Country Report Brunei March 2011

Outlook for 2011-12: Policy trends

Brunei runs large trade and budget surpluses, thanks to strong revenue from the energy sector. It also has huge overseas assets, as much of its oil wealth is channelled into investments abroad. What will be crucial to the country's prospects is diversification away from the energy industry and into non-energy sectors as its oil reserves are gradually depleted. The government has the financial resources to attract investment, but progress in developing the non-energy economy has been slow. The most obvious example of this is a methanol plant based in the Sungai Liang Industrial Park, which took six years to progress from inception to completion. The small size of the domestic market dissuades many investors from setting up operations in the sultanate, despite the investment incentives that the government is able to offer. A number of projects are in hand to boost production in the agricultural and agri-processing sectors.

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