP2.74.0−1.10.51.82.0
GNP 1/2.70.9−3.7−2.38.8−0.4
(In millions of Brunei dollars)
GDP6,5096,6216,5656,5856,6867,067
GNP9,9729,9619,6229,38410,45010,698
(In millions of U.S. dollars)
GDP3,5913,8324,0304,0754,3784,985
GNP5,5025,7665,9065,8086,8427,547
Oil and gas
Production per day
Oil (thousands of bands)152165182175178175
Gas (million of cubic feet)9169409539659931,079
Average prices received
Oil (US$ per barrel)23.520.720.718.817.118.3
Gas (USS per mn. btu.)3.83.53.33.13.03.4
Prices
CPI inflation rate2.11.61.34.32.46.0
Public finances (in percent of GDP)
Total revenue41.640.641.651.964.650.1
Tax24.722.019.617.316.315.8
Nontax16.918.522.034.648.334.2
Total expenditure42.941.746.651.664.151.6
Current expenditure29.930.633.936.134.833.4
Capital expenditure13.011.112.715.515.815.4
Investment in public enterprises0.00.00.00.013.52.9
Fiscal balance (deficit)−1.3−1.1−5.00.30.5−1.6
Money and banking (percentage change) 2/
Claims on private sector26.946.05.225.134.3−3.9
Money5.3−3.78.90.578.9−22.9
Of which Currency outside banks3.45.98.62.01.310.2
Quasi-money12.313.50.121.06.324.5
Broad money8.54.54.310.739.4−3.8
Prime lending rate (end of period)7.07.06.05.86.06.5
Balance of payments (USS mn.) 1/, 2/
Trade balance1,2641,4151,2561,100653704
Exports2,2122,4702,3722,2802,2152,746
imports9481,0551,1151,1811,5622,042
Investment income, net1,9171,9391,8821,7382,4712,569
Current account surplus2,7242,9442,6762,5902,9992,867
Current account surplus (in percent of GDP)75.976.866.463.668.557.5
Total international reserves 2/2,2742,1342,5732,4794,3964,008
Official5455313773551,065967
Commercial banks1,7291,6032,1962,1243,3323,040
Exchange rate
Brunei dollar per U.S. dollar (period average)1,81251,72761,62901,61581,52741,4175
Nominal effective exchange rate 3/113.9116.8119.7120.3122.8125.5
Real effective exchange rate 3/105.1105.3106.3108.9110.7116.9
Sources: Data provided by the Brunei authorities; and staff estimates.

GNP and balance of payments data are based on staff estimates of net foreign investment income.

Data for 1995 are for September.

Period average; 1980 = 100; Data for 1995 are January−November average.

Sources: Data provided by the Brunei authorities; and staff estimates.

GNP and balance of payments data are based on staff estimates of net foreign investment income.

Data for 1995 are for September.

Period average; 1980 = 100; Data for 1995 are January−November average.

I. Overview

The Brunei economy is dominated by oil and gas production, which accounts for about 55 percent of total GDP. Sizable fiscal revenue from oil and gas production has enabled the Government to maintain a large public sector with generous remuneration, an extensive welfare system, and a high level of investment in infrastructure. On the external side, sizable oil and gas exports and the steady accumulation of net foreign assets over many years have provided Brunei with a comfortable external payments position, which has facilitated the maintenance of a liberal exchange and trade system. At the same time, the long-standing parity between the Brunei and Singapore dollars has promoted a stable macroeconomic environment in Brand. While the oil and gas sector has provided only limited opportunities for employment, the public sector traditionally has absorbed the rapidly growing local labor force.

As oil and gas revenue continued to decline, it became increasingly important to diversify the economic base. Despite the authorities’ efforts in this regard, the development of the non-oil/gas sector so far has been limited. Although the non-oil/gas sector GDP has grown steadily in recent years, the growth mainly came from service and construction sectors which were driven by the increase in Government and quasi-Government expenditures. The functioning of the labor market is a major concern. Given the limited room for additional employment in the already large public sector, the unemployment rate of Bruneian labor appears to have risen further from 7.7 percent in 1991. At the same time, Brunei has become increasingly dependent on foreign labor for low skilled work. The fiscal situation has come under pressure in recent years. Without any new significant revenue measures, the Budget has been increasingly relying on transfers from the accrued foreign assets to maintain the high level of fiscal expenditures. On the external side, both the trade and current account positions have continued to deteriorate as imports have risen sharply while exports remained stagnant.

During 1994–95, domestic demand picked up strongly mainly due to the rise in Government expenditure. As the Government accelerated the implementation of key projects in the Sixth National Development Plan (NDP), large community-oriented projects were also implemented The increase in investment spending and associated consumption boom resulted in a sharp growth in imports and a significant rise in inflation. In the meantime, broad money continued to expand rapidly as substantial funds were brought into the banking system from abroad to finance major development projects.

II. Real Sector

Despite efforts for economic diversification, the Brunei economy is still heavily dependent on the exploitation of oil and gas. In recent years, while the oil/gas sector has shown negative growth, the rest of the economy has recorded steady growth averaging about d percent during 1991–95 (Table 1, Chart 1). The growth mainly came from service and construction sectors driven by the increase in Government and quasi-Government expenditures Inflation in Brunei has been quite moderate in line with imported inflation but, in 1995, it rose to 6 percent due to mounting demand pressures on nontraded goods fueled by a sharp rise in construction projects as well as some adjustment in import duties Given the limited room for additional employment in the already large public sector, there is an urgent need to create employment in the private sector for a rapidly growing local population Although the authorities have been trying to promote (“Bruneization”)—by encouraging the private sector to employ Bruneian citizens in high-skilled and well-paid jobs—this policy has met with limited success The main obstacle is the strong preference for public sector employment, because of its generous remuneration including various fringe benefits.

Table 1.Brunei Darussalam: Selected Real Sector Indicators, 1990–95
Est.
199019911992199319941995
National accounts (constant prices; percent change)
GDP2.74.0−1.10.51.82.0
Oil/gas GDP2.23.1−5.7−2.4−1.0−1.1
Non-oil/gas GDP3.75.76.54.85.66.0
Private sector non-oil/gas GDP5.5−4.09.310.311.03.6
GNP 1/2.70.9−3.7−2.38.8−0.4
Share of Oil/gas
Oil/gas (percent of GDP)62.962.359.457.756.154.4
Non-oil/gas (percent of GDP)37.137.740.642.343.945.6
GDP (B$ mn.; current prices)6,5096,6216,5656,5856,6867,067
GNP (B$ mn., current prices)9,9729,9619,6229,38410,45010,698
GDP per capita (USS)14,17114,71215,04914,75015,38717,012
GNP per capita (USS)21,71122,13522,05521,02024,04825,755
Oil and gas production
Oil (thousands of barrels per day)152165182175178175
Gas (million of cubic feet per day)9169409539659931,079
Labor force
Population 2/253,400260,482267,800276,300284,500293,035
Labor force (number of persons)106,746
Of which temporary residents (percent)41.2
Unemployment rate 2/7.7
Prices (percent change)
CP12.11.61.34.32.46.0
GDP non-oil/gas deflator3.63.02.32.12.43.1
Memorandum item
Exchange rate, BS per USS (period average)1,8131,7281,6291,6161,5271,417
Source: Data provided by the Brunei authorities; and staff estimates.

GNP Data are based on staff estimates of net factor income.

Excluding temporary residents.

Source: Data provided by the Brunei authorities; and staff estimates.

GNP Data are based on staff estimates of net factor income.

Excluding temporary residents.

CHART 1BRUNEI DARUSSALAM: Output and Prices, 1984–95

Source: Data provided by the Bruneis authorities; and staff estimates.

1/ GNP based on staff estimates of net factor income.

Box 1Background

Brunei Darussalam—Brunei, Abode of Peace—is a country covering some 6,000 square kilometers with a population of less than 300,000. Brunei Darussalam is a Malay Muslim Monarchy ruled by the Sultan who is also the highest religious authority of the country. It gained independence in 1984, after having been a British protectorate for about a century. Situated on the northwest coast of the island of Borneo and bordering on the South China Sea, Brunei is surrounded by the east Malaysian state of Sarawak, and divided into two parts by the district of Limbang in Sarawak. Brunei is rich in natural resources which consist almost exclusively of oil and natural gas reserves. Additionally, there are gravel deposits in the Temburong district and potentially valuable high-grade silica deposits in the Tutong district. Its coastal waters support a wide variety of marine life, while the largely unexploited mangroves and primary rainforests afford a valuable opportunity for ecotourism as well as research. Only about 15 percent of land is under cultivation.

Malays constitute the largest ethnic group, accounting for 67 percent of the population; Chinese and non-Malay indigenous groups account for 15 percent and 6 percent, respectively. The population is growing rapidly, at an annual rate of over 3 percent, and 60 percent of the population is less than 30 years of age. Thanks to the emphasis placed on medical care and education, life expectancy is high—72 years for males and 76 years for females—and the literacy rate is 90 percent As a result of a perennial shortage of labor, both skilled and unskilled, Brunei Darussalam has come to depend heavily on expatriate workers drawn largely from neighboring countries, who have the status of temporary residents. Their number is estimated at 44,000 and, including dependents at around 60,000, or equivalent to 20 percent of the total local population.

A. Sectoral Production

While the Sixth NDP targeted an average 6 percent GDP1 growth during 1991–95, actual growth averaged merely 1.5 percent (Appendix Table 58). The main reason for the poor performance was the negative growth of the oil/gas sector2 whose share in total real GDP has been declining. Because of the Government’s oil conservation policy and unfavorable price developments, oil production has increased vary slightly in recent years white production costs of existing fields continued to rise. Meanwhile, the non-oil/gas sector grew strongly, by 5.7 percent on average during 1991–95. As a result, the share of the non-oil/gas sector in GDP increased from 27 percent in 1984 to 37 percent in 1990, and further to 46 percent in 1995. More than half of the growth in the non-oil/gas sector since 1990 came from the Government sector, which grew by 5.7 percent annually during the period. Non-oil/gas private sector has also grown strongly, by 6.0 percent on average. Among the various private economic activities, the tertiary sector played a leading role reflecting rising demand for consumer goods and personal services. Due to large construction projects, the growth of the construction and real estate sectors accelerated in 1994 and 1995. On the other hand, the primary and manufacturing sectors grew only modestly.

1. Oil and gas

Brunei exports mostly crude oil; a refinery with a capacity of 10,000 bpd. supplies the domestic market and produces some surplus for export. Since the beginning of oil and gas exploration, Shell has been the principal active company. To date, it is the only company producing oil and gas in Brunei, although several other companies are exploring. Offshore field production, which has been developed since 1963, now accounts for the bulk of production of both oil and gas Data on the country’s oil reserves are not published, but unofficial estimates made in 1990 suggested that exploitable reserves were about 1,375 million barrels at the time, guaranteeing production at current levels for about 20 years.

After reaching a peak of 250,000 bpd. in 1979, oil production in the early 1980s dropped to about 170,000 bpd., reflecting both a fall in demand and the Government’s conservation policy. Despite the fall in oil prices, the Government stuck with the National Petroleum Depletion Policy it adopted in 1981 and reduced oil production to the targeted level of 150,000 bpd. by 1987 (Appendix Table 10). In the wake of the Middle East crisis in 1990, production levels were pushed higher, and subsequently, the Sixth NDP (1991–95) revealed a shift to a more flexible conservation policy. The new policy permits the oil company to vary its production depending on price, exchange rate, and demand, but limits its annual capital budget to a level consistent with a production target of 150,000 bpd. Consequently, oil production has been fluctuating around 175,000 bpd. in recent years.

Natural gas production began in the 1960s and exports in 1973. Current gas production levels stand at about one billion cubic feet per day. Almost all of Brunei’s gas is liquefied and exported, making Brunei the fourth largest producer of liquefied natural gas (LNG) in the world—after Indonesia, Malaysia, and Algeria. Until exports to Korea commenced in 1994, all of Brunei’s LNG was exported to Japan under a 20-year contract that was renewed in 1994. There is no conservation policy for natural gas, and its production has increased by 18 percent in the last five years. The export of LNG has become almost as important to Brunei’s trade balance as the export of crude oil. Information on gas reserves is also confidential, but unofficial estimates put them at 14 trillion cubic feet in 1992, sufficient for 40 years of production at current levels.

Although Brunei Darussalam is not a member of the Organization of Petroleum Exporting Countries (OPEC), it has benefited considerably from the changes in the world oil trade brought about by OPEC. Generally, the prices Brunei receives for its crude oil and gas have been closely linked to those obtained by OPEC producers. More than 80 percent of Brunei’s oil is exported under one-year renewable contracts at a price that varies monthly based on prices on the world spot market, and the rest is sold on the spot market directly. The contract price for LNG, also denominated in U.S. dollars, is regularly adjusted (every two months) in line with prices on the world spot market for oil.

2. Primary sector

The Government has made significant efforts to promote the primary sector, but with limned success Impediments for the promotion of the primary sector are the high cost of production mainly arising from the shortage of available labor and land, the limited market size, and competition from neighboring countries. Despite the government’s target to attain 15 percent self-sufficiency, rice production continued to decline and fulfilled only 3–5 percent of demand in 1994. Without significant progress in promoting livestock production, the authorities now see more prospects in meat processing instead of livestock production itself On the other hand, largely under the impetus of rising urban demand, production of fruit crops and vegetables continued to increase and the latter now supplies almost half of demand The authorities also made some success in poultry production, which has emerged from the traditional backyard production to modern, large scale commercial enterprises. Still, about 70 percent of poultry consumption is imported. Egg production has been more successful, supplying 97 percent of domestic needs Despite its long tradition of fishing, Brunei has been relying more on fresh fish imports while local fish catch continue to decline The lack of local expertise in control of water quality and fishery management, together with labor shortages, has prevented large-scale commercial operations.

3. Other sectors

Despite the efforts by the authorities, the pattern of non-oil based manufacturing industry in Brunei remains essentially simple and underdeveloped. Most manufacturing industry is small-scale and oriented towards the domestic market. During 1991–95, real GDP by mining, quarrying, and manufacturing (excluding oil/gas) grew at an annual average rate of 2.3 percent. Employment by the manufacturing sector has slightly declined during 1991–93, even as the Government tried to promote manufacturing industry through the provision of basic infrastructural facilities and a range of fiscal incentives. The Industrial Incentives Act provides exemption from income tax and import duties to companies granted pioneer status as well as established companies planning expansion.3 In order to make the application for foreign direct investment easier, the Ministry of Industry and Primary Resources established in 1989 became a one-stop agency to handle every step for foreign direct investment. Besides, since only Brunei citizens can own land, the Government offers would-be foreign investors teases in industrial estates. However, the response from the private sector has not been encouraging, and only the estates in the capital region have attracted significant numbers of enterprises.

Construction is the largest employer as well as the largest component of GDP in the non oil/gas private sector. After modest growth during 1991–93, construction activities accelerated in 1994–95 as the Government increased its capital expenditure to complete the Sixth NDP. In addition, community-oriented projects also were implemented at the same time, including a large amusement park with a resort hotel and golf courses, a big commercial complex in Bandar Seri Begawan, and a marina with a hotel. Employment by the construction sector, mostly immigrant workers, rose by 48 percent during 1990–93.

4. Environmental issues

Environmental policy has been an important feature of the NDPs. Recently, an Inter-Agency Committee on the Environment was established with a full-time Secretariat in order to review and advise on the necessary actions and measures to be implemented by the relevant departments. Since more than three-quarters of the total land area is covered with forests, forestry conservation has been the main focus of environmental policy. In the Fifth NDP, the Government introduced the Forestry Conservation Protection Policy, which has classified the national forests into Conservation Forests, Protection Forests, and Production Forests. The Sixth NDP also identified solid waste and river pollution as major health hazards.

B. Employment, Wages, and Prices

1. Employment and wages

In 1991, a census year for which comprehensive data are available, 55 percent of the work force was employed in the public sector, and 40 percent were temporary residents. Assuming that the number of temporary residents employed in the public sector is negligible, the implication is that some 80 percent of the local work force is employed in the public sector. The implied participation rate for the local population was 40 percent, whereas the local unemployment rate was 7.7 percent (Appendix Table 11). About 40 percent of private sector employment was in construction, and only 8 percent in the oil and gas sector (Appendix Table 12). Temporary residents made up 65 percent of the unskilled laborers but also 38 percent of professionals and 22 percent of the administrative and managerial work force (Appendix Table 13).

With an already high unemployment rate, it is a major challenge to public policy to create employment for the estimated 4,000 addition to the working age population each year, especially as the Government his decided to freeze the number of public sector jobs and in light of the rise in female participation rates (Appendix Tables 14, 15). One response has been an active policy of replacing expatriates by locals. For the government sector, this process of bumiputra (“sons of the land”) or “Bruneization” is practically complete. It is also far advanced for the oil and gas sector and the financial sector, and the government agencies in charge of these sectors are mainly concerned with ensuring that qualified Bruneians are promoted into the professional and managerial ranks. As to the overall share of expatriates in the labor force, the policy enunciated in the Sixth NDP is to reduce it to about one third, from 40 percent at present, although it is accepted that certain sectors, such as construction, will continue to draw their workers mainly from abroad.

The efforts at economic diversification in Brunei are seriously hampered by the high remuneration in the public sector. Public sector salaries remain generous, and public sector workers also receive numerous benefits. The main benefit, enjoyed only by public sector employees hired before 1993, is a noncontributory pension scheme that pays a maximum of 75 percent of the last earned salary (after 30 years of service), with the retirement age set at 54 for women and 55 for men; nonpensionable public servants are covered by a gratuity scheme, also noncontributory, of at least 1/12 of total salary earned. Another important benefit is the rent subsidy that limits the monthly rent to a maximum of B$130, with the size of the house depending on seniority. Other benefits are subsidized housing loans (in demand since the rent subsidy ends upon retirement), subsidized car loans, and a pilgrimage to Mecca (haj) upon completing ten years of service. On the other hand, most private sector enterprises cannot match government remuneration.4 Only Brunei Shell and financial institutions, which have made it a policy to try to increase the number of Bruneians on their staffs, can afford to compete with salaries of the public sector.

In order to make the private sector employment more attractive, the authorities established the Employees Trust Fund (ETF) (Tabung Amanah Pekerja, or TAP) to cover both the public and private sectors. As of January 1993, the TAP became effective for all nonpensionable civil servants and for all newly employed civil servants, replacing for the latter the noncontributory pension scheme. In January 1994, the TAP became effective for all employees in the private sector, with a temporary exemption for those working for an employer with an approved provident fund (i.e., banks and Brunei Shell) The TAP is a simple provident fund without insurance features, making lump sum payments to participants upon reaching 55 years of age, and in a number of other specified circumstances. At present, the contribution rates are 5 percent each for both employees and employers.

2. Prices

Inflation in Brunei has been quite moderate, averaging 2.5 percent per annum from 1981 to 1994 (Appendix Table 16) Given Brunei’s comfortable balance of payments position and open trading regime, any variations in demand pressures arising from fluctuations in the level of economic activity have mostly been reflected in the external sector. Correspondingly, domestic prices have generally tracked movements in import prices closely. In particular, Brunei’s price performance is very much in line with Singapore’s, which recorded an average annual CPI inflation rate of 2.5 percent from 1981 to 1994. Price controls on some basic necessities have also helped contain price increases. Prices of sugar and rice are set by the authorities. There is also a long list of items for which indicative price ceilings have been set by the Ministry of Finance. These items include basic foods, household goods, automobiles, tobacco goods, and liquor. In addition, gas and utilities are also subsidized, as is housing, both rentals and owner−occupied

Significant deviations of price developments in Brunei from those abroad could result from disruptions in imports, price controls, or nontraded goods price inflation. Inflation picked up to 6 percent in 1995, partly owing to significant increases in import duty rates on cigarettes (December 1994), and motor vehicles (February 1995). Although import duties on 688 consumer items were reduced substantially in April 1995, the effects of this measure were not significant because of the relatively low weight of affected items in the CPI basket. The pick up of inflation in 1995 was also exacerbated by mounting demand pressures on nontraded goods, especially services such as private school tuition, car repairs, and domestic services. In recent years, rent in the capital area has also risen sharply.

III. Public Finance

Highly dependent on revalue from the oil and gas sector, the public sector in Brunei provides generous remuneration for public workers while continuing a high level of investment in infrastructure. In response to a continuous decline in oil and gas revenues, the Government has gradually attempted to contain current expenditure. Meanwhile, capital expenditure has accelerated in 1993–95 to complete the Sixth NDP (Table 2, Chart 2) (Appendix Table 17). In the face of weakening of oil/gas prices and in the absence of significant measures, revenues continuously declined and transfers from the General Reserve Fund—which is managed by the Brunei Investment Agency (BIA)—have financed the budgetary shortfalls since 1992, amounting to about 35 percent of total revenue in recent years.

Table 2.Brunei Darussalam: Selected Fiscal Sector Indicators, 1990–95
199019911992199319941995
BudgetEst.
(In millions of Brunei dollars)
Total revenue2,7062,6862,7303,4164,3181,8813,538
Tax1,6051,4591,2861,1371,0929091,118
Non-tax revenue1,1021,2261,4442,2783,2269722,420
Of which: Transfers 1/004051,1422,07201,452
Total expenditure2,7912,7603,0573,3974,2854,4813,649
Current1,9472,0242,2242,3752,3273,0442,358
Capital8437368331,0221,0571,4371,088
Investment in pub. enterprises 2/00009010203
Surplus or deficit (-)−84−74−3281933−2,600−111
(In percent of GDP)
Total revenue41.640.641.651.964.626 650 1
Tax24.722.019.617.316.312.915.8
Non-tax revenue16 918.522.034 648.313.834.2
Of which Transfers 1/0.00.06.217.331.00.020.5
Total expenditure42.941.746.651.664.1.63 451.6
Current29.930.633.936 134.843 133 4
Capital13.011.112715.515.820.3154
Investment in pub enterprises 2/0.00.00.00.013.50.02.9
Surplus or deficit (-)−1.3−1.1−5.00.30.5−36.8−1.6
Memorandum items:(In millions of Brunei dollars)
Ordinary expenditure1,8711,9442,1362,2812,2352,9242,265
Charged expenditure458446460426414448460
Development expenditure4623704616907351,109721
GDP6,5096,6216,5656,5856,6867,0677,067
Sources Ministry of Finance, Brunei Statistical Yearbook (various issues); and staff estimates.

Transfers from Brunei Investment Agency (BIA) to the budget.

BIA investment in the public enterprises through the budget.

Sources Ministry of Finance, Brunei Statistical Yearbook (various issues); and staff estimates.

Transfers from Brunei Investment Agency (BIA) to the budget.

BIA investment in the public enterprises through the budget.

CHART 2BRUNEI DARUSSALAM: Fiscal Indicators, 1990–95

(In percent of GDP)

Sources: Data provided by the Brunei authorities.

1/ Transfers from Brunei Investment Agency (BIA).

2/ Includes BIA investment in public enterprises through the budget.

A. Institutional Structure

The Ministry of Finance is in charge of the budget process, under supervision of a Budget Committee appointed by the Sultan, with specific responsibility for the capital budget relegated to the Economic Planning Unit (EPU). The Government is organized in 12 ministries, one of which is the Office of the Prime Minister, and each ministry comprises a number of operational units called departments, for a total of about 65. Only the central government collects revenues, and lower levels of government are dependent on transfers.

The fiscal year coincides with the calendar year, and the budget cycle commences with the appointment of the Budget Committee early in the year, which usually includes senior government officials, representatives from the public, and members chosen for their technical expertise. It provides the Ministry of Finance with spending limits by ministry for the next fiscal year. The Committee begins to scrutinize the spending plans by departments in June and reaches a final decision on departmental allocations by October. Finally, the budget is submitted to the Sultan for his approval. All payments are made centrally by the Treasury Department of the Ministry of Finance, which ensures that spending remains within the allocations. All spending in excess of allocations must be approved by the Budget Committee.

In addition to the yearly budget cycle there is a five-yearly NDP Plan cycle which covers most of the capital expenditures. Although the design and implementation of NDPs is coordinated and monitored by the EPU, the National Development Committee, chaired by the Minister for Development and including various deputy ministers and the permanent secretaries of all other ministries, makes the final allocation. Even though revenues during the Sixth NDP were far below projections, the projects were executed as planned, with the shortfall in revenues made up by transfers from the General Reserve Fund. In the context of the annual budget cycle, the EPU is given an allocation for disbursements on capital expenditures, but in practice disbursements seldom exceed 70 percent of the allocation.

The Government operates a number of extra-budgetary funds. The largest is the General Reserve Fund, which contains revenues from oil and gas set aside for future generations Information on this fund is not available as the BIA presents its accounts only to the Sultan Since the mid-1980s, the Government ceased recording BlA’s investment income as revenues and started to keep its foreign transactions out of the exchange records Other extra-budgetary funds are: the Government Consolidated Fund, a reserve fund to smooth current expenditures, the Development Fund, a reserve fund to smooth capital expenditures; and the Government Trust Fund (GTF), which finances loans on favorable terms to government employees. All these extra-budgetary funds are managed by the BIA.

B. Revenues

Government revenues are dominated by receipts from the hydrocarbon sector in the form of corporate income tax, royalties, and dividends (Appendix Table 18). Consequently, revenues fluctuate with oil and gas production and prices, and the profitability of the oil and gas industry. Since 1980, tax revenues have exhibited a general decline: from a high of B$3.5 billion in 1981 they went as low as BS1.1 billion in recent years. In the 1990s, despite a temporary recovery in the wake of the Middle East crisis, the U.S. dollar depreciation has exacerbated the revenue situation and tax revenue as a ratio to GDP dropped sharply from 22 percent in 1991 to 14 percent in 1995. While expenditure continues to rise, budget shortfalls have been financed by the large transfers from the General Reserve Fund.

Brunei does not have personal income tax and corporate income tax accounts for the major share of tax revenue—85 percent in 1995.5 The tax has three rates: 55 percent for oil companies; 50 percent for gas companies, and 30 percent for all other companies About a dozen foreign joint-venture companies enjoy 2–5 year tax holidays because they were granted “pioneer status” under the Investment Incentives Act. Of about 4,000 registered companies, 1,500–2,000 file income tax declarations, but only 500 pay taxes. The oil and gas companies pay taxes on a quarterly basis and all other companies annually The share of import duties in tax revenue was 14 percent in 1995, which is likely to decline in coming years as Brunei lowers import-duty rates further, consistent with commitments under various multinational agreements.

Nontax revenue consists of royalty, some commercial receipts, and transfers from the General Reserve Fund. Royalty payments differ for onshore, and offshore fields. For onshore the royalty currently paid by BSP is a flat 12½ percent (in cash or kind) of production, for offshore, it is 10 percent of production between 3 and 10 miles, and 8 percent of production farther offshore. Similar terms apply to natural gas production Since 1986, government investment income accruing to the General Reserve Fund is no longer included in revenue but transfers from the General Reserve Fund have regularly taken place since 1992 to finance budgetary shortfalls. In 1994 and 1995, the transfers also included investments by the BIA in some public enterprises. Even after excluding these investments, the amount of the transfers averaged about 35 percent of total revenue during 1993–95.

New revenue measures were introduced in recent years, but their revenue impact was limited The measures included a 30 percent increase in the price of gasoline in 1992, the introduction of a few co-payments in the medical insurance scheme, and increases in fees and charges for government services. Also, effective December 1994, import-duty rates on cigarettes and alcoholic beverages were raised substantially. In February 1995, a steep increase in the import tariffs cm automobiles took place which raised a uniform rate of 20 percent to a range of 40–200 percent, depending on the size of engines. In April of that year, the Government reduced import duty rates on 688 items, mainly consumer goods. The reduction brought the share of tariff lines in the 0–5 percent range to nearly four-fifth of the total, which goes beyond Brunei’s commitments under the Uruguay Round.

C. Expenditures

1. Budget presentation

The Brunei expenditure statistics distinguish between ordinary, charged, and development expenditures. “Ordinary expenditures” consist mostly of wages and salaries, and pensions and gratuities, for public sector workers. “Charged expenditures” cover other current operational costs, but also certain capital expenditures; in the early 1980s, this category of expenditures rose sharply as a result of public sector construction associated with independence. Finally, the category “development expenditures” contains all capital spending decided in the context of the five-year NDPs. In the following analysis, current and capital expenditures are estimated by splitting the charged expenditures. A consistent functional breakdown of expenditures is not available, although “ordinary expenditures” are published by ministries and for a subset of major departments (Appendix Table 19).

2. Current expenditure

Brunei Darussalam’s budget policy is centered around the principle that all its people should share in the revenues from the exploitation of oil and gas Based on this policy, current expenditure has provided public sector employees with generous remuneration and an elaborate welfare system. The welfare system offers essentially free medical care, with treatment abroad if required; a noncontributory old age pension of B$200 per month for citizens and permanent residents who are 60 years old or older, special allowances in case of disability and poverty; free education up to the university level, abroad where necessary, subsidized housing and staple foods; and financial support in making pilgrimages to Mecca These benefits are generally not available to temporary residents, and for permanent residents they are partly financed privately from the 10 percent of income (zakat) Muslims are expected to give to charity; an important channel in this connection is His Majesty’s Foundation, financed by the Sultan. Apart from welfare-related expenditures, the budget puts emphasis on defense, providing 18 percent of ordinary expenditure in 1994, equivalent to about 6 percent of GDP.

In response to a decline in oil/gas revenues, the Government has gradually shifted to a policy of expenditure restraint but with limited results Current expenditure as a ratio to GDP still remained at 33 percent in 1995 which was almost the same as the average during 1986–94 (34 percent) Several measures target the increase in the public sector payroll: the pay scales have not been adjusted since 1985 and salary increases have been kept below inflation; recently there has been a freeze on the creation of new positions, although existing vacancies continue to be filled; and the Sixth NDP limited the annual increase of the public sector payroll to 5 percent. Furthermore, since 1993 nominal current expenditures other than wages have been frozen. Over time the contributory ETF will be important in restraining expenditures, since it replaced the noncontributory pension scheme for public sector employees hired after 1993.

3. Capital expenditure

During 1986–93, annual capital expenditure averaged 13 percent of GDP, while fluctuating within the range of 10–15 percent. In 1993–95, however, it continuously exceeded 15 percent of GDP as the Government accelerated the implementation of the projects in the Sixth NDP in order to complete them within the Plan period. Apart from capital expenditure, large investments in some public enterprises took place in 1994 and 1995, financed by transfers from the General Reserve Fund. Data on the composition of capital expenditure are not available on an annual basis but are available for the five-year plan periods (Appendix Table 20).

While their principal objective has been to diversify the economic base through the expulsion of agriculture and industry, the NDPs have shifted their emphasis on different spending categories. Under the first three NDPs, expenditures were concentrated in infrastructure, especially roads and telecommunications, and public utilities. Under the Fourth NDP (1980–84), which covered the immediate pre-independence period, the plan shifted the emphasis somewhat to expenditures on public buildings and public security. The Fifth NDP (1986–90), which was the first full plan since independence, officially espoused a full-fledged industrial policy, geared toward import substitution in the short run and export promotion in the long run. Spending on industry and commerce was stepped up, as was spending on utilities in support of private industry. The Sixth NDP (1991–95) essentially continued this industrial policy approach and launched institutional initiatives such as the one-stop agency to expedite investment approvals; the centralization of all regulation and supervision to better support a growing financial sector, the establishment of the Brunei Development Bank (BDB) to expand the financing of small domestic business ventures; and the creation of the ETF to enhance the relative attractiveness of private sector employment.

D. Public Enterprises

There are no majority state-owned enterprises in Brunei Darussalam,6 but since 1985 the Government has held a SO percent share in Brunei Shell Petroleum Company Limited (BSP) and Brunei Shell Marketing. In 1973, the Government first bought a 25 percent share in BSP, which was established in 1957 as a fully owned subsidiary of the Royal Dutch/Shell group. Brunei Shell Marketing was established in 1974 to sell oil and gas products domestically. The Government eventually also raised to 50 percent its initial 10 percent share in three other companies—Brunei LNG, Brunei Coldgas, and Brunei Shell Tankers—formed in 1969 to handle the liquefied natural gas trade with Japan. The remaining equity in these three companies is divided equally between Royal Dutch/Shell and the Mitsubishi Corporation. The Government’s interests in the oil and gas companies are looked after by the Petroleum Unit, a division within the Prime Minister’s Office, which is also the principal regulator of the oil and gas industry. In addition, the Bruneian members of the BSP board and their alternates formed, since 1993, a ministerial committee, called the Brand Oil and Gas Authority, with policy responsibility for major decisions; the Director of the Petroleum Unit serves as secretary to this committee.

IV. Financial Sector

Given the long-standing parity between the Brunei and Singapore dollars, financial and exchange markets in Brand function as extensions of these markets in Singapore. Banks set their interest and exchange rates following Singapore where their excess liquidity is mainly invested. Monetary policy is passive, consistent with Brunei’s currency board framework, and the Brunei Currency Board (BCB) has responsibility over the issue of legal tender. Monetary aggregates are strongly affected by Government and quasi-Government activities, given their dominant role in the economy. Since 1993, broad money has increased strongly as a large amount of money has been brought in from abroad to finance large construction projects (Table 3, Chart 3).

Table 3.Brunei Darussalam: Selected Monetary Sector Indicators. 1990–95
Sept.
199019911992199319941995
(In millions of Brunei dollars)
Brunei Currency Board
External assets395412434431446459
Of which: liquid202236213255155167
Cash at banks496376107104107
Demand liabilities406425460479515530
BCB external asset ratio0.970.970.940.900.870.87
Monetary survey
Foreign assets (net)3,4113,0274,0473,8475,3134,778
Claims on private sector1,2551,8311,9272,4103,2372,466
Money2,3332,2452,4462,4584,3983,293
Of which: Currency outside banks364385418426432457
Quasi-money2,1352,4242,4262,9353,1183,599
(Percent change)
Claims on private sector26.946.05.225.134.3–3.9
Money5.3–3.78.90.578.9–22.9
Of which Currency outside banks3.45.98.62.01.310.2
Quasi-money12.313.50.121.06.324.5
Broad money8.54.54.310.739.4–3.8
Prime lending rate (end of period)7.07.06.05.86.06.5
Source: Data provided by the Brunei authorities.
Source: Data provided by the Brunei authorities.

CHART 3BRUNEI DARUSSALUM: Monetary Indicators, 1990–95 1/

Source: Data provided by the Brunei authorities.

1/ Data for 1995 are for September.

A. Structure of the Financial System

For the small size of its domestic financial market, and given the Government’s large role in extending housing and car loans, Brunei’s financial sector is sizable. The banking system is composed of eight commercial banks; of these, two are locally incorporated In addition, there is a post office savings bank. The three largest banks, all foreign owned, accounted at end-1994 for almost 90 percent of deposits and 75 percent of loans. The share of demand deposits in total deposits is high at 44 percent as of end-September 1995 while the shares of savings deposit and time deposit are 18 percent and 38 percent, respectively. The main depositors in the banking system are the Treasury Department of the Ministry of Finance and the Brunei Shell group of companies. The latter cumulates, on a monthly basis, funds for the quarterly payments of taxes and royalties. Banks also derive substantial income from negotiating and collecting oil export bills on behalf of BSP.

Brunei’s financial sector regulation is very liberal and there are no credit or interest rate restrictions or guidelines. Monetary policy is passive, consistent with the nature of the currency board framework, and the authorities do not utilize any policy instruments to influence monetary’ developments. An important role in interest rate determination is played by the Brunei Bankers’ Association (BBA). The BBA agrees monthly on the prime rate for the coming month, based on the Singapore prime rate for the previous month and market expectations. The prime rate usually constitutes the minimum lending rate; it also functions as an orientation rate to which banks on an individual basis link the rates for different purpose loans with premia depending on risk. The BBA also sets every month maximum rates for savings and time deposits up to B$ 100,000, but not in a fixed relation to the prime rate. When banks seek extra liquidity, they are willing to pay significantly higher rates on large deposits; sporadically, they also may borrow interbank domestically. Demand deposits are unremunerated except for those from the Government, which earn 2.5 percent.

B. Brunei Currency Board

The BCB is a statutory body chaired by the Minister of Finance. It was established in 1967 under the Currency Act, which also introduced the Brunei dollar (or ringgit). The operations of the BCB are limited to the issue and redemption of Brunei currency notes and coins and the investment of its external reserves (Appendix Table 21). To safeguard the value of the domestic currency, the BCB is required by statute not to let its external assets drop below 70 percent of its demand liabilities, or its liquid external assets below 30 percent of the same. Although both ratios have traditionally been well above their legal minima, valuation losses reportedly have contributed to the decline in the external asset ratio from 0.97 in 1990 to 0.87 in September 1995. The BCB sells Brunei dollars only in exchange for Singapore dollars, at par. It does not act as lender of last resort to banks and it does not lend to Government. Consistent with this policy, the BCB had not maintained accounts for banks or the Government until December 199S when a minimum cash balance requirement on all banks and finance companies was introduced. The BCB maintains accounts in three domestic banks, which are used for the settlement of currency transactions.

Since 1967, the BCB has had an agreement with the Board of Commissioners of Currency of Singapore (BCCS) that ensures the free interchangeability of the two countries’ currencies in the interest of facilitating trade and investment. Under this currency interchangeability agreement, the two currencies are “customary tender” in the country in which they are not legal tender, allowing them to circulate side-by-side. The BCB and BCCS are committed to exchange, at par and without charge, each other’s currency when offered by banks, and have requested from their banks that they do the same for their customers Periodically, excess notes and coins are returned to the institution of issue, which pays for them in the other currency and also reimburses the costs of the repatriation. Because of Brunei’s large bilateral deficit in trade and services with Singapore, in practice, repatriation is almost solely from Singapore to Brunei.

C. Monetary Developments

Given their dominant size in the economy, monetary aggregates have been strongly affected by the Government and quasi-Government activities. Broad money has increased strongly since 1993 reflecting a large amount of money brought in from abroad to finance large projects. As a result, broad money has increased by more than 40 percent between end−1992 and end−September 1995 (Appendix Table 22). The broad money growth had been lumpy and was especially Ugh in 1994, as a sizable sum of money was reportedly brought into the country late during that year for some large financial settlements. Closely following those in Singapore, interest rates continued to rise in 1994 and the first quarter of 1995, but appear to have since softened somewhat.

Despite the large amount of liquidity originated from the oil/gas revenue, investment opportunities in the domestic market are limited and, as a result, the banking system has had excess liquidity which is mainly invested in the Singapore market. Domestic bank loans are heavily concentrated in personal loans amounting to almost half of total loans (Appendix Table 23). Moreover, the share of personal loans becomes more dominant if loans to the credit and finance sector (which are mainly for car financing companies) are also included. Other major direction of lending is construction and commerce sectors, providing working capital or stock financing. Reflecting active construction activities and the associated rise in consumption demand, credit to the private sector increased by 28 percent between end-1992 and end-September 1995.

D. Nonbank Financial Institutions

The principal nonbank financial institutions are in the public sector: the BIA, the ETF, the BDB, and the GTF The BIA was established in 1983 for holding and managing the Government Reserve Fund and all the Government’s external assets. The ETF, which covers new employees in the public sector since 1993 and all private sector employees since 1994, so far has assets of less than B$100 million, which are placed with the BIA. With a contribution rate of 10 percent of wages, it should grow to become a sizable fund. The BDB, founded in April 1995, has taken over from the Economic Development Board its subsidized lending activities in the interest of economic diversification The GTF provides subsidized housing and car loans to public sector employees Private sector nonbank financial institutions comprise a number of finance companies, securities brokers, insurance companies, money lenders, cooperative societies, and pawn shops. There are also a number of money transfer services catering to the large expatriate work force.

E. Prudential Policy

Brunei experienced several financial failures in the 1980s and fiscal policy has always brought relief: in 1985, the United National Finance Company; in 1986, the National Bank of Brunei, the second largest local bank; and in 1988, Jan Shen, a commodity trading firm. In all cases the Government was heavily involved in the liquidation, the recovery of assets, and the repayment of depositors (including in one case a budgetary transfer). Trying to develop Brunei as a regional financial center, the authorities are aware of the need to develop prudential policy and to strengthen their capacity for bank supervision. In 1993, the Financial Institutions Division of the Ministry of Finance became solely responsible for all licensing, regulation, and supervision of financial institutions. Commercial banks regularly report their balance sheets including the amount of past due loans. The ratio of past due loans (more than sixty days) has shown a decline recently from about 9 percent in 1991 to about 5–6 percent in 1995. For prudential reasons, effective December 1995, a minimum cash balance requirement of 6 percent on all bank and finance companies was introduced.

V. External Sector

Sizable hydrocarbon exports and the steady accumulation of long-term foreign assets over many years have provided Brunei with a comfortable external payments position, facilitating the maintenance of a liberal exchange and trade system. In recent years, however, both trade and current account balances deteriorated steadily (in terms of GDP) as imports rose sharply while exports remained stagnant (Table 4, Chart 4). Japan is the major export market, while the increase in imports, which has been fueled by increased Government expenditure, largely came from ASEAN countries, mainly Singapore.

Table 4.Brunei Darussalam: External Sector indicators, 1990–95
Est
199019911992199319941995
(In millions of U.S. dollars)
Trade balance1,2641,4151,2561,100653704
Exports (f.o.b.)2,2122,4702,3722,2802,2152,746
Imports (f.o.b)9481,0551,1151,1811,5622,042
Services, net−282−311−402−160−119−302
Receipts3063119745379
Payments312374521234171381
Investment income, net 1/1,9171,9391,8821,7382,4712,569
Receipts2,1132,2152,0941,9272,6222,810
Payments195276211188151241
Current transfers, net−176−99−60−88−6−104
Receipts15611118
Payments19110571897112
Current account balance2,7242,9442,6762,5902,9992,867
Capital account balance−2,706−2,918−2,666−2,586−2,962−2,849
Overall balance18261143718
Imports (percent grown)16.511.25.75.932.330.8
(In percent of GDP)
Exports61.664.558.856.050.655.1
Imports26.427.527.729.035.741.0
Investment income, net 1/53.450.646.742.756.451.5
Current account balance75.976.866.463.668.557.5
(In millions of US dollars)
Value of major exports
Petroleum (crude and products)1,2501,2911,3251,1811,0841,114
Natural gas8861,098959985925
Interntional reserves 2/2,2742,1342,5732,4794,3964,008
Official reserves5455313773551,065967
BCB227253264268305323
Consolidated Fund319278113759644
Commercial banks1,7291,6032,1962,1243,3323,040
(In months of imports of goods and services)
International reserves 2/
Official reserves5.24.52.83.07 44 8
Total reserves21.717.918 921.030 719 8
Exchange rates
Brunei dollar per U.S. dollar (period average)1.811.731.631.621.531 42
Nominal effective 3/115.5119 4121.0121.3124 7126 8
Real effective 3/105.0106.7108.8108.8113.6118 7
Source: Data provided by me Brunei authorities; and staff estimates

Investment income is based on staff estimates.

Data for 1995 are for September.

End period 1980=100 Data for 1995 are for September.

Source: Data provided by me Brunei authorities; and staff estimates

Investment income is based on staff estimates.

Data for 1995 are for September.

End period 1980=100 Data for 1995 are for September.

CHART 4BRUNEI DARUSSALUM: External Sector Indicators, 1984–95

Source: Data provided by the Brunei authorities, staff estimates

A. Balance of Payments

Brunei Darussalam does not compile comprehensive balance of payments statistics, although trade and otter key data are available. The staff compiled tentative balance of payments estimates for the period 1985–95, relying on the exchange record of the resident commercial banks, the foreign banking transactions of the Brunei Shell group, the balance sheet of the BCB, and the trade statistics derived by the EPU from customs data. Hydrocarbon exports, merchandise imports, and investment income dominate the external current account (Appendix Table 24). Based on a number of assumptions, it appears that the current account stayed in substantial surplus throughout this period.7 With reduced earnings from petroleum and the weakening of the U.S. dollar (in which hydrocarbon exports and presumably most investment earnings are denominated), the surplus fell in relation to GDP from 90 percent in 1985 to about 58 percent in 1995.

1. Merchandise exports

Exports consist almost totally of hydrocarbons, with revenues from LNG since 1986 close to those from the export of oil (Appendix Table 25). The excess capacity of the domestic refinery permits the exportation of small amounts of petroleum products. Although its share in total exports is still minimal at around 6 percent in 1994, the export of nonhydrocarbons increased by 60 percent during 1990-94, led by re-exports (mainly to Sarawak and Sabah in eastern Malaysia) as well as garment exports which began recently, taking advantage of the fret that Brunei does not have any quota under the Multifibre Arrangement. The value of manufactured goods8 increased from B$108 million in 1990 to B$205 million in 1994.

A conservation policy stabilized the volume of oil exports and the long-term contract with Japan has ensured a steady export of LNG (Appendix Table 26). The year-to-year changes in the value of hydrocarbon exports are therefore mainly the result of price fluctuations in the world oil market. After a gradual but continuous decline during 1991-94, exports increased by 24 percent in 1995, recovering to the highest level since 1985 (in U.S. dollar terms). The strong recovery was mainly due to an increase in oil and gas prices as well as an increase in gas export to Korea which started in 1994. The average export price of oil increased by 7 percent and that of natural gas by more than 14 percent in 1995. While the oil export volume remained unchanged since 1992, that of natural gas is estimated to have increased by 14 percent in 1995. Regarding the destination of exports, Japan still has a dominant share (59 percent of total exports in 1995) while Korea increased its share as it started to import LNG in 1994 (Appendix Table 27) Imports from ASEAN have risen sharply in recent years, although the share of exports to ASEAN remained unchanged at 20 percent.

2. Merchandise imports

Brunei Darussalam imports almost everything, including most foodstuffs and beverages (Appendix Table 28) In value terms, machinery and transportation equipment account for the highest share, ranging between 30 percent and 40 percent of all imports, reflecting the high levels of motorization and construction activity in Brunei Manufactured goods, such as consumer electronics and electrical appliances, come next with some 20-25 percent of imports, followed by food (including live animals) and other manufactures, such as textiles The share of foodstuffs and beverages is shrinking and that of manufactured items is expanding.

The ratio of merchandise imports to GDP has increased rapidly from 29 percent in 1991 to 41 percent in 1995. The surge in imports took place in 1994 and 1995, as their share in GDP increased by 6.7 percentage points and 5.3 percentage points, respectively In US dollar terms, imports more than doubled from 1991 to 1995 and the rates of increase in 1994 and 1995 were 32 percent and 31 percent, respectively Although information on the composition of imports is limited, it appears that the increase came from both machinery and equipment for industrial use, especially for construction, and miscellaneous consumer goods including consumer electronics and clothing Looking at the origin of imports, most of the increase came from ASEAN countries, raising their share in total imports from 36 percent in 1991 to 49 percent in 1995 (Appendix Table 29). During this period, 46 percent of the increase in imports came from Singapore and 20 percent from Malaysia.

3. Other current account transactions

Estimated investment income has been rising as the persistent current account surpluses boosted Brunei’s net foreign investment position. Thus, the steady growth of imports were easily financed, even though investment income may have fluctuated substantially from year to year depending on financial market performance. Small net outflows on account of services and current transfers occurred each year. There were growing payments for foreign travel and occasionally high consulting, management, and other professional fees by the oil and gas sector. Current transfer outflows mainly consist of remittances by immigrant workers from neighboring Asian countries The decline in private transfer outflows in recent years calls for the review of the source data used for estimating the balance of payments, because it does not appear to be consistent with the sharp increase in immigrant workers. Private remittances are reportedly no longer captured by the exchange record of commercial banks because immigrant workers are using money transfer services by nonbank financial institutions Similarly, it appears that the shift to nonbank money transfer services is affecting the service account through the under recording of travel payments and receipts.

4. Capital account transactions

In the absence of capital restrictions and attractive investment opportunities at home, a steady net outflow had been recorded of portfolio and direct investment, except for large investment inflows in 1992-94. The recorded inflows, however, are dwarfed by the long-term capital outflows which were derived as a residual in the balance of payments compilation, combining direct placements and reinvested earnings. Short-term capital (the sum of recorded transactions through the domestic banking system and by the Brunei Shell group plus estimated export trade credits) provided net financing in most years; short-term outflows occurred in 1987 and 1991. In placing their structural access liquidity abroad, commercial banks in Brunei contributed importantly to both outward portfolio investment and short-term lending in most years.

5. International reserves and foreign investment position

The international reserves position of Brunei Darussalam is very comfortable. At the end of September 1995, international reserves amounted to US$4.0 billion, or 20 months of imports of goods and services, with most reserves held by the commercial banks (Appendix Table 30). Of the international reserves, the external assets of the BCB and the commercial banks are immediately available reserves. The remainder is the Government’s Consolidated Fund which could be mobilized if necessary for balance of payments financing. The staff considers as official reserves the BCB’s external assets and the Consolidated Fund. The BCB’s external assets have been increasing steadily with currency circulation. At the end of September 1995, total official reserves (there are no official reserve liabilities) were US$967 million, or five months of imports of goods and services Commercial banks have invested their international reserves mostly with affiliated banks in Singapore; at the end of September 1995, those investments amounted to almost US$3.0 billion.

B. Exchange Rate and Trade System9

Through the currency board arrangement and the currency interchangeability agreement, the Brunei dollar is pegged at par to the Singapore dollar. The BCB’s only intervention currency is the Singapore dollar. The BCB does not prescribe exchange rates for currencies other than the Singapore dollar and in practice the Brunei exchange market functions as an extension of the Singapore market. In the absence of governmental regulation or prescription of exchange rates or exchange rate margins, the commercial banks are free to act the exchange rates for currencies other than the Singapore dollar in their dealings with the general public. In the 1990s, both nominal and real effective exchange rates have appreciated by more than 10 percent (Chart 5, Appendix Table 31).

With the removal of exchange controls in 1984, the Brunei dollar became fully convertible. Because of the absence of controls there is no requirement to collect, repatriate, or surrender foreign exchange proceeds from exports. Financing terms may be freely agreed between residents and nonresidents. Also, banks in Brunei are not limited by regulation in their foreign exchange exposure. The possibility of accepting deposits denominated in foreign currency, presently amounting to about one fifth of total liabilities, offers banks a way by which to reduce their foreign exchange exposure.

The trade system is also very liberal. There are no restrictions on the destination and origin or provenance of merchandise trade. On the export side, there are neither bans nor taxes Licenses are required for alcoholic beverages, cigarettes, petroleum products, rice, salt, and sugar; in the case of the latter four because they are subsidized. On the import side, a few bans or restrictions exist but these are not for protective or balance of payments reasons, and restricted items may be imported with the permission of the ministry concerned. Since January 1992, Brunei Darussalam has been applying the Harmonized Description and Coding System of the Customs Cooperation Council.

CHART 5BRUNEI DARUSSALAM: Exchange Rate Indices, 1984–95

(1980=100)

Source: IMF International Financial Statistics; and staff estimates.

Appendix Tables

Table 5.Brunei Darussalam: Gross Domestic Product in Current Prices by Economic Activity, 1984–95(In million of Brunei dollars)
Est.
198419851986198719881989199019911992199319941995
Total8,0697,7525,1365,8015,4155,8456,5096,6216,5656,5856,6867,067
Oil and gas sector6,2765,8973,0633,5672,8843,0343,4913,3352,9842,7532,5412,535
Non-oil and gas sector1,7931,8552,0732,2342,5312,8113,0183,2863,5823,8324,1454,532
Government8649401,1101,1511,3171,3751,4371,6561,7541,8451,9172,191
Private sector9299169631,0831,2131,4361,5811,6301,8281,9872,2282,341
Agriculture and hunting6069718091103117119122125128132
Forestry and logging131516181322141516171820
Fishing121312141619232628323336
Mining, quarrying, and
manufacturing5751120123138157177195204208213221
Electricity production153131334354596264677074
Construction207159170183196255277303316334364405
Wholesale trade10084719092116122128137142152163
Retail trade141122156180208240257273285296307325
Restaurants and hotels4242404652596873788696108
Transportation, storage, and
communication116136123150171196214235252265278299
Banking and finance134144155170186204223236241254274298
Insurance81114213146677074778290
Real estate and business services11310258606263656770737681
Ownership of dwellings301133384349556669737680
Community, social, and
personal services8569161,0901,1271,2931,3491,4211,5681,7831,9482,1532,390
less Bank charges113778798103121142149157164176188
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Table 6.Brunei Darussalam: Composition of Gross Domestic Product in Current Prices, 1984–95(In percent of total GDP)
Est.
198419851986198719881989199019911992199319941995
Total100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0
Oil and gas sector77.876.159.661.553.351.953.650.445.441.838.035.9
Non-oil and gas sector22.223.940.438.546.748.146.449.654.658.262.064.1
Government10.712.121.619.824.323.522.125.026.728.028.731.0
Private sector11.511.818.718.722.424.624.324.627.830.233.333.1
Agriculture and hunting0.70.91.41.41.71.81.81.81.91.91.91.9
Forestry and logging0.20.20.30.30.20.40.20.20.20.30.30.3
Fishing0.20.20.20.20.30.30.40.40.40.50.50.5
Mining, quarrying, and
manufacturing0.70.72.32.12.52.72.72.93.13.23.23.1
Electricity production0.20.40.60.60.80.90.90.91.01.01.01.0
Construction2.62.13.33.23.64.44.34.64.85.15.55.7
Wholesale trade1.21.11.41.61.72.01.91.92.12.22.32.3
Retail trade1.81.63.03.13.84.14.04.14.34.54.64.6
Restaurants and hotels0.50.50.80.81.01.01.01.11.21.31.41.5
Transportation, storage, and
communication1.41.82.42.63.23.43.33.63.84.04.24.2
Banking and finance1.71.93.02.93.43.53.43.63.73.94.14.2
Insurance0.10.20.30.40.60.81.01.11.11.21.21.3
Real estate and business services1.41.31.11.01.11.11.01.01.11.11.11.1
Ownership of dwellings0.40.40.60.60.80.80.81.01.01.11.11.1
Community, social, and
personal services10.611.821.219.423.923.121.823.727.229.632.233.8
Less Rank charges1.41.01.71.71.92.12.22.32.42.52.62.7
Source: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Source: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Table 7.Brunei Darussalam: Gross Domestic Product in Constant Prices by Economic Activity, 1984–95(In millions of Brunei dollars)
Est.
198419851986198719881989199019911992199319941995
Total3,5891,5353,4403,5083,5473,5093,6053,7513,7093,7283,7953,871
Oil and gas sector2,6282,5742,3922,4142,3462,2192,2682,3382,2042,1512,1302,106
Non-oil and gas sector9619621,0481,0941,2011,2901,3371,4131,5051,5771,6661,765
Government494525609624705727743843882890902975
Private sector467437439471496563594570623687763791
Agriculture and hunting292933353740434343444444
Forestry and logging788859555566
Fishing666678899101011
Mining, quarrying, and
manufacturing302555525457616363646668
Electricity production91717182329313132323334
Construction957380808199102105106109115125
Wholesale trade583241494756565657575962
Retail trade82719098106116117118119119120123
Restaurants and hotels171720232527303234364044
Transportation, storage, and
communication6574576671788485909499107
Banking and finance88867075808692929498104111
Insurance58791319282829303134
Real estate and business services746126262727272727282930
Ownership of dwellings171818191920212122222425
Community, social, and
personal services4865115956066837047217928729339971,063
less Rank charges1067374757782879398104111120
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Table 8.Brunei Darussalam: Growth in Gross Domestic Product in Constant Prices, 1984–95(Percentage change)
198419851986198719881989199019911992199319941995
Est.
Total0.6−1.5−2.72.01.1−1.12.74.0−1.10.51.82.0
Oil and gas sector−2.9−2.1−710.9−2.8−5.42.23.1−5.7−2.4−1.0−1.1
Non-oil and gas sector11.70.18.94.49.87.43.75.76.54.85.66.0
Government49.26.216.12.413.13.02.313.44.60.91.48.0
Private sector−11.7−6.40.37.35.313.65.5−4.09.310.311.03.6
Agriculture and hunting5.81.013.05.76.97.07.50.20.50.50.70.9
Forestry and logging6.011.3−3.83.9−31.657.4−40.02.01.91.91.91.8
Fishing−15.47.34.810.99.811.912.04.86.86.41.07.9
Mining, quarrying, and
manufacturing−17.7−182120.2−5.13.95.27.13.51.01.32.23.7
Electricity production−5.497.7−2.96.527.224.57.71.03.50.31.63.1
Construction−22.9−23.19.10.60.622.63.32.51.22.76.18.1
Wholesale trade40.2−44.729.118.6−4.319.6−0.70.51.60.93.33.9
Retail trade−12.1−13.927.18.68.49.31.50.90.40.30.72.5
Restaurants and hotels−17.5−1.821.610.810.210.111.05.35.38.09.910.3
Transportation, storage, and
communication−19.213.0−23.216.87.99.57.81.45.44.06.27.2
Banking and finance9.9−2.2−18.56.96.87.07.00.12.94.06.17.0
Insurance−28.445.3−15.643.144.143.343.21.53.92.15.77.3
Real estate and business services2.6−17.3−56.80.40.40.40.40.42.22.23.24.2
Ownership of dwellings4.22.32.33.33.22.63.51.53.43.75.85.9
Community, social and
personal services45.55.216.61.812.73.02.49.910.16.96.96.6
Less Bank charges11.8−31.71.81.91.96.56.67.05.45.87.07.5
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues).
Table 9.Brunei Darussalam: Trends in GDP and GNP, 1984–95 1/
198419851986198719881989199019911992199319941995
Est.
(In current prices; B$ mn.)
GDP8,0697,7525,1365,8015,4155,8456,5096,6216,5656,5856,6867,067
Net factor payments1,7592,2662,4012,7603,1823,2633,4633,3403,0562,7993,7643.631
GNP9,82810,0197,5378,5618,5979,1089,9729,9619,6229,38410,45010,698
(In current prices; percentage growth)
GDP−0.7−3.9−33.813.0−6.77.911.41.7−0.80.31.55.7
GNP11.71.9−24.813.60.45.99.5−0.1−3.4−2.511.42.4
(In prices of 1974; B$ mn.)
GDP3,5893,5153,4403,5083,5473,5093,6053,7513,7093,7283,7953,871
GNP4,5324,7104,6534,8605,0575,0065,1395,1874,9944,8805,3085,286
(In prices of 1974; percentage change)
GDP0.6−1.5−2.72.01.1−1.12.74.0−1.10.51.82.0
GNP15.23.9−1.24.44.1−1.02.70.9−3.7−2.38.8−0.4
(In current prices; US$ mn.) 2/
GDP3,7833,5212,3592,7542,6912,9973,5913,8324,0304,0754,3784,985
GNP4,6074,5543,4614,0654,2724,6705,5025,7665,9065,8086,8427,547
(Per capita; US$) 2/
GDP17,89316,15510,47311,85211,24412,16814,17114,71215,04914,75015,387
GNP21,79420,87815,37017,49117,55218,96121,71122,13522,05521,02024,048
Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues); and staff estimates.

GNP was calculated on the basis of net factor payments estimated by the staff.

Converted at current exchange rates.

Sources: Ministry of Finance, Fifth and Sixth National Development Plans, and Statistical Yearbook (various issues); and staff estimates.

GNP was calculated on the basis of net factor payments estimated by the staff.

Converted at current exchange rates.

Table 10.Brunei Darussalsm: Oil and Gas Production and Sales, 1984–95
198419851986198719881989199019911992199319941995
Oil Production(Thousands of cubic meters per day)
Crude petroleum252424222121212326252625
Casing head petroleum spirit333333333333
Total272726252424242629282828
(Thousands of barrels per day)
Crude petroleum155149149119133132134147165157161157
Casing head petroleum spirit171916161718181717181818
Total172690165155150150152165182175178175
Number of wells721690511607564558724720737735741740
(Millions of cubic feet per day)
Gas Production8848698418858718859169409539659931079
Exports
Volumes
Oil (thousands of hands per day)167164158151147146147162176170174167
Gas (millions of BTU per year)275265264270277276276275276286283323
Average prices received
Crude oil (U S dollars/barrel)29.727.514.518.415.218.323.520.720.718.817.118.3
Gas (US dollars/million BTU)4.94.81.03.13.13.63.83.53.33.13.03.4
Sources: Ministry of Finance, Statistical Yearbook, 1994, and Sixth National Development Plan; export data from Petroleum Unit of the Prime Minister’s Department.

Estimate by Petroleum Unit.

Average price for January to October 1995.

Sources: Ministry of Finance, Statistical Yearbook, 1994, and Sixth National Development Plan; export data from Petroleum Unit of the Prime Minister’s Department.

Estimate by Petroleum Unit.

Average price for January to October 1995.

Table 11.Brunei Darussalam: Labor Force and Employment 1971,1981 and 1991 1/
197119811991197119811991
(In percent)
Population136,256192,832260,482100.0100.0100.0
Males72,772102,942137,61653.453.452.8
Females63,48489,890122,86646.646.647.2
Employed40,01268,128106,746100.0100.0100.0
Males33,56252,73772,33883.977.467.8
Females6,43015,39134,40816.122.632.2
Unemployed1,0872,5625,209100.0100.0100.0
Males6491,1222,74559.743.852.7
Females4381,4402,46440.356.247.3
Total labor force41,09970,690111,955100.0100.0100.0
Males34,21153,85975,08383.276.267.1
Females6,88816,83136,87216.823.832.9
Total employed106,746100.0
Citizens54,59551.1
Permanent residents7,3446.9
Temporary residents43,99341.2
Excluding temporary residents
Unemployment rate7.7
Participation rate39.8
Employment
All sectors40,01268,128106,746100.0100.0100.0
Males33,56252,73772,33883.977.467.8
Females6,45015,39134,40816.122.632.2
Private sector24,43336,40248,99861.153.445.9
Males20,13028,49233,15350.341.831.1
Females4,3037,91015,84510.811.614.8
Public sector15,57931,72657,74838.946.654.1
Males13,43224,24539,18533.635.636.7
Females2,1477,48118,5635.411.017.4
Sources: Ministry of Finance, Statistical Yearbook (various issues); and staff estimates.

Data for census years 1971, 1981, and 1991.

Sources: Ministry of Finance, Statistical Yearbook (various issues); and staff estimates.

Data for census years 1971, 1981, and 1991.

Table 12.Brunei Darussalam: Private Sector Employment by Major Industry, 1984–93
1984198519861987198819891990199119921993
(In persons)
Agriculture, forestry, and fishing6526106647809231,0771,0911,1881,3131,379
Production of oil and natural gas5,4345,1284,6904,1764,0934,1504,1704,2574,2364,193
Sawmiling and timber processing1,052772690656816891702587683716
Other mining, quarrying, and manufacturing2,3162,4272,1592,9243,6814,6565,5805,2446,2945,161
Construction11,81810,9359,24711,12616,65319,94020.71821,53825,73830,560
Wholesale and retail trading3,8833,9364,26!4,9836,2246,7186,9167,4358,6688,850
Coffee shops, restaurants, and hotels1,9442,0882,1232,1922,5422,7643,1132,8143,5803,843
Transport, storage, and communication2,2961,5211,3601,5592,8902,4603,9353,8534,0264,136
Financial, insurance, and business services1,8312,0752,0222,0942,2872,8322,9552,9743,2523,453
Community, social, and personal services3,1213,0272,7573,2373,7614,4914,4334,5305,3285,699
Total private sector employment34,34732,51929,97333,72743,87049,97953,61354,42063,11867,990
(In percent of total)
Agriculture, forestry, and fishing1.91.92.22.32.12.22.02.22.12.0
Production of oil and natural gas15.815.815.612.49.38.37.87.86.76.2
Sawmilling and timber processing3.12.42.31.91.91.81.31.11.11.1
Other mining, quarrying, and manufacturing6.77.57.28.78.49.310.49.610.07.6
Construction34.433.630.933.038.039.938.639.640.844.9
Wholesale and retail trading11.312.114.214.814.213.412.913.713.713.0
Coffee shops, restaurants, and hotels5.76.47.16.55.85.55.85.25.75.7
Transport, storage, and communication6.74.74.54.66.64.97.37.16.46.1
Financial, insurance, and business services5.36.46.76.25.25.75.55.55.25.1
Community, social, and personal services9.19.39.29.68.69.08.38.38.48.4
(Percent change)
Total private sector employment2.9−5.3−7.812.530.113.97.31.516.07.7
Source: Ministry of Finance, Brunei Statistical Yearbook (various issues).
Source: Ministry of Finance, Brunei Statistical Yearbook (various issues).
Table 13.Brunei Darussalam: Employment Composition, 1991
BruneiPermanentTemporary
TotalMalesFemalesTotalMalesFemalesMalayChinesecitizensresidentsresidents
(In percent of total employment)
Workers not classifiable by occupation7,0556,7812746.69.40.87.10.97.80.36.2
Legislators, administrators and managers4,6643,8687964.45.32.34.29.75.210.42.3
Professionals7,3344,8662,4686.96.77.27.26.87.74.26.3
Technicians and associate professionals13,1848,2594,92512.411.414.317.29.518.68.65.4
Clerical workers12,6354,5678,06811.86.323.417.311.718.714.83.1
Service workers and shop, market, and
related sales workers134308415501512.611.614.613.016.713.618.110.4
Agricultural and fishery workers135211901621.31.60.51.31.41.33.40.9
Production craftsperson and related workers1607414768130615.120.43.87.430.07.318.823.8
Plant and machine operators and assemblers775473963587.310.21.07.07.06.58.77.9
Cleaners, laborers and related workers23264122281103621.816.932.118.36.213.212.733.8
All occupations1067467233834408100.0100.0100.0100.0100.0100.0100.0100.0
100.067.832.250.618.651.16.941.2
Source: Ministry of Finance, Brunei Statistical Yearbook 1994.
Source: Ministry of Finance, Brunei Statistical Yearbook 1994.
Table 14.Brunei Darussalam: Population Indicators, I971–94 1/
Annual average rates or
1971197519801981198519901991199219931994annual averages
CensusCensusCensus1971–811981–911971–91
(In persons)
Male72,77283,27198,860102,942115,900134,000137,616141,300145,800150,0003.52.93.2
Female63,49472,90986,36089,890102,200119,400122,866126,500130,500134,5003.53.23.4
Total population136,256156,180185,220192,832218,100253,400260,482267,8002763,00284,5003.53.13.3
Annual population growth5,9965,2406,2107,6126,7007,1007,0827,3188,5008,2005,6886,8426,201
-natural increase4,3804,4135,0355.2275,8886,2416,2546,4036,2966,3634,6545,8485,252
-immigration (-)1,6168,271,1752,3858128598289152,2041,8371,034994949
Live-births5,1815,1415,7775,87116,6827,0117,1067,2907,3147,2703,3716,6145,998
Total deaths8017287426517947708528871,018907717766746
of which infants1991401018076527970826113266100
(In percent of total population)
Crude birth rate38.032.931.230.530.627.727.327.226.625.733.229.431.3
Crude death rate5.94.74.03.43.63.03.33.33.73.24.53.44.0
Natural rate of increase32.128.327.227.127.024.624.023.922.922.628.726.027.4
(In percent of infant live births)
Infant mortality rate38.427.217.513.611.47.411.19.611.28.425.010.217.7
(Percentage change from previous year)
Population growth rate4.63.53.54.13.22.92.82.83.23.0
Source: Ministry of Finance, Brunei Statistical Yearbooks (various issues).

The years 1971, 1981, and 1991 were census years, for the other years, the numbers are estimates.

Source: Ministry of Finance, Brunei Statistical Yearbooks (various issues).

The years 1971, 1981, and 1991 were census years, for the other years, the numbers are estimates.

Table 15.Brunei Darussalam: Government Sector Employment by Grade, 1984–94
19841985198619871988198919901991199219931994
(In persons)
Division I: Heads of departments179210277332359386381397425434453
Division II: Senior officers1,2951,5331,7262,1012,3152,5332,3892,6643,1013,3373,710
Division III: Supervisory5,3355,8666,4336,5676,8967,3017,3317,3137,6998,0368,116
Division IV: Clerical and operators6,7407,2407,8188,4718,8489,2859,5889,81510,34810,52810,848
Division V: Clerical and operators8,3779,38810,27811,01211,88312,77813,44813,18513,76814,20514,236
Total government employment21,92624,23726,53228,48330,30132,28333,13733,37435,34136,54037,363
(In percent of total)
Division 1: Heads of departments0.80.91.01.21.21.21.11.21.21.21.2
Division II: Senior officers5.96.36.57.47.67.87.28.08.89.19.9
Division III Supervisory24.324.224.223.122.822.622.121.921.822.021.7
Division IV: Clerical and operators30.729.929.529.729.228.828.929.429.328.829.0
Division V: Clerical and operators38.238.738.738.739.239.640.639.539.038.938.1
(Percent change)
Total government employment7.110.59.57.46.46.52.60.75.93.42.3
Source: Ministry of Finance, Brunei Statistical Yearbook 1994.
Source: Ministry of Finance, Brunei Statistical Yearbook 1994.
Table 16.Brunei Darussalam: Consumer Price Index, 1984–95(Period average and percent change; 1990=100)
AllClothing andTransportation and
commoditiesFoodfootwearHousingcommunicationMiscellaneous
198490.63.195.13.186.92.086.63.686.35.287.00.7
198592.72.396.11.088.31.692.87.387.91.890.03.4
198694.31.896.60.690.12.195.12.490.73.292.83.1
198795.51.397.61.091.71.895.80.793.63.293.20.4
198896.61.299.21.793.62.096.10.393.80.294.51.4
198997.91.3100.41.296.73.397.21.294.50.795.81.4
1990100.02.1100.0−0.4100.03.4100.02.9100.05.8100.04.4
1991101.61.6102.52.5101.11.1100.90.9101.41.4100.80.8
1992102.91.3103.30.8104.13.0100.7−0.2103.42.0103.22.4
1993107.34.3106.02.6113.18.6106.05.3108.75.1107.74.4
1994109.92.4107.31.3116.32.8109.02.8113.84.7109.92.0
1995116.56.0110.12.6122.755.11132.1129.814.1118.88.2
1994
Q1108.11.2106.71.1114.32.6107.41.8109.00.4108.51.2
Q2109.42.1106.60.8115.92.6108.22.1114.35.1108.61.0
Q3110.42.7107.71.4116.92.6109.02.7115.76.4109.31.3
Q4111.93.8108.31.6118.03.3111.44.7116.36.9113.04.7
1995
Q1113.75.2109.42.5121.26.1112.04.3117.27.5118.89.5
Q2117.27.2110.03.2122.75.9111.32.9133.717.0118.89.4
Q3117.26.2110.22.4122.95.1110.31.2134.115.9118.68.6
Q4117.85.3110.92.3123.95.0111.3−0.1134.415.6119.05.3
Memorandum:
Weights (percentage)100.038.76.418.619.916.3
Sources: Ministry of Finance, Brunei Statistical Yearbook (various issues); and Economic Planning Unit.
Sources: Ministry of Finance, Brunei Statistical Yearbook (various issues); and Economic Planning Unit.
Table 17.Brunei Darussalam: Summary Budget, 1984–95
198119851986198719881989199019911992199319941995
BudgetEst.
(In millions of Brunei dollars)
Total revenue7,1457,5333,1122,7502,4872,5262,7062,6862,7303,4164,3181,8813,538
Tax2,4822,5741,9761,6181,4881,5621,6051,4591,2861,1371,09290,91,118
Non tax revenue4,8624,9591,3551,1339999641,1021,2261,4442,2783,2269722,420
Of which Transfers 1/4051,1422,0721,452
Total expenditure4,1374,3182,7202,4132,7212,8462,7912,7603,0573,3974,2854,4813,649
Current2,4081,6651,9511,7432,0261,9541,9472,0242,2242,3732,3273,0442,358
Capital1,7292,6537706916968928437368331,0221,0571,4371,088
Investment in pub enterprises 2/901203
Surplus of deficit (-)3,2083,215611316−235−320−84−74−3281933−2,600−111
(In millions of Brunei dollars; end of period balances)
Consolidated fund9631,3199305793564531861401,1091,590
Development fund631591745775713743682523488251
(Government Trust fund195157165109482613207179164
(Percent change)
Total revenue−5.32.6−55.8−17.4−9.61.67.1−0.81.625.126.4−56.5−18.1
Total expenditure−7.24.4−37.0−10.511.84.62.0−1.110.811.126.14.6−14.8
(In percent of GDP)
Total revenue91.097.264.947.445.943.241.640.641.651.964.626.650.1
Of which tax30.833.238.527.927.326.724.722.019.617.316.312.915.8
Total expenditure51.355.753.042.050.348.742.941.746.651.664.163.451.6
Current29.821.518.030.117.433.429.930.633.936.134.843.133.4
Capital21.434.215.011.912.815.313.011.112.715.515.820.315.4
Investment m pub enterprises 2/13.52.9
Surplus or deficit (-)39.841.511.95.4−4.3−5.5−1.3−1.1−5.00.30.5−36.8−1.6
(In millions of Brunei dollars)
Memorandum items
Ordinary expenditure2,3121,5991,8741,6741,9461,8771,8711,9442,1162,2812,2352,9242,265
Changed expenditure1,4832,187468421399473458446460426414448460
Development expenditure3423321701403764964623704616907351,109721
GDP8,0697,7525,1365,8015,4155,8156,5096,6216,5656,5856,6867,0677,067
Source: Ministry of finance, Brunei Statistical Year book various use data provided by the Brunei authorities; and staff estimates.

Reffers from BIA to the budget.

BIA investment through the budget.

Source: Ministry of finance, Brunei Statistical Year book various use data provided by the Brunei authorities; and staff estimates.

Reffers from BIA to the budget.

BIA investment through the budget.

Table 18.Brunei Darussalam: Composition of Government Revenues, 1984–95
198419851986198719881989199019911992199319941995
Budget
(In millions of Brunei dollars)
Total revenue7,3457,5333,3322,7502,4872,5262,7062,6862,7303,4164,3181,881
Tax revenue2,4822,5741,9761,6181,4881,5621,6051,4591,2861,1371,092909
Import duty6663586169788391104103101100
Estate duty111223111202
Corporate Income tax2,4152,5091,9161,5511,4151,4801,5191,3651,1791,029989805
Stamp duty111122222222
Nontax revenue4,9624,9591,3551,1339999641,1021,2261,4442,2783,226972
Licenses454553666688
Service receipts445455455687
Commercial receipts95112123134155178176193243248259272
Property income4,7604,8391,2249908157769161,022784876880685
Transfer 1/4051,1422,072
(In percent of total revenue)
Tax revenue33.834.259.258 859.861.859.354.347.133.325.348.3
of which
Import duty0.90.11.72.22.83.13.13.43.83.12.35.3
Corporate income tax32.933.357.556.556.958.656.150.843.230.122.942.8
Nontax revenue66.265.840.741.240.238.240.745.752.966.774.751.7
Of which
Commercial income tax1.31.53.74.96.27.06.57.28.97.36.014.4
Property income64.864.236.736.033.630.733.938.128.725.620.436.4
Transfers 1/14.833.448.0
(In percent of GDP)
total revenue91.092.264.947.445.943.241.640.641.651.964.626.6
tax revenue30.833.238.527.927.526.724.722.019.617.316.312.9
Of which
Import duty0.80.81.11.01.31.31.31.41.61.61.51.4
Corporate income tax29 912.417.126.826.125.323.320.618.015.614.811.4
Nontax revenue60.364.026.419.518.416.516.918.522.034.648.313.8
Of which
Commercial receipts1.21.42.42.32.93.02.72.93.73.83.93.8
Property income59.062.423.817.115.413.314.115.411.913.313.29.7
transfers 1/6.217.331.0
Source: Ministry of Finance, Brunei Statistical Yearbook (varrious issues); and data provided by the Brunei authorities.

Founders from BIA.

Source: Ministry of Finance, Brunei Statistical Yearbook (varrious issues); and data provided by the Brunei authorities.

Founders from BIA.

Table 19.Brunei Darussalam: Current Expenditure by Ministries and Major Departments, 1984–95 1/
198419851986198719881989199019911992199319941995
Budget
Ministries
(In millions of Brunei dollars)
Prime Minister’s Office132147162125126131127128146157162185
Defense229246279251158363419424410378400595
Foreign Affairs2435415256606678827990104
Defense1728144154337341356475580425702
Home Affairs5359616970716874828888102
Education245253303233253248257271278285301345
Law99111318II171513141624
Industry and Primary Resources40353540384045
Religions Affairs5865707073818996113
Development200233257311390324270272292306350389
Culture, Youth, and Sports192525303437373844484855
Health92102114104122125142148168
Communication485757626372606069797296
Total2,3121,5991,8741,6741,9461,8771,8711,9442,1362,2812,2342,924
(In percent of total “Ordinary Expenditure”)
Prime Minister’s Office5.79.28.67.56.57 06.86.66.86.97.26.3
Defense9.915.414.915.018 419 322.421.819.216.617.920.4
foreign Affairs1.02.27.41.12.93.23.54.03.83.54.03.6
Finance0.71 71.82.42.718.018 218.322.225.419.024.0
Home Affairs2.31.71.24.03.63.83.73.83.93.93.93.5
Education10.615.816.111.913.013.213.713.913.012.513.511.8
Law0.40.50.60.80.90.60.90.80.60.60.70.8
Industry and Primary Resources2.11.91.81.91.71.81.5
Religious Affairs3.53.13.73.83.83.83.94.33.9
Development8.614.613.718.620.017.314.414.013.613.415.613.3
Culture, Youth and Sports0.81.61.11.81.72.02.01.92.12.12.21.9
Health5.55.36.15.66.25.96.26.65.8
Communication2.11.63.11.71.23.83.23.13.23.53.23.3
Total100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0
Major Departments
(In millions of Brunei dollars)
Education177180207210211247257271278285301345
Electrical5155176671727578838197102
Medical and Health68729191102114104122125142148169
Police434351515452485161696167
Public Works118143116190217228171167179193218248
Poval Brunei Armed Forces208221240220359163419424410378400488
Religious Affairs4047505816697073818996113
Source: Ministry of Finance, Brunei Statistical Year book (various issued); and data provided by the Brunei authorities.

“current expenditures” are approximated here by the Brunei catagory of “Ordinary expenditure.”

Source: Ministry of Finance, Brunei Statistical Year book (various issued); and data provided by the Brunei authorities.

“current expenditures” are approximated here by the Brunei catagory of “Ordinary expenditure.”

Table 20.Brunei Darussalam: Development Expenditures
Third NDPFourth NDPFifth NDPSixth NDP
1975–791980–841986–901991–95
actualactualactualallocation
(B$ mn.)(% total)(B$ mn.)(% total)(B$ mn.)(% total)(B$ mn.)(% total)
Industry end Commerce356.6392.23449.34508.4
Agriculture285.3301.7300.8561.1
Forestry00.110.150.1260.5
Fisheries10.320.1190.5390.7
Industrial estates10.110.01453.91713.2
Commerce40.850.3451.2571.1
Fund for promoting industrial00.000.0992.71011.9
Transport and Communications17933.640823.371319.3106419.9
Roads6011.219010.82747.44909.2
Civil aviation315.8834.7842.3891.7
Marine and ports142.5492.8571.5891.7
Telecommunications7514.0844.82887.839374
Postal services00.120 1110.320.0
Social services19536.649328.2110729.9134125.2
Education6612.5995.63038.23847.2
Medical and health244.51478.4531.41031.9
Government housing417.71679.63038.22614.9
Town and country planning00.1603.441111.15239.8
Religious affairs132.4160.9371.0561.0
Radio and television509.450.300.0140.3
Public Utilities10820.325014.387923.8134325.2
Electricity417.71106.32787.559011.1
Sanitation81.6181.0752.0821.5
Water supplies5510.4784.53238.73175.9
Public facilities30.6442.51243.42484.7
Drainage00.000.0802.21062.0
Public Buildings152.928616 43669.954510.2
Security00.027215.52807.63867.2
RBAF00.024013.72556.93506.6
Police00.0321.8250.7360.7
Miscellaneous00.010.1110.32033.8
Survevs and investigations00.010.180.2380.7
Contengency reserves00.000.020.11653.1
Total534100.01750100.03700100.05332100.0
Memorandum item
Total (US$ mn.)2278221839336
Source: Ministry of Finance, Economic Planning Unit, Fifth and Sixth National Development Plans and staff estimates.
Source: Ministry of Finance, Economic Planning Unit, Fifth and Sixth National Development Plans and staff estimates.
Table 21.Brunei Darussalam: Accounts of the Brunei Currency Board, 1984–95
Sept.
198419851986198719881989199019911992199319941995
(In millions of Brunei dollars; end-of-period)
Assets280323378389450453444476510538550567
External assets238284303335367396395412434431446459
Liquid assets124161122174182192202236213255155167
Securities114123175157182201188173219174290291
Accrued interest006433632211
Other assets413975548357496376107104107
Of which:
Cash at bank413974548257496376107104107
Liabilities280323378389450453444476510538550567
Currency in circulation242265295325360397406425460479515530
Notes229251280310344380388406440459493508
Coins131414151617181920212222
Other liabilities000000000000
Reserve fund385883648956385150593536
Memorandum items
Ratio to demand liabilities of
external assets0.981.071.031.031.021.000.970.970.940.900.870.87
liquid external assets0.510.610.410.530.510.480.500.560.460.530.300.32
Commemorative coins (B$ mn.)202825185967637175823150
External assets (US$ mn.)109135140167189209227253264268305323
Sources: Brunei Currency Board, Annual Report (various issues); and data provided by the Brunei authorities.
Sources: Brunei Currency Board, Annual Report (various issues); and data provided by the Brunei authorities.
Table 22.Brunei Darussalam: Monetary Survey, 1984–95
198419851986198719881989199019911992199319941995
Sept.
(In millions of Brunei dollars; end of period)
Net foreign assets1,8012,3122,5513,7773,4473,3663,4113,0274,0473,8475,3134,778
BCB238284303335367396395412434431446459
Commercial banks1,5632,0282,2473,4433,0792,9703,0162,6143,6133,4164,8674,319
Assets1,6342,5222,2833,5213,1303,0343,3742,8043,8343,7085,1604,403
Liabilities714943679516435919022229229384
Claims on private sector1,1001,7286157008599891,2551,8311,9272,4103,2372,466
Other assets1,149532496632529695639347543335289302
BCB413975548357496376107104107
Commercial banks1,107493421578447638590283467228185194
Assets liabilities4,0504,5723,6625,1094,8355,0505,3055,2056,5176,5918,8397,546
Money1,3311,2351,1212,5272,2032,2152,3332,2452,4462,4584,3983,293
Currency223237272299328352364385418426432457
Demand deposits1,1089988482,2281,8761,8641,9691,8602,0282,0323,9662,836
Quasi-money1,5762,3892,0341,9191,9271,9012,1352,4242,4262,9353,1183,599
Time deposits1,2551,8941,3461,2671,1739861,0931,2881,5221,9352,0402,454
Savings and other deposits3224966886517549151,0421,1369039991,0781,145
Other liabilities1,1439475076647059338375361,6451.1991,323654
BCB000000000000
Commercial banks1,1439475076647059338375361,6451,1991,323654
Memorandum items
Currency with banks192723263345424042538373
Broad money2,9073,6243,1554,4464,1304,1174,4684,6694,8715,3937,5166,892
Prime lending rate (end of period)9.58.06.56.56.56.57.07.06.05.86.06.5
(Percent change)
Net foreign assets29.528.310.348.1−8.7−2 41.3−11.333.7−4.938.1−10.3
Claims on private sector1.857.1−64.413.822.715.126.946.05.225.134.3−3.9
Money15.9−7.2−9.3125.5−12.80.65.3−3.78.90.5789−22 9
Currency9.76.514.69.89.57.33.45.98.62.01.310.2
Demand deposits17.3−10.0−15.0162.6−15.8−0.65.6−5.59.00.295.2−26 5
Quasi-money11.051.6−14 9−5.70.4− 1.312.313.50.121.06.324.5
Time deposits16.150.9−28 9−5.8−7.5−16.010.917.818.227.15.433.2
Savings and other deposits−5.154.138.8−5.415.821.413.99.0−20.510.67.99.3
Memorandum item
Broad money 1/13.224.7−13.0409−7.1−0.3854.54.310.739.4−3.8
Sources: Brunei Currency Board, Annual Report (various issues); data provided by the Brunei authorities; and staff estimates.

The huge jump in 1987 was due to an adjustment to the recording of offshore deposits.

Sources: Brunei Currency Board, Annual Report (various issues); data provided by the Brunei authorities; and staff estimates.

The huge jump in 1987 was due to an adjustment to the recording of offshore deposits.

Table 23.Brunei Darussalam: Direction of Loans by Commercial Banks, 1991–95
Sept.
19841985198619871988198919911992199319941995
(in millions of Brunei dollars)
Total Loans1,8351,9282,4063,2382,466
Agricultural991798
Credit and Finance3903575991308281
Manufacturing1523222630
Transport5432492924
Construction254281271343472
General Commerce200251319311341
Professional Services2222325030
Personal Loans8909541,0971,1631,280
(In percent of total loans)
Total Loans100.0100.0100.0100.0100.0
Agricultural0.50.50.70.30.3
Credit and Finance21.318.524.940411 4
Manufacturing0.81.20.9081.2
Transport2.91.72.00.91.0
Construction13.914.611.310.619.1
General Commerce10.913.013.39.613.8
Professional Services1.21.11.31.51.2
Personal Loans48.549.545.635.951.9
Sources: Data provided by the Brunei authorities.
Sources: Data provided by the Brunei authorities.
Table 24.Brunei Darussalam: Balance of Payments, 1984–95
Est.
198419851986198719881989199019911992199319941995
(in millions of U.S. dollars)
Trade balance2,6032,3881,1981,2941,0021,0691,2641,4151,2561,100653704
Exports3,1942,9691,8331,9021,7081,8832,2122,4702,3722,2802,2152,746
Imports5925816346087058149481,0551,1151,1811,5622,042
Services, net−353−134−191−95−67−170−282−311−402−160−119−302
Receipts403116920233063119745379
Payments39316520710487192312374521234171381
Investment income, net 1/8321,0321,1071,3141,5831,6831,9171,9391,8821,7382,4712,568
Receipts1,1831,5251,2061,4771,7341,8542,1132,2152,0941,9272,6222,809
Payments35049399163151172195276211188151241
Current transfers, net−127−128−134−200−161−198−176−99−60−88−6−104
Receipts6121021571315611118
Payments13314014522121921219110571897112
Current account balance2,9553,1581,9802,3132,3582,3842,7242,9442,6762,5902,9992,866
Capital transfers, net−12−6−19−36−12−20−19−19−17−40−14
Foreign investment, net−76−6−22−54−44−73−71−55413824670396
Long-term capital, net−3.191−3,269−2,200−2,076−2,295−2,271−2,678−2,567−3,148−3,522−4,452−3,425
Short-term capital, net330149266−11816161−27886116820196
Overall balance625528212018261143718
External assets BCB
(increase -)−6−25−5−28−21−20−18−26−11−4−37−18
(In percent of GDP)
Trade balance68.867.850.847.037.335.735.236.931.227.014.914.1
Exports84.584.377.769.163.562.861.664.558.856.050.655.1
Imports15.616.526.922.126.227.226.427.527.729.035.741.0
Services−9.3−3.8−8.1−3.4−2.5−5.7−7.9−8.1−10.0−3.9−2.7−6.1
Receipts1.00.90.70.30.70.80.81.62.91.81.21.6
Payments10.44.78.83.83.26.48.79.812.95.83.97.6
Investment income, net 1/22.029.346.947.758.856.153.450.646.742.756.451.5
Receipts31.343.351.153.664.561.958.857.852.047.359.956.3
Payments9.314.04.25.95.65.75.47.25.24.63.44.8
Current transfers−3.4−3.6−5.7−7.3−6.0−6.6−4.9−2.6−1.5−2.2−0 1−2.1
Receipts0.20.30.40.82.10.40.40.10.30.00.00.2
Payments3.54.06.18.08.17.15.32.71.82.20.22.3
Current account balance78.189.684.084.087.679.575.976.866.463.668.557.5
Sources: Ministry of Finance, Statistical Yearbook (various issues); data provided by the Brunei authorities; and staff estimates.

Investment income as of 1985. based on staff estimates of BIA assets only.

Sources: Ministry of Finance, Statistical Yearbook (various issues); data provided by the Brunei authorities; and staff estimates.

Investment income as of 1985. based on staff estimates of BIA assets only.

Table 25.Brunei Darussalam: Exports by Commodity, 1984–94
19841985198619871988198919901991199219931994
(In millions of Brunei dollars)
Total exports6,8146,5333,9904,0063,4363,6734,0104,2673,1633,6853,383
Food and live animals81018182118251619
Beverages and tobaco445663261
Crude material (inedible), except fuel223133211
Material fuels, fabricants, and
related materials6,7306,4363,8783,9073,3523,5603,8714,1283,156
Animal and vegetable oils and fats000000000
Chemicals332223336
Manufactured foods classified chiefly by material101114111313201822
Machinery and transportation equipment3255554129495556121
Miscellaneous manufactured articles211113171022303956
Miscellaneous transactions and
commodities not elsewhere Classified222411111
(In percent of total exports)
Mineral fuels, lubricants, and
related materials98.898.397.297.397.596.996.596.793.3
(In percent of total non-oil/gas exports)
Food and live animals9.810.315.718.023.216.418.2−11.28.5
Beverages and tobacco5.03.84.86.36.82.41.24.50.2
Crude material (inedible), except fuel1.91.62.31.23.42.41.60.70.5
Animal and vegetable oils and fats0.30.10.00.10.30.20 10.10.0
Chemicals3.93.42.21.72.22.72.22.12.5
Manufactured goods classified chiefly by material11.711.112.510.815.311.814.712.89.9
Machinery and transportation equipment38.036.949.241.233.843.539.340.253.3
Miscellaneous manufactured articles23.011.211.717.111.519.621.927.824.5
Miscellaneous transactions and
commodities not elsewhere classified2.41.71.53.61.31.10.80.70.6
(Percent change)
Total exports−5.0−4.1−38.90.4−14.26.99.26.4−9.5−4.6−8.2
Mineral fuels, lubricants, and
related materials−5.1−4.4−39.70.8−14.26.28.76.6
Other8.415.215.3−12.1−14.432.624.00.1
Source: Ministry of Finance, Statistical Yearbook, 1994.
Source: Ministry of Finance, Statistical Yearbook, 1994.
Table 26.Brunei Darussalam: Value and Destination of Selected Exports, 1984–94
19841985198619871988198919901991199219931994
(In millions of Brunei dollars)
Value of major experts
Crude petroleum3,8403,5521,6201,9541,4601,7192,0402,0252,0361,7161,550
petroleum products3699147180174195225206121122106
Natural gas2,8522,7132,1111,7721,7111,6461,6051,8971,5621,5911,413
(In millions of U.S. dollars)
Crude petroleum1,8001,6157449217261121,1261,172125011051015
petroleum products1745671516100124119747669
Natural gas1,3371,2659691411541441161,098959985925
(In millions of Brunei dollars)
Major experts by destination
Crude petroleum
Japan1,7861,217551691411439642626385
Korea370459212353325432447399353
Philippines1163329129619319616551
Singapore432501226207145121225243279
Taiwan Province of China146229679710012513511418
Thailand442692322461302371309350361
United States37441413000752916
Natural gas: Japan2,8521,7132,1111,7721,7181,6461,6051,1971,351
Korea0000000055
Petroleum products3699147110171195225206106
Australia002034150060
Japan2406936501214154
Korea0012313250494045
New Zealand000000090
Sarawak (Malaysia)433202220
Singapore932021220007
Taiwan Province of China0001300000
United States0641066466939280
(In percent of total)
Crude petroleum100.0100.0100.0100.0100.0100.0100.0100.0100.0
Japan46.534334.035.432.925.631.430.924.8
Korea9.612.917.411.122.225.121.919.722.7
Philippines3.00.91.16.64.75.49.68.25.5
Singapore11.114.314.010.69.97.411.012.018.0
Taiwan Province of China3.16.44.15.06.97.26.65.65.7
Thailand11.519.519.923.920.722.015.117.323.3
United States9.711.71.00.00.04.41.40.80.0
Natural gas Japan100.0100.0100.0100.0100.0100.0100.0100.096.1
Korea0.00.00.00.0000.00.00.03.9
Petroleum products100.0100.0100.0100.0100.0100.01000100.0100.0
Japan66.10.03.85.221.225.536.668.551.3
Korea0.00.08.020.918.825.721.119.442.4
Singapore23.832.00.011.512.80.00.00.06.3
United States0.064.872.335.438.547.840 93.70.0
Source: Ministry of Finance, Statistical Yearbook, 1994.
Source: Ministry of Finance, Statistical Yearbook, 1994.
Table 27.Brunei Darussalam: Exports by Country of Destination, 1984–95
198419831986198719881989199019911992199319941995
(In Billions of Brunei dollars)
ASEAN1,0971,360676915612692839845884782
Indonesia122100010126
Malaysia-West113113335414
-Sabah91110t799924
-Sarawak36314138393138323726
Philippines117332912969941961666112
Singapore490369267269194176284285357339
Thailand443693324469302379309351372362
European Union1584573510222326
Of which:
France155013122358
Other5.5583.1693.3093.0842.1222.9753.1613.4002.4763.085
Of which
Australia003343463453113224
Japan4,6634,0012,6612,4732,2352,1362,3302,6711,8472,283
Korea370459294390357483496439464599
Taiwan Province of China147229671101001251351149090
United States3774792436571181137454767
Total6,8146,3333,9904,0063,4363,6734,0104,2673,3833,893
(In percent of total exports)
ASEAN16.120.817.022.817.818.920.919.126.120.1
Indonesia0.00.30.00.00.00.00.00.00.00.7
Malaysia West0.00.00.10.00.00.10.10.11.60.4
-Sabah0.10.20.30.20.20.20.20.20.10.1
-Sarawak0.50.51.00.91.10.91.00.71.10.7
Philippines1.70.50.73.22.02.64.93.91.80.3
Singapore7.28.76.76.73.74.17.16.710.68.7
Thailand6.310.68.111.71.110.37.78.211.09.3
European Union2.30.10.10.20.10.10.20.50.70.7
Of which
France2.30.00.00.10.00.10.10.10.10.2
Others81.679.182.577.082.111.078.879.773.279.2
Of which
Australia0.00.00.11.11.30.91.32.60.00.6
Japan68.461.266.961.765.058.151.162.634.638.6
Korea3.47.07.49.710.413.112.410.313715.4
Taiwan Province of China2.23.31.72.82.93.43.42.72.72.3
United States3.37.36.11.62.14.93.41.11.41.7
Source: Ministry of Finance, Statistical Yearbook, 1994; and data provided by the Brunei authorities.
Source: Ministry of Finance, Statistical Yearbook, 1994; and data provided by the Brunei authorities.
Table 28.Brunei Darussalam: Imports by Commodity, 1984–94
19841985198619871988198919901991199219931994
(In millions of Brunei dollars)
Total imports1,3321,3481,4571,3501,4971,6751,8131,9221,9172,0132,517
Food and live animals205196209237247242277247283
Beverages and tobacco7071t5806964634652
Crude material (inedible), except fuel121717151620232459
Meneral fuels, lubricants, and
related materials21241516141517124
Animal and vegetable oils and fats986688678
Chemicals102951019399102122121124
Manufactured goods classified chiefly by material271290306331355433489527542
Machinery and transportion equipment4664565514034905986247361,007
Miscellenous manufactured articles119145153153175179185194433
Miscellenous transaction and
commiodities not elsewhere classified564714172314696
(In percent of total imports)
Total imports100.0100.0100.0100.0100.0100.0100.0100.0100.0
Food and live animals15.414.514.417.616.514.415.312.911.2
Beverages and tobacco5.35.25.85.94.63.83.52.42.1
Crude material (inedible), except fuel0.91.21.21.11.11.21.31.22.3
Mineral fuels, lubricants, and
related materials1.61.81.01.20.90.90.90.60.2
Animal and vegetable oils and fats0.70.60.40.40.50.50.30.30.3
Chemicals7.77.17.06.96.66.16.76.34.9
Manufactured goods classified chiefly by material20.321.521.024.523.725.927.027,421.5
Machinery and transportation equipment35.033.8137.829.832.835.734.438.340.0
Miscellaneous manufactured articles9.010.810.511.311.710.710.210.117.2
Miscellaneous transactions and
commodities not elsewhere classified4.23.51.01.3160.8030.50.2
(Percent change)
Total imports−13.71.38.1−7.310.911.98.26.0−0.35.025.1
Source: Ministry of Finance, Statistical Yearbook, 1994.
Source: Ministry of Finance, Statistical Yearbook, 1994.
Table 29.Brunei Darussalam: Imports by Country of Origin, 1984–95
198419851986198719881989199019911992199319941995
(In millions of Brunei dollars)
ASEAN4334483165095956917606951,1131,491
Indonesia231012192934321261
Malaysia-West64617694961251S5157271336
-Sabah65679I109511
-Sarawak25410131921191652
Philippines2232223237
Singapore322329374325396451469424721941
Thailand34424559606467527176
European Union227251351307290341321459436501
Of which
Denmark91010181214522134
France241S2361232126202031
Germany 1/255288467074718294132
Italy11163336243039154662
Netherlands34244821322137505126
United Kingdom116124115113117147119135176178
Other6726525895346126367257698981.061
Of which
Australia443737475O4347428094
China27272731323949554119
Hongkong19201618171921342411
Japan266267256194239247264303231261
Korea13141321221711122242
Taiwan Province of China39373435342620263652
United States202210177163188212277263215325
Total1.3311.3481.4571.3501.4971.6751.1131.9222.5173.054
(In percent of total imports)
ASEAN32.533.035.437.739.141.741.936.247.048.8
Indonesia0.20.20.70.91.31.71.91.73.32.0
Malasia-west4.84.55.26.96.47.51.68.211.011.0
-Sabah0.40.30.40.50.60.50.50.50.20.6
-Sarawak0.20.40.30.80.91.11.21.00.61.7
Philippines0.20.10.20.20.10.10.20 10.10.2
Singapore24.224.425.624.126.526.923922.121.930.1
Thailand2.33.13.14.44.03.13.72.72.82.5
European Union17.018.624.122.719.420.418.123.917.316.4
Of which
Germany 1/1.93.86.03.44.74.43.94.23.14.3
United kingdom1.79.27.98.37.88.86.37.07.05.8
Other50.548.440.439.640.937.940.040.035.734.7
Of which
Japan20.019.817.614 416.014 714.615.89.28.5
United States15.215.612.212.112.612.715.313.711.310.7
Source: Ministry of Finance, Statistical Yearbook, 1994; and data provided by the Brunei authorities.

Data for 1989–90 relate to the former Federal Republic of Germany.

Source: Ministry of Finance, Statistical Yearbook, 1994; and data provided by the Brunei authorities.

Data for 1989–90 relate to the former Federal Republic of Germany.

Table 30.Brunei Darussalam: International Reserves, 1984–95
Sept.
198419851986198719881989199019911992199319941995
(in millions of U.S. dollars)
Brunei Currency Board109135140167189209227253264268305323
Of which: liquid assets5777568794101116145129159106118
Consolidated Fund 1/44366047830631927811387759644
Official reserves1091355828276675155455313773551,065967
Commercial banks7189641,0331,7231,5821,5681,7291,6032,1962,1243,3323,040
International reserves8271,0981,6152,5502,2492,0822,2742,1342,5732,4794,3964,008
(In months of imports of goods and services)
Official reserves1.32.28.314.010.16.15.24.52.83.07.44.8
International reserves10.117.723.143.034.124.821.717.918.921.030.419.8
Memorandum items:
Imports of goods and
services (US$ mn.)9857468417127921,0061,2601,4291,6361,4151,7332,423
Brunei dollar/U.S. dollar
(end of period)2.182.112.182.001.951.891.741.631.641.611.461.42
Sources: Brunei Currency Board, Annual Report (various issues); and data provided by the Brunei authorities.

Data on government Consolidated Fund are not available prior to 1986.

Sources: Brunei Currency Board, Annual Report (various issues); and data provided by the Brunei authorities.

Data on government Consolidated Fund are not available prior to 1986.

Table 31.Brunei Darussalam: Exchange Rates, 1984–95 1/
Brunei dollarSingapore dollar
Brunei dollar perYen perBrunei dollar perEffective exchange rates 2/real effective
U.S. dollarSDRBrunei dollarECUnominalrealexchange rate 3/
PeriodEnd ofPeriodEnd ofperiodEnd ofPeriodEnd ofPeriodPeriodPeriod
averageperiodaveragePeriodaverageperiodaverageperiodaverageaverageaverage
19842 132.182.192.131.111.151.681.54110.9109.7113.9
19852.202.112.232.311.08951.681.87112.5111.2111 1
19862.182.182.552.6677732.142.33105.9105.194.7
19872.112.002.722 8468622.432.60103.3101.788.9
19882.011.952.702.6264652.382.28102.899.687.6
19891.951.892.502.4971762.152.27107.7101.791.5
19901.811.742.462.4880772.312.38113.9105.196.9
19911.731.632.362.3378772.142.19116.8105.399.5
19921.631.642.292.2678762.111.99119.7106.3101.6
19931.621.612.262.2169701.891.80120.3108.9101.3
19941.531.462.192.1367681.821.80122.8110.7104.7
19951.421.412.152.1066731.851.86125.5116.9106.0
1995
Q11.441.422.152.2167631.831.90125.3115.1106.1
Q21.401.402.192.1960611.861.88124.8117.2104.3
Q31.411.422.152.1466691.861.87126.3118.4106.1
Q41.421.412.122.1072731.871.86107.9
Sources: IMF, International Financial Statistics; and staff estimates.

Exchange rates for the Brunei dollar are based on Singapore dollar rates reported to IMF, International Financial Statistics.

Annual data for 1995 are January−September average.

Annual data for 1995 are January−November average Quarterly data for 1995/Q4 is for October-November average.

Sources: IMF, International Financial Statistics; and staff estimates.

Exchange rates for the Brunei dollar are based on Singapore dollar rates reported to IMF, International Financial Statistics.

Annual data for 1995 are January−September average.

Annual data for 1995 are January−November average Quarterly data for 1995/Q4 is for October-November average.

ANNEX I: Investment Incentives Act

The Act which is administered by the Economic Development Board offers incentives in the form of tax exemption under the following headings.

A. Pioneer Status

In order to encourage participation from the private sector, both foreign and domestic, the law provides the following incentives for firms granted pioneer status.

1. Exemption from corporate tax

The 30 percent corporate tax is exempted for a basic period of 2-5 years depending on the level of fixed capital expenditure In certain circumstances, tax exemption may be extended up to three additional years. The exemption commences on the first day of production. The tax exemption periods are as follows:

Fixed capital expenditureTax exemption period
Less than B$250,0002 years
B$250,000 but less than B$500,0003 years
B$500,000 but less than B$1 million4 years
B$1 million or over5 years

2. Exemption from taxes on imported capital goods

A pioneer company is also exempted from import duty on plant, machinery, and equipment to be installed in the pioneer factory.

3. Exemption from taxes on imported raw materials

A pioneer company is exempted from paying import duties on raw materials not available or produced in Brunei Darussalam intended for the production of the pioneer products.

A firm can be given pioneer status if it engages in an industry previously not carried out in the country on a commercial scale. The industry must be suited to the economic and development needs of the nation, and there should be favorable prospects for further developing the industry to provide for exports Pioneer status can be given if there are insufficient facilities in the country to carry out the industry on a commercial scale and it is in the public interest.

Pioneer Status Industries, 1994/95
IndustriesProducts
Aircraft cateringFood for airlines
Cement finish millCement
PharmaceuticalMedicines; vitamins
Aluminum wall tilesWall tiles; decorative tiles
Rolling mill plantIron and steel; bars; angle irons
Industrial chemicalsChemicals for oil industry; bactericides;
ShipyardShip repair and maintenance
Tissue paperTissue paper; napkins
TextilesGarment manufacture
Canning, bottling, and packagingCanned soft drinks, packaged food, mineral waters
FurnitureWooden, rattan, knock-down furniture
GlassIndustrial and household glass products
Ceramics and potteryTiles, sanitaryware, potteryware, etc.
WoodbasedPlywood and wooden construction elements
Plastic and SyntheticTubing, pipes, plastic bottles, various rubber products
Rubber
Fertilizers and PesticidesFertilizers and pesticides
ToysVarious toys
GasVarious types of industrial gas
Sheet metal-formingVarious building materials
Source: Economic Development Board.
Source: Economic Development Board.

B. Incentives for Expansion of Established Enterprises

An approved expanding company can be given tax exemption up to a period of five years subject to certain conditions. To qualify for an Expansion Certificate, the company must incur a new capital expenditure in the purchase of productive equipment exceeding B$1 million or not less than B$100,000 and will result in an increase of not less than 30 percent in value at original cost of all the productive equipment of the company The tax exemption periods are as follows:

New capital expenditure incurredTax exemption period
Up to B$250,0003 years
More than BS250,0005 years

C. Incentives for Foreign Loans

The 20 percent withholding tax for interest paid to non-resident lenders is exempted for any “approved foreign loan” if:

  • The loan is utilized for the purchase of productive equipment;
  • The credit facilities are obtained through financial agreement with the foreign lending company; and
  • The amount of loan is not less than B$200,000.

ANNEX II: Brunei Darussalam: Summary of Tax System, December 1995

TaxNature of TaxExemptions and DeductionsRates
1. Tax on Income and Profits
1.1 Tax on individualsNoneNoneNone
1.2 Corporate taxPayable on resident company income accruing in, derived from, or receivable in Brunei Darussalam. A nonresident company is only taxed on its income arising in Brunei Darussalam. Sole proprietorships and partnerships are not subject to tax.

A company, whether incorporated locally or overseas, is considered as resident in Brunei Darussalam for tax purposes if the control and management of its business is exercised in Brunei Darussalam.

Oil and gas companies pay taxes on a quarterly basis and all other companies annually.
All expenses, wholly or exclusively incurred in the production of taxable income, are allowable ad deductions for tax purposes. These deductions include:

• Interest on borrowed money used in acquiring income;

• Rent on land and buildings used in the trade or business;

• Costs of repair on premises, plant, and machinery;

• Bad debts and specific doubtful debts, with any subsequent recovery being treated as income when received; and

• Employer’s contributions to approved pensions or provident funds.
1. Oil companies 55%

2. Gas companies 50%

3. Other Companies 30%
Corporate TaxFor, oil and gas companies, royalties are no longer credited against income tax payments.

Losses incurred by a company can be carried forward for six years Tor set-off against future income, and can be carried back one year.

Allowances for Capital Expenditure:

Depreciation is not allowable expense and is replaced by capital allowances for qualifying expenditure The tax payer is entitled to claim wear and tear allowances calculated as follows:

1. Industrial Buildings

An initial allowance of 10 percent is given in the year of expenditure, and an annual allowance of 2 percent of the qualifying expenditure is provided on a straight-line basis until the total expenditure is written off.

2. Machinery and Plant

An initial allowance of 20 percent of the cost is given in the year of expenditure together with annual allowances calculated on the reducing value of the assets. The rates range from 3 to 25 percent, depending on the nature of the asset.
Corporate Tax3. Balancing Allowances

Balancing allowance is an additional allowance allowed in the year of depreciable assets to take into account any excess of tax written down value over the amount realized on disposition.

4. Balancing Charge

A balancing charge is an amount which is added to the assessment for the year in which a capital asset is sold representing the excess of the amount realized on disposition over the tax written down value.

5. Gain or Loss on Disposal of Fixed Asset

Any gain on disposal of fixed assets is allowed in the computation of income tax. However, any loss on the same is disallowed.

Exemptions under Investment Incentives Act (more details in Annex 1).

A company granted a Pioneer Certificate is exempt from corporate tax for a basic period of 2-5 years depending on the level of fixed capital expenditure.

A company granted an Expansion Certificate is exempt from corporate tax up to a period of five years subject to certain conditions.
1.3 Withholding taxTax on interest paid to nonresident companies under a charge, debenture or in the respect of a loan.Tax exemption for any approved foreign loan if:

• The loan is utilized for the purchase of productive equipment;

• The credit facilities are obtained through financial agreement with the foreign lending company;

• The amount of loan is not less than B$200,000.
20%
2. Social Security Contributions
2.1 Employees Trust FundCompulsory social security scheme for all public and private employees

The law provides for the following withdrawal schemes:

Retirement at the age of 55: Full withdrawals.

Pre-retirement at the age of 50: Partial withdrawal of one quarter of the savings

Next of kin: Full withdrawals allowed by the next of kin of the deceased member.

Emigration: Full withdrawals allowed on emigration.

Incapacity: Full withdrawals allowed for members who are incapacitated whether physically of mentally.

Housing: Partial withdrawals allowed depending on the housing schemes to assist members to purchase or build their own houses.
The following are exempted.

• All security personnel (police, armed forces, and prison wardens).

• All foreign workers.

• All employees above the age of 55.

• All employees working for an employer with an approved fund.
5% for employees.

5% for employers.
3. Taxes on Property
3.1 Capital gains taxNoneNoneNone
3.2 Estate dutyLevied on an estate of over B$2 million for a person who died on or after December 15f 1988.None3 percent
3.3 Gift taxesNoneNoneNone
4. Taxes on Goods and Services
4.4 Business registration feesImposed upon approval of registration by the Registrar of Companies and Business names depending on the form of business.Sole proprietorship B$30

Partnership B$30

Private company B$25

Public company

B$25

Branch of foreign B$25

company
5. Taxes on international TradePercent of Value
5.1 Taxes on importsLevied at ad valorem rates on the C I F. value of imports, also specific rates apply on a few items including tobacco products, coffee, and alcoholic beverages.Imports by the royal family, the Government, diplomatic representatives, religious bodies are exempt. In addition, the following items are exempt under certain conditions:

• Containers and pallets.

• Deceased person’s effects.

• Life-saving apparatus.

• Protective apparel, clothing, accessories, and equipment.

• Samples and miscellaneous articles.

• Tombstones and memorials.

• Ship and boat parts, accessories, and fittings.

• Goods related to aircraft operations.

• Passengers baggage.

• Signs, nameplates, and street lighting equipment.

In addition, basic food stuffs and goods for industrial use (machinery, vehicles, appliances, some petroleum products, etc.) are exempt.

None
Electrical equipment and appliances 5

Clothing and footwear 5

Jewelry, watches 5

Timber products 20

Photographic materials and equipment 20

Furniture 20

Motor vehicles and spare parts 40–200

Cosmetic and perfumes 5

Specific rates

Coffee B$0.05-0.10/lb

Beer B$3/litcr

Wine B$5.5-I2/liter

Spirits B$25/liter

Manufactured tobacco B$18-60/Kg
5.2 Taxes on exportsNone
6. Other taxes
6.1 Stamp dutiesLevied on agreements, insurance policies, bills of sales and exchange, promissory notes, and various property and title transfers.Some ad valorem, some specific.

ANNEX III: Brunei Darussalam: Exchange Arrangements and External Trade and Payments System

(As of end−1995)

A. Exchange Arrangements

Legal tender in Brunei is the Brunei dollar (ringgit in Malay). It is issued by the Brunei Currency Board (BGB), only against payment in Singapore dollar and at par. Furthermore, under the terms of a 1967 currency interchangeability agreement between the BCB and the Board of Commissioners of Currency of Singapore (BCCS), the Singapore dollar is customary tender in Brunei and the Brunei dollar in Singapore. The BCB and BCCS have undertaken to accept each other’s currency and exchange it, at par and without charge, into their own, and have instructed their banks to do the same vis-à-vis their customers. Any excess in currency is regularly repatriated with the issuing institution bearing the costs, and settlements are made in the other country’s currency. As noted, the BCB only deals in Singapore dollars and does not prescribe any exchange rates for other currencies. Banks are free to deal in all currencies, with no restrictions on amount, maturity, or type of transaction.

The Brunei Association of Banks fixes daily buying and selling rates for telegraphic transfers and demand drafts in terms of 17 other currencies on the basis of these currencies interbank quotations in relation to the Singapore dollar.1 Banks in Brunei must apply these rates for transactions with the general public in amounts up to B$ 100,000. Exchange rates for amounts exceeding B$ 100,000 are set competitively by each bank on the basis of the interbank quotations of the moment for the Singapore dollar in the Singapore market.

The Monetary Authority of Singapore (MAS), in charge of exchange rate policy in Singapore, allows the Singapore dollar to float, with its exchange rate in terms of the U.S. dollar, the intervention currency, and all other currencies being freely determined in the foreign exchange market. However, the MAS monitors the external value of the Singapore dollar against an undisclosed trade-weighted basket of currencies within a target band, with the objective of promoting noninflationary sustainable economic growth.

There is no forward market for foreign exchange in Brunei but because of the currency interchangeability agreement with Singapore, foreign exchange risk can be hedged in terms of Singapore dollars by resorting to facilities available in that country, including foreign currency futures and options traded on the Singapore International Monetary Exchange (SIMEX) or over-the-counter forward transactions arranged by There also is an active short-term foreign exchange swap market among the banks in the Singaporean money market.

There are no taxes or subsidies cm purchases or sales of foreign exchange.

B. Administration of Control

There are no formal exchange controls, but under the 1956 Exchange Control Act (as amended most recently in 1984) the Financial Institutions Division in the Ministry of Finance retains responsibility for exchange control matters. The Financial Institutions Division also licenses and supervises commercial banks, including foreign-owned banks incorporated in Brunei and branches of foreign banks operating in Brunei. The Financial Institutions Division also monitors the insurance industry.

The Economic Development Board (EDB) in the Ministry of Finance is responsible for elaborating and administering programs to encourage foreign investment. It may issue certificates granting tax relief for certain approved projects and may enter into joint venture agreements with foreign investors. It may also purchase, hold, and lease land for industrial purposes. A one-stop agency in the Ministry of Industry and Primary Resources facilitates inward investment. The Registrar of Companies controls the functioning within Brunei of enterprises incorporated locally or registered as the branch of a foreign limited company. The Tourism Promotion Committee in the Ministry of Industry and Primary Resources works to encourage tourism.

C. Prescription of Currency

There are no prescription of currency requirements Settlements with residents of Singapore and the Eastern Malaysian states of Sabah and Sarawak are normally effected in the currencies of the countries involved or in third currencies, as agreed between the parties concerned.

D. Nonresident Accounts

There is no distinction between accounts of residents and nonresidents of Brunei, and accounts may be maintained in both domestic and foreign currencies. Debits and credits to all accounts may be made freely.

E. Imports and Imports Payments

There are no restrictions on the origin or provenance of imports. A few imports are banned or restricted for nature conservation, health, safety, security, or religious reasons Restricted items may be imported only with the permission of the applicable Ministry Except for a few items (cigarettes, alcoholic beverages), all imports are subject to ad valorem tariff rates ranging from zero percent to 200 percent. Some 70 percent of items (including basic foodstuffs, and construction and educational materials) are zero−rated. Rates of 5 percent, 15 percent, and 20 percent apply to roost other items. Fireworks are subject to a 30 percent duty while automobiles are subject to duties of 40-200 percent, depending on engine size. Brunei is a party to the Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA). The CEPT Scheme came into operation in Brunei on June 1,1994, and under its terms Brunei will lower its tariff rates on imports from other ASEAN countries to zero by 2003, with the exception of about 120 tariff lines that are permanently excluded under the terms of the CEPT Scheme.

F. Payments for Invisibles

All payments for invisibles may be made freely. There are no restrictions on the amount of foreign exchange that may be used for travel abroad. Remittances to nonresidents of dividends, interest, and profits may be made freely, but interest payments to nonresidents are subject to a 20 percent withholding tax. Interest on loans of at least B$200,000 that are used for the purchase of productive equipment (so-called approved foreign loans) may be exempt from the tax subject to submission of the loan documentation. Resident and nonresident travelers may take out any amount in foreign or Brunei bank notes.

G. Exports and Export Proceeds

There are no restrictions on the destination of exports. Certain exports originating in Brunei–for example, textiles and textile products–are subject to quantitative restrictions and other nontariff barriers in the importing countries, particularly the United States, Canada, Norway, and the members of the European Union. The Muara Export Zone, a free trade area, serves as an entry point for goods destined for the East ASEAN Growth Area (EAGA). There are no export taxes. Export licenses are required for alcoholic beverages, cigarettes, diesel, gasoline, kerosene, rice, salt, and sugar. Export proceeds need not be repatriated or surrendered.

H. Proceeds from Invisibles

Exchange receipts from invisibles need not be repatriated or surrendered and may be disposed of freely. Resident and nonresident travelers may bring in any amount in foreign bank notes and coins, including Brunei gold coins.

I. Capital

There are no restrictions on capital imports or exports. Nonresidents are free to repatriate capital or profits or to borrow from banks in Brunei. Banks may accept deposits and make loans in foreign currency.

There are no sectoral restrictions on foreign inward investment. Activities relating to national food security and those based on local resources require some degree of local participation. At the other extreme, industries producing producing for the local market that are not related to national food security and industries that solely export may be entirely foreign owned. Joint ventures are particularly encouraged in export−oriented industries and activities supporting such industries. At least one half of the Directors of a company must be either Bruneian citizens or ordinarily resident in Brunei.

Industrial Incentives Act provides exemption from income tax and import duties to companies granted pioneer status, as well as established companies planning expansion.2 There is a double taxation agreement with the United Kingdom Under the terms of the agreement, tax credits arc available only for resident companies.3 Unilateral relief may be obtained on income arising from Commonwealth countries that provide reciprocal relief. However, the maximum relief cannot exceed one-half of the rate in Brunei. That relief applies to both resident and nonresident companies.

Only Bruneian citizens are allowed to own land. However, foreign investors may lease land on a long-term basis, including in sites set aside for industry, agriculture, agro-forestry, and aqua-culture.

J. Gold

Only banks licensed to operate in Brunei and gold dealers and jewelers specifically authorized by the Ministry of Finance may buy and sell gold bars. Gold bars are not subject to import duty, but a 10 percent import duty is levied on the importstion of gold jewelry.

K. Changes in 1994–95

1. 1994

May 15. The Muara Export Zone was established as a free trade area to facilitate the entry of goods for use in the East ASEAN Growth Area (EAGA).

June 1. Brunei began to implement the Agreement on the Common Effective Preferential Tariff (CEPT) under which the tariff rates on imports from other ASEAN countries are to be lowered progressively to 0–5 percent by 2003.

June 15. Brunei Coldgas and Korea Gas Corporation signed an agreement for the export of 700,000 tons of LNG a year to South Korea during 1995–96.

December 1. The specific import duty on cigarettes was raised by 350 percent.

2. 1995

February 2. The import duties on motor vehicles were raised from a uniform 20 percent to 40–200 percent in direct proportion to engine size.

April 1. The import duties on 688 consumer items were reduced, in some instances to zero. For example, the duty rates on perfumes and cosmetics were reduced from 30 percent to 5 percent; those on air conditioners, electrical appliances and consumer electronics, from 20 percent to 5 percent; those on garments from 10 percent to 5 percent; and those on personal computers, typewriters, and educational materials, from 20 percent to zero percent.

References

IMF Document

    International Monetary FundBrunei Darussalam—Calculation of Quota for Brunei DarussalamJuly141995(EB/CM/Brunci Darussalam/95/1).

    • Search Google Scholar
    • Export Citation

Official Publications

    Government of Brunei DarussalamBrunei Darussalam in Profile Third Edition (London: Shandwick1989).

    Ministry of FinanceBrunei Currency Board Annual Reports(various editions) (Brunei Darussalam1981–92).

    Ministry of Finance Economic Planning UnitSixth National Development Plan 1991–1995 (Brunei Darussalam1993).

    Ministry of Finance Economic Planning UnitFifth National Development Plan 1986–1990 (Brunei Darussalam1986).

    Ministry of Finance Economic Planning UnitBrunei Darussalam Statistical Yearbook(various editions) (Brunei Darussalam1975–94).

Other Publications

    ChanKenneth S. and Ngiam KeeGinCurrency Interchangeability Arrangement Between Brunei and Singapore: A Cost-Benefit AnalysisSingapore Economic Revie Vol 37 (October1992) pp. 2133.

    • Search Google Scholar
    • Export Citation

    ClearyMark and Shuang YannWongOil Economic Development and Diversification in Brunei Darussalam (New York: St. Martin’s Press1994).

    • Search Google Scholar
    • Export Citation

    SkullyMichael T.Financial Institutions and Markets in Southeast Asia: A Study of Brunei. Malaysia Philippines Singapore and Thailand (Hong KongThe Macmillan Press, Ltd.1984).

    • Search Google Scholar
    • Export Citation
1Available statistics for Brunei Darussalam include GDP by economic sector, both in current prices and prices of 1974; expenditure-side GDP is not compiled. Based on estimates of net factor income, the staff estimated gross national product (GNP) which substantially exceeds GDP on account of the large foreign investment income (Appendix Table 9).
2The oil/gas sector in national accounts includes not only the oil/gas industry itself but also other related activities such as wholesale trade and transportation.
3See Annex I for detailed description of the Industrial Incentives Act.
4Wage determination in the private sector is completely free (unions are nonexistent).
5See Annex II for detailed description of the tax system.
6lt is likely, however, that through the BIA the Brunei Government has a controlling or majority interest in enterprises domiciled abroad.
7Crucial assumptions had to be made in order to estimate foreign investment income. The mission traced the evolution of Brunei’s net foreign investment position, based on unofficial estimates, by adding to the amount of foreign investments reportedly controlled by the B1A at end-1985 the current account surpluses of subsequent years plus all investment earnings. Earnings were assumed to accrue at a rate equal to the average annual U.S. government bond yield.
8Sum of “chemicals,” “manufactured goods classified chiefly by material,” “machinery and transportation equipment,” and “miscellaneous manufactured goods.”
9See Annex III for more detailed description of the exchange and trade system.
1The currencies are the U.S. dollar, pound sterling, Australian dollar, Canadian dollar, New Zealand dollar, Swiss franc, deutsche mark, French franc, Hong Kong dollar, Indian rupee, Malaysian ringgit, Dutch guilder, Japanese yen, Thai baht, Philippine peso, Indonesian rupiah, and Saudi riyal.
2See Annex I for detailed description of the Industrial Incentives Act.
3A company, whether incorporated in Brunei or overseas, is considered a resident of Brunei for tax purposes if the control and management of its activities are exercised in Brunei This is, inter alia, considered to be the case if its Directors’ meetings are held in Brunei.

Other Resources Citing This Publication