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Brunei
| Beyond oil score(out of 100 points) |
52.0 |
| Index ranking(out of 26 countries ranked) |
13 |
| Overall status* |
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| General Economic Framework |
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| Political Framework |
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| Society and Future Skills |
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| (Beyond) oil related factors |
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Brunei is the third-largest oil producer in Southeast Asia, averaging about 180,000 barrels a day. Brunei's oil production peaked in 1979 at over 240,000 barrels (38,000 m³) per day. Since then it has been deliberately cut back to extend the life of oil reserves and improve recovery rates. Brunei is the fourth-largest producer of liquefied natural gas in the world. Oil and natural gas account for almost all exports.
Beyond-oil investments to drive future growth
The fortunes of the Brunei economy rise and fall with the price of oil, and the health of the Asian economy. However the Brunei government, much like its Kuwaiti counterpart, has started to spread its risk, by investing abroad. As part of this scheme, Brunei’s foreign reserves (which have increased recently due to high price of oil), are managed by the Brunei Investment Agency. The BIA invests abroad, in a wide range of industries. Therefore if recession hits one particular industry, other investments would be protected. The BIA also invests in a wide range of countries across the globe’s five continents, as means of protecting itself against economic problems hitting one region of the world, where it has investments. In the 1980s, the Brunei government did suffer from deficits, especially when the price of oil was low. Since then, as means of reducing its dependence on oil, it has actively encouraged investment in the country through various schemes. These include (depending on how much capital is invested, and the type of industry), no income tax for five years, and reduced import duty. The Brunei government has recently taken important steps to turn the country into an International Offshore Financial Center as well as a Center for Islamic Banking.
Beef is a major import commodity for the Brunei economy. However rather than purchase beef from foreign suppliers, the Brunei government has itself purchased a 2,262 square miles Australia based ranch (bigger than Brunei itself) where enough Beef for all of Brunei is produced.
The Brunei economy depends heavily on a foreign labour force. Nevertheless the country’s citizens enjoy a free health care system, free education (until university), plus subsidized housing and rice (major staple in the Brunei diet). Average GDP per capita figures in Brunei ($23500) are much higher than many third world countries. King of Brunei is one of the world’s richest men.
Beyond Oil Summary
Brunei's proven oil and gas reserves are sufficient until at least 2015. However the government hopes that planned deep sea exploration will yield good results in finding new reserves. The Brunei economy, through diversification of its investments and growth of future industries, such as finance at home, is more prepared for the Beyond Oil age than many other countries. The Brunei government’s active and successful policy in other economic areas such as Tourism, and high amounts invested in the educations of the country’s youth, will ensure that Brunei will assist a soft landing for the Brunei economy.
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Indicates high preparedness
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Indicates deficits but potential for development
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Indicates unfavourable preconditions.
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