Travel Guide

Economy
Brunei enjoys one of the highest standards of living in South East Asia and remains one of the few countries in the world with no personal income tax. The sources of Brunei’s wealth are the oil and gas industries which supply the country with 76 per cent of its gross domestic product (GDP). Oil and gas account for 95 per cent of total exports and this income supports the economy.

Brunei has a developing market economy based on the exploitation of petroleum and natural-gas reserves. A relatively small population combined with extremely rapid economic growth, particularly during the 1970s, has allowed the state to give its citizens one of the highest per capita incomes in Asia. The agricultural sector accounts for approximately 2 percent of the GDP and employs less than 4 percent of the work force. Rubber, once the main source of export earnings, was increasingly neglected after the discovery of petroleum and is no longer cultivated. About four-fifths of Brunei’s food requirements are imported, including its staple, rice. Pepper is cultivated in scattered areas throughout the country. Other crops: rice, sago, coconut palms, cassava, and local fruits are grown on a small scale. Farming, largely because of the availability of paid employment, has become only a part-time business for rural families.

Heavy Industry in Brunei accounts for about three quarters of the GDP, but less than one-tenth of the work force and is dominated by petroleum and natural-gas production. Brunei Shell Petroleum, jointly owned by the Royal Dutch Shell Group and the Brunei government, is the major petroleum company in the country. Some of the oil, produced mainly from offshore wells that are located between Bandar Seri Begawan and Kuala Belait, is refined locally, but most is exported via an offshore terminal near Seria. Intensive development of natural-gas reserves in the 1970s and construction of a natural-gas liquefaction plant at Lumut produced a rapid growth in natural-gas exports.

Brunei has a substantial trade surplus, largely because of the value of its oil and natural-gas exports. Major export markets are Japan, Thailand, South Korea, and Singapore. Imports, largely machinery and transport equipment, manufactured goods, and food, are chiefly supplied by Singapore, Malaysia, Austrailia, the European Economic Community, and the United States.

The government of Brunei offers sizable tax exemptions on investments in an effort to attract new industry, but the small size of the indigenous work force is a major obstacle to development. Projects in industry and in infrastructure rely on foreign workers, who constitute about one-third of the total work force. Services and finance account for more than one-third of the GDP and employ nearly one-half of the work force.

Recently the government has made steps to promote Brunei as a financial marketplace with the creation of the Brunei International Financial Centre (BIFC) and the granting of a license to create a Stock Exchange to the International Brunei Exchange (IBX).

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