Country In Concentrate Brunei Economics Essay

Brunei, whose name is also known as BRUNEI DARUSALLAM is a small country that became independent in the entire year 1984. It really is a tiny country around 406, 000 people. Comprising of Malays, who accocunts for the two -third of the populace while the Chinese constitute 16% of the population also. Also in the minority populace will be the indigenous sets of who are the Muruts and Dunsuns,

It is split into 4 districts, namely Brunei-Muara (capital), Tutong, Balait and Temburong. It became a English protectorate in the entire year 1888 and joined the ASEAN countries in 1984. Since 1962, Sultan Hassanal Bolkiah acquired ruled the nation and is reported to be the seventh wealthiest specific whose well worth is valued for approximately $42 billion us dollars, all thanks to its huge reserve of coal and oil, It really is a country where its individuals enjoy great subsidies from the federal government and pays no tax. Brunei gets the second highest human development index among the South East Asia countries, according to. http://www. bbc. co. uk/news/world-asia-pacific-12990058.

The people of Brunei enjoys much from its authorities. That is a country where education is free and compulsory from age ranges 5 to 16. The literacy ratio of the folks of Brunei is 60%.

COUNTRY FACTS (courtesy BBC survey on BRUNEI)

Full name: Brunei Darussalam

Population: 406, 000 (UN, 2011)

Capital: Bandar Seri Begawan

Area: 5, 765 sq km (2, 226 sq a long way)

Major languages: Malay, English, Chinese

Major religions: Islam, Buddhism, Christianity

Life expectancy: 76 years (men), 81 years (women) (UN)

Monetary unit: 1 Bruneian buck = 100 cents

Main exports: Crude olive oil, liquefied gas, petroleum products

GNI per capita: High income: $31, 800 (World Lender, 2009)


Brunei's economy is dependant on coal and oil, while its major exports are crude engine oil, petroleum products and liquefied gas. This has made it to provide its residents with the best per capita incomes in ASIA. It entirely relies on brought in goods and produced products for your country. Brunei is an excellent investment haven because of its peaceful aspect and stability in the polity. http://www. globserver. cn/en/brunei/doing-business

In ensuring business ethics are preserved, the Ministry of industry and Primary resources is entirely in charge of facilitating and promoting trade in Brunei and is also been sub- governed by the 4 tiers of chambers of business namely

National Chambers of Business and industry

Brunei Malay Chamber of Business and Industry

Brunei international Chamber of Commerce and industry

Chinese Chamber of Commerce


Brunei earns about 95 % of earnings from export which has resulted in their overall economy having a strong come back this year 2010 after a little down flip and GDP rose by 5 % in the first 1 / 2 of 2010 http://www. globserver. cn/en/brunei/imf-consultation.

Presently the Brunei administration is looking at diversifying into other financial areas while putting away huge amount of money to back again up this kind of initiative. This money are been set aside in other to be evaluated by genuine buyers, either through open public private partnership or joint projects, especially in energy industries, telecommunications and most importantly Food business industry.

Why invest in Brunei

So many factors could lure any interested investor into Brunei. THE FEDERAL GOVERNMENT of Brunei has put so many actions in destination to make the united states suitable for an average investor, who is taking a look at his ROI to mature in the shortest period. In deciding if to invest in Brunei certain factors must be investigated as to affirm its overall elegance and also by managing it with other key factors as narrated by (Charles Hill 2009)

Economic guidelines: This has to do with the size of the Brunei market, whose economic development is dependant on its free market system and its capacity for development (Charles Hill 2009). Brunei procedures the Constitutional Sultanate type of government, (where all vitality is invested in the Sultan who doubles as the Primary Minister). Although the Sultan has some 29 council members whom he consults, but in this case I really do not think the opinion of this members really matters. The Sultan genuinely manages the riches of the country perfectly, as this is visible in the typical of living of the folks of Brunei. He has also made provision for free education, free medicals, subsidized cover, and even the rice that is been sold to the public enjoys a whole lot of subsidy.

The Sultan has been able to put in place good financial policies that would attract investors. Brunei authorities is looking ahead to the future where the natural coal and oil reserves might not exactly have the ability to make enough money for the economy. It is taking a look at ways to diversify into other areas and with these kinds of plans, he needs foreign investors to do this for him.

Costs: Many factors like economic, politics and legal factors determine the price tag on conducting business in a Brunei. For instance, in Nigeria a overseas company trying to get may have to pay off some cash to greedy politicians before been allowed to operate. This is attributed to the ideology of the individuals. Whereas such an act is seen as a unlawful offence in Brunei, because of Sharia law system being used. So also the infrastructural position of Brunei have been considered and found to be at par with some developed Asia countries within its environ which also help reduce cost of technological import on the part of an investor.

Risks: The risks of doing business in Brunei may be determined by some factors such as political and economic factors

Political Risk: has been identified by (Charles Hill, 2009)" as the chance that political causes may cause drastic changes in a country's business environment that adversely impact the profit and other goals of a commercial enterprise. In his own thoughts and opinions (S H Robock) thinks that "political risk tends to be better in countries experiencing social unrest and disorder. Such unrest he cases is more pronounced in countries where there are more than one cultural group or countries where its resources has been mismanaged by different leaders and subsequently led to poor quality lifestyle and inflation. With each one of these given instances, Brunei can be reported to be free of any unrest as explained above since it has enjoyed a stable administration for so a long time and its own ruler His Majesty Sultan Haji Hassanal Bolkiah who doubles as the Prime Minister, Minister of funding, and also as the defence Minister.

Economy Risk :According to (Charles hill, 2009) "defined it as the chance that economic mismanagement may cause drastic changes in a country's business environment that harmed the income and other goals of a particular business enterprise". Brunei current economic climate has been the cynosure of most eyes as regards its boisterous overall economy. Currently the Sultan of Brunei has used a major step in reshaping the continuing future of the country's economy, pointing out the necessity for the country to diversify into other sectors, such as tourism, agriculture and fishery. Nevertheless, Brunei's economy is jeering up for future years especially as it welcomes traders from the exterior world, who'll help develop the IT sector and its proposed ISLAMIC bank.

Measures set up by Brunei Federal to get and stinulate foreign investors

The Sultan has handed Flexible business regulations guiding the modus operandi of business investors in Brunei where possession of business for international buyers could be up to 100% possession.

Brunei federal government has put in place a Zero company Tax coverage for foreign shareholders as high as 8yrs. Therefore that there surely is no tax on personal income, payroll or even on the export.

Brunei has one of the best living conditions and standards in your community, this is noticeable in the approach to life and good health the residents so enjoy

Being a little country, the neighborhood market is small also, there is relatively no competition within the overseas investors / market

Brunei federal government has been able to invest a lot into the overall economy of the country and this has helped it to achieve a Low and cheap Energy cost

The laws governing foreign investors are quite flexible and entrepreneur friendly in Brunei.

There is likelihood of 100% international ownership in investment

There is provision of investment motivation by the Government for new traders, which really helps to nurture your business from starting up the business, passing through expansion till it gets to expansion stage

Creation of new economical technique to reduce unemployment and increase other business opportunities

An infrastructure development programme to ensure Authorities keeps committing by partnering with external stakeholders

A security technique to ensure Brunei's political balance, where all people and foreigners feel secure while they go about their daily business

With all these evident procedures, it is not hard to say which it more of advantage to purchase Brunei where in fact the polity is secure and likes good procedures from the Sultan who have managed to give back proceeds from the crude oil back to its people.


After deciding on selection of country to move into, another uphill task is to choose how to enter in the marketplace. There are different types of market entrance but it is necessary to consider other factors that helps make the right selection of entrance. Each market accessibility has its merits and demerits. However, addititionally there is need to state that there surely is no perfect entrance as far as this strategy is concerned. Many factors could be looked at while choosing the sort of market entrance options to choose from. There are different sorts of models, but also for purpose of this report I have made a decision to recommend the SWOT ANALYSIS STRATEGY

This means that organizations should adopt a technique that is most suited to it, which helps it to accomplish its internal capabilities (durability and weakness) while also considering the external capabilities such as opportunities and threats. (Kenneth Andrews, 1970).

Also other access method could be analysed as against your options mentioned earlier. These include taking into consideration the options of Exporting products straight in to Brunei which will in turn improve the cost of transportation

Franchising is another method by which a company should use to get entrance into a country but it addittionally comes with its problems such as devoid of control over quality of your respective product.

Other methods that may be investigated are Joint projects and full ownership of subsidiaries.


It is important to summarize what type of food product and items which will be offered to the general public. Research should be completed on the kind of food that is satisfactory to the folks of Brunei putting under consideration that it is an Islamic country. There is certainly need to build an operating plan

Sourcing for good location to establish the business is vital. Other facilities such as warehouse, safe-keeping, and equipment is highly recommended at this time. It's important to also retain in mind if the house for the business would be bought, rented or even be created to suit the kind of business being proposed

It is essential to register the business name with the local expert at the chambers of commerce and industry office for proper documents and licensing

. Employ a duty expert to clarify all tax issues as the truth may be and all other necessary permits which may be needed


The following factors were considered before arriving at this recommendation

Supportive Environment: the Government of Brunei is convinced in sustaining the human environment through right practice in regards to commercial pollution and emission. Any company that is available guilty is banned and evicted from its location. There may be heavy investment in infrastructures and facilities.

Infrastructure: Brunei can easily boast of well-developed infrastructures compared to its surrounding neighborhood friends. Its telecom industry is well toned that an average Brunei citizen could feature having a mobile. The sea slot that serves the country in addition has been improved after to serve all sorts of maritime business. While its road are of good benchmarks.

Taxation: Brunei will not operate income tax or export duty, which shows as a good starting point for a fresh investor.

Import duty: Imported goods, foodstuffs and materials for industrial use do not pay transfer duties.

It is noticeable that investment in Brunei has more of opportunities than risk, because of all the aforementioned reasons above.

I would recommend an investment in Brunei. Considering all the right plans the federal government has had the opportunity to set up place.


I am very happy to let you know that after investing in a lot of work and information gathering into this report, I am firmly of the judgment that buying Brunei would not be regretted as apparent in this article.

Though it is a small country but, its ROI will be achieved over a short period of time, if all the factors should be considered including the Risks, economic procedures, and cost implication to do business in Brunei which is very low. I recommend an overall overview of this statement, where all the merits are deeply looked into and used as a parameter for buying Brunei.

With the federal government likely to diversify into other sectors of the economy, It is my belief that Brunei will get started to take pleasure from more influx of international workers, foreign shareholders, and even large numbers of holiday.

Another area that should be looked into as regards buying Brunei is the futuristic plan of the spot. This is a plan that the Sultan has suggested to have them by using a journey of 20years. Within this period, it includes made plans to purchase building more high surge structure, streets, airports, universities, hospital, and make the spot attractive to the exterior world. In addition, it projects to be self-sufficiency in the year 2015.

In all of these, the Sultan has a major role that can be played. The Sultan has had the opportunity to maintain a well balanced government and overall economy. It really is my judgment that the politics stability will not experience any changes in an extended while as the ruling family intends to maintain its grasp on electric power by not allowing any political process that would want to usher in a new government.

Although there were a little complain about the extravagant lifestyle of the royal family, no real opposition has come out to publicly condemn this government. If things remains as it is with no change in ability, then Brunei's current economic climate stability is guaranteed which is most suited to any buyer.

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