Saudi Arabia and Russia's Oil Production Cut: What It Means for Brunei

Saudi Arabia and Russia have recently agreed to cut their oil production by 1.3 million barrels per day until the end of December. 

    This will have a big impact on the global oil market, and especially on Brunei, which is an oil-producing country.

    The price of oil has already gone up to $90 per barrel because of this announcement. This is good news for the government of Brunei, because it means that it will earn more money from selling oil. 

    However, it also means that the government may need to spend more money on subsidies to keep gasoline prices low for consumers.

 

    The government of Brunei heavily subsidizes gasoline, so the increase in oil prices will not have a direct impact on consumers in the short term. 

    However, the government may need to reduce its subsidies in the future in order to offset the higher cost of oil. This could lead to higher prices for gasoline and other oil-based products in the future.

 

    Additionally, the increase in oil prices could have an indirect impact on consumers in Brunei through higher prices for imported goods and services. This is because many imported goods and services are transported using oil-powered vehicles.

 

    Overall, the impact of the increase in oil prices on consumers in Brunei will depend on a number of factors, including the government's response to the higher cost of oil and the global economic situation.

 

    However, the increase in oil prices is a challenge for the government of Brunei. The government will need to carefully consider how to balance the needs of consumers with the need to maintain a healthy budget.

 

Brunei's Job Market Expands in 2023 Despite Challenges

Many businesses in Brunei are planning to hire more employees in the coming months despite challenges such as increased infrastructure spending and the need to upskill their workforce.

 

According to the recently published July 2023 Business Sentiment Index (BSI) by the Brunei Darussalam Central Bank (BDCB), a positive trend is emerging, with businesses displaying optimism about their future performance.

 

The BSI, a monthly index that gauges business confidence in Brunei, is based on surveys conducted among micro, small, medium, and large businesses across all districts and 11 economic sectors. 

 

The July and August 2023 index demonstrates optimism among businesses, with many planning expansions and increased hiring.

 

Key factors contributing to this optimism include the completion of renovation and maintenance projects undertaken by businesses in recent months. 

 

This is expected to boost business activities and lead to increased hiring. Additionally, investments in technological advancements, new equipment, machinery, and employee training are set to enhance productivity, making businesses more competitive.

 

While some businesses expressed concerns about hiring difficulties, particularly concerning both local and foreign employees, only a small number are considering employee layoffs due to poor business performance. This suggests a robust job market in Brunei in the upcoming months.

 

The BSI also reveals that businesses expect higher salary costs due to previous hiring efforts and increased expenses related to significant maintenance work. 

 

Some industries have expressed concerns about the impact of revised customs import and excise duties on plastic products, which took effect on May 17, 2023.

 

Despite these challenges, the overall outlook for the Brunei economy remains positive. 

 

Businesses express optimism about their future performance, with expansion plans and increased hiring on the horizon. This bodes well for job seekers and the overall economy, signaling potential growth and prosperity in the months ahead.

Brunei's Residential Property Market Declines

The Brunei Darussalam Central Bank (BDCB) recently unveiled the latest numbers in the Sultanate's Residential Property Price Index (RPPI) for the second quarter of 2023. It's a story of mixed fortunes that carries implications for consumers, investors, and homeowners alike.

The Numbers in a Nutshell

The RPPI, a vital indicator tracking property price trends, took center stage in this update. The Q2 2023 RPPI stands at 92.6. What's notable here is the 0.54% year-on-year decrease compared to the same period last year (Q2 2022) and an even more significant 4.08% drop when compared to the preceding quarter (Q1 2023).

More Transactions, Less Value

While the RPPI shows a decline in property values, the number of property transactions tells a different story. Mortgage data from banks revealed 129 transactions for private residential properties in Q2 2023, marking a notable 5.74% increase from Q1 2023. However, when comparing year-on-year, there was a slight dip of 0.77% compared to the previous year.

What Property Types Are People Eyeing?

Let's break down the property types that are changing hands. The majority of transactions in Q2 2023 were for detached houses, making up over half (50.4%) of all deals. Terrace houses followed at 25.6%, semi-detached houses at 20.9%, apartments at 2.3%, and land at 0.8%.

What's in Your Wallet?

Property prices, the bottom line for many, revealed an interesting pattern. The median purchase price for all private residential properties during Q2 2023 averaged at BND252,000. That's a 1% increase compared to the same quarter in 2022 and a minor 0.4% uptick from Q1 2023.

Specific property types came with their price tags:

• Detached houses: BND300,000
• Semi-detached houses: BND258,000
• Terrace houses: BND200,000
• Apartments: BND260,000
• Land: BND165,000

This median figure is favoured over averages as it's less affected by unusually priced properties, offering a more accurate market snapshot.

Location Matters

When it comes to where these transactions are happening, the Brunei-Muara District takes the lead with 108 properties changing hands. Belait District follows with 12, Tutong District with eight, and Temburong District with just one property transaction. Among sub-districts, Sengkurong, Kilanas, Gadong, Mentiri, and Berakas 'B' top the list with the most private residential property purchases in Q2 2023.

Behind the Numbers

The RPPI data comes from banks within Brunei and is made available in collaboration with the Ministry of Development, particularly the Authority for Building Control and Construction Industry (ABCI). It serves as a vital tool for tracking how household property prices change over time.

What Does It All Mean?

So, what do these numbers mean for the consumer market?

• For Homebuyers: Lower prices might make homeownership more achievable.
• For Investors: A declining RPPI could signal investment opportunities if they anticipate a market rebound.
• For Sellers: If you're looking to sell, you might need to be patient or flexible with pricing.

Is the decline due to a saturated market?

It's possible, but the property market is influenced by a mix of factors, including economic conditions, interest rates, and consumer sentiment. In-depth analysis is required to pinpoint the primary drivers behind the RPPI decline.

Keep a close eye on the market, as these numbers are just a snapshot of an evolving landscape in Brunei's residential property market.

Whispers of Change: Entrepreneurs' Insights in Brunei

The coffee shop was quiet on this hot summer day, with most tourists having checked out of the small hotel, and locals staying home with their families or on vacation in Miri or Sabah.

 

Awang Daoud, a veteran local entrepreneur, sat at a table in the corner, sipping his coffee. He was joined by his friends, Haji Usin and Awang Jaya.

 

"I'm not comfortable with how much we're depending on Chinese investment," Awang Daoud said, breaking the silence.

 

"What's your issue?" asked Haji Usin.

 

"We're becoming too reliant on China," said Awang Daoud. "We need to ensure that we're developing our own domestic economy and not just relying on foreign investment."

 

"I agree with you," said Awang Jaya. "This trend is also making it difficult for home-grown businesses to grow and compete."

 

Haji Usin nodded. "Chinese companies are often better capitalized and have more access to technology than local businesses. This gives them a significant advantage."

 

"But the government is committed to economic diversification," said Awang Daoud. "But I'm skeptical that they'll be able to reduce our reliance on China without taking some concrete steps."

 

"What kind of steps?" asked Awang Jaya.

 

"The government could put in place policies that support the private sector," said Awang Daoud. "They could also provide access to training and development programs for entrepreneurs. And they could facilitate networking opportunities between local businesses and foreign investors."

 

"Those are all good ideas," said Haji Usin. "But I think the most important thing is for the government to create a level playing field for all businesses, regardless of their nationality."

 

"That's right," said Awang Daoud. "We need to make sure that local businesses have a fair chance to compete."

 

The three men continued discussing the issue. They agreed that the overreliance on Chinese investment was a serious concern, but they also felt that the government was taking steps to address it. They were hopeful that Brunei would achieve economic diversification without sacrificing its sovereignty or environmental sustainability.

 

"I wonder if we'll ever see the day when Brunei is no longer so dependent on Chinese investment," said Awang Daoud.

 

"I hope so," said Haji Usin. "But I'm not holding my breath."

 

"Me neither," said Awang Jaya. "But it's worth fighting for."

 

"The three men finished their coffee and stood up to leave. As they walked out of the coffee shop, they cast hopeful glances back at the empty streets, trusting that the government would do its best to make a difference."

 

 

Disclaimer: The names of individuals mentioned in this story are entirely fictitious. However, the topics and concerns discussed by these characters are representative of the genuine concerns and issues faced by entrepreneurs in Brunei. The narrative aims to illustrate broader economic and entrepreneurial challenges without any intention to reference or depict real persons or events.

How China's Investments Are Shaping Brunei's Economic Transformation

Snapshot of PMB taken from Hengyi's corporate video

    Brunei, a small Southeast Asian country, has long relied on its oil and natural gas reserves for its prosperity. However, these resources are finite, and Brunei is aware that it needs to diversify its economy to ensure its long-term future.

 

    In 2007, Brunei launched a plan called "Wawasan Brunei 2035" or Brunei Vision 2035. This plan aims to reduce Brunei's dependence on oil and gas and create a more sustainable economy. One of the key strategies for achieving this goal is to attract foreign investment.

 

    China has been a major source of foreign investment in Brunei. Chinese companies have invested in a wide range of sectors, including oil and gas, technology, fisheries, agriculture, logistics, and infrastructure. 

    One of the largest Chinese investments in Brunei is the Pulau Muara Besar refinery and petrochemical complex. This project is a joint venture between the Bruneian government and China's Zhejiang Hengyi Group.

 

    The Chinese investment has had a mixed impact on Brunei's economic diversification. On the one hand, it has helped to create jobs and boost economic growth. On the other hand, it has also reinforced Brunei's dependence on hydrocarbons and made it more difficult for the private sector to thrive.

These narratives or statements have sparked a debate among Bruneians about the role of China in the country's economic development. 

    Some people see Chinese investment as a positive opportunity, while others are more cautious and express concerns about overreliance on a single partner.

 

    The key challenge for Brunei is to find the right balance between attracting foreign investment and developing its own domestic economy. 

    The government will need to strike a delicate balance between government involvement and private sector empowerment. It will also need to ensure that foreign investment is aligned with the country's long-term development goals. (MHO/09/23) 

Note: This article is fuelled by news articles published by East Asia Forum and discussion in social media posts, and other forms of communication.

A Journalist's Journey through the Evolution of Journalism

I've seen the evolution of journalism firsthand, from the days of typewriters, fax machines, and pagers to the modern era of social media and live streaming. Despite the changes, I've always remained committed to telling the stories that matter.

 

In the early days of my career, I covered a wide range of topics, from social events to crime stories, and even government affairs. But it wasn't just about following the news; it was about immersing myself in the rhythm of society. And some of the best places to do that were at coffee shops, mosques, and other social gatherings.

 

Coffee shops were the epicenters of conversation and intrigue. They were where people gathered to talk about the latest news, gossip about their neighbors, and debate the latest political issues. As a journalist, I knew that if I wanted to get the real story, I had to be a regular at these coffee shops. I would often overhear conversations that gave me leads for stories. I would also talk to people and ask them about their thoughts on current events. This helped me to get a better understanding of the pulse of the community.

I also spent a lot of time at other social gatherings, such as weddings and community events. These were always vibrant celebrations, and they were a great place to hear stories that might not have made it into the news. Amidst the festivities, people would often let their guard down and share secrets that they wouldn't have told anyone else. I would also take photos of the events, which helped me to capture the essence of the community and the spirit of the occasions I covered.

 

However, sending pictures back to the office was a challenge. Digital cameras weren't yet widely available, so I had to use film cameras. This meant that I had to develop my film at a local photo lab, and then send the prints to the office by bus or courier. It was a time-consuming and expensive process, especially since the office was about 100 kilometers away from Bandar Seri Begawan, where I was posted.

 

I remember one time, I was covering a community event in a remote village. I took some great photos, but it took me two days to get the prints back to the office. By the time they arrived, the story was already old news.

 

That experience taught me the importance of having a fast and efficient communication system. 

 

Fast forward to today, journalists have access to a vast array of tools that make it easy to get the news out quickly and accurately. We can use social media to connect with sources, live-stream events, and publish our stories instantly. This is thanks to the incredible pace of innovation in information and communication technology.

 

I no longer need to hang out at coffee shops or weddings to get the pulse of the society or to scan for issues of the day. I can now join online forums and chat groups to fish for information or to get the latest intrigues.

 

The rise of social media has given journalists a new platform to reach a wider audience. We can now share our stories with people all over the world, and we can get feedback and input from our readers in real time.

 

Journalists can now live-stream events and interviews, giving readers a real-time view of the news. This is a powerful tool for journalists, as it allows us to show people what is happening as it happens.

 

The use of artificial intelligence (AI) is transforming the way journalists gather and report news. AI can be used to identify trends, analyze data, and generate story ideas. This is a powerful tool that can help journalists to be more efficient and effective.

 

The future of journalism is uncertain, but it is clear that the industry is changing rapidly. Journalists need to be adaptable and willing to embrace new technologies. We also need to be mindful of the ethical implications of these technologies.

 

I am proud of the work that I have done over the years, and I am excited to see what the future holds for journalism. I believe that the industry is poised for a new era of innovation and creativity, and I am eager to be a part of it.

 

I hope that this article has given you a glimpse into my journey as a journalist. It has been a challenging but rewarding career, and I am grateful for the opportunity to have experienced it. (MHO/09/23)

Brunei's Non-Oil and Gas Sectors: A Growing Market for Investors

The Department of Economic Planning and Statistics (JPES) reported that Brunei's economy grew by 0.8% in the first three months of 2023, compared to the same period last year. This growth was mainly driven by industries that are not related to oil and gas.

 

The non-oil and gas sector, which includes sectors such as transportation, finance, and other services, grew by a significant 6.2%. This was a positive trend. However, the oil and gas sector, which is usually a big part of Brunei's economy, actually shrank by 5% during this time.

 

The increase in the non-oil and gas sector was thanks to specific areas like air travel, finance, and other transport services. More people were using airplanes for travel, and the financial sector also did well. The production of petroleum and chemical products in the non-oil and gas sector declined a bit because some equipment needed maintenance. However, the creation of new chemical products, especially urea fertilizer, increased significantly.

 

On the other hand, the oil and gas sector faced challenges. The production of crude oil, natural gas, and liquefied natural gas decreased due to the impact of the COVID-19 pandemic. The pandemic caused delays in various activities related to exploring, developing, producing, and maintaining oil and gas resources.

 

Looking at where the value comes from in the economy, the largest contributor was the industry sector, followed by services and then agriculture, forestry, and fishing. In terms of money, the total value of everything produced in Brunei during this time was around BND4.9 billion, a bit less than the BND5.1 billion from the same period last year.

 

The oil and gas sector still played a big role, making up almost half of the total value. But the non-oil and gas sector, which includes things like making petroleum products and chemicals, also made up a significant portion.

 

When we think about how people spent their money, the growth in the economy was mainly due to people spending more on things for themselves and their families. However, the overall increase was balanced out by decreases in things like government spending, investment in businesses, and the export of goods and services, particularly mineral fuels.

 

This report indicates a mixed performance of Brunei's economy in the first quarter of 2023. Here is a breakdown of how it might impact different aspects:

 

Positive Growth:

 

The overall economy grew by 0.8% compared to the same period last year. While this growth might seem small, any positive growth is generally seen as a good sign, as it means the economy is expanding rather than contracting.

 

 

Potential Benefits:

 

Economic growth can lead to improved job opportunities, increased income, and enhanced quality of life for the community. The growth in the non-oil and gas sector indicates a diversification of economic activities, potentially creating more job options in industries beyond oil and gas.

Caution for Oil Sector Workers:

 

The decline in the oil and gas sector might have implications for those employed in this industry, as decreased production could lead to job losses or reduced income for workers in this sector.

 

Business Sector:

 

The growth in sectors like air travel, finance, and transportation services can benefit related businesses. Businesses providing these services might see increased demand and revenue. On the other hand, the decline in the oil and gas sector might negatively affect businesses associated with it, such as suppliers and service providers to the industry.

 

Challenges for Government Revenue:

 

The decrease in the oil and gas sector's contribution to the GDP could impact government revenues. Brunei heavily relies on revenue from the oil and gas sector to fund its public services and projects. A decline in this sector might mean less revenue for the government to spend on various initiatives.**

 

Export Challenges:

 

The decrease in exports of goods and services, particularly mineral fuels, could impact Brunei's trade balance. If the country earns less from exports, it might have to rely more on other sources of income or adjust its trade strategies.**

 

Investment and Development:

 

The decrease in gross capital formation (investment in businesses and infrastructure) suggests that there might be less investment activity. This could potentially slow down the development of new projects and initiatives that require funding.**

 

COVID-19 Impact:

 

The report highlights that the oil and gas sector's decline was due to the ongoing impact of the COVID-19 pandemic. Delays in exploration, production, and development caused by the pandemic affected the sector's performance. This emphasizes that even as the economy recovers, the pandemic's effects can still influence certain sectors.

 

In summary, the economy showed growth, albeit at a modest rate, with the non-oil and gas sector being the main driver. This diversification is generally positive, as it can create resilience in the economy by reducing its dependence on a single sector.

 

However, challenges remain, especially in the oil and gas sector, which historically has been a major contributor to the country's economy. The report suggests a need for ongoing monitoring and strategic planning to ensure a balanced and sustainable economic development that benefits all segments of society.

 

 

 

Economic Challenges and Overseas Opportunities Spark Discussion on Brunei's Future

An online discussion forum has shed light on the concerns and aspirations of Bruneians regarding the future of their country, as the nation navigates economic challenges and pursues its ambitious national development plan, Wawasan 2035.

 

Participants engaged in a thought-provoking dialogue, discussing the impact of the oil and gas industry, rising costs of living, and the appeal of overseas job opportunities.

 

 

Oil and Gas Reliance Raises Concerns

 

Brunei's dependence on oil and gas as the main source of income has been a topic of concern for participants. The non-renewal of contracts with major energy companies and the potential decline in demand for fossil fuels have led to uncertainty about the nation's economic future.

 

Many forum members questioned whether Brunei could achieve its Wawasan 2035 development goals without diversifying its economy beyond the energy sector.

 

 

Rising Costs and Income Disparities

 

The rising cost of living in Brunei has also been a major concern. Many participants noted that while prices of goods are increasing, salaries have remained stagnant. This disparity has sparked frustration and led some participants to question the sustainability of the current economic model.

 

 

Youth Perspectives and Employment Challenges

 

Younger participants voiced their concerns over limited job opportunities and challenges in securing well-paying jobs despite higher qualifications. Some participants expressed disappointment that their educational achievements did not necessarily translate into promising employment prospects within Brunei.

 

The minimum wage for certain sectors, such as IT and finance, also drew criticism as inadequate.

 

 

Desire to Work Overseas

 

The allure of better job opportunities, higher salaries, and increased exposure abroad was a recurring theme in the discussion. However, participants also highlighted the challenges of finding employment overseas, including visa requirements, language barriers, and cultural adjustments.

 

Several shared their experiences of attempting to secure jobs abroad and the difficulties they encountered during the process.

 

 

Realistic Views of Overseas Opportunities

 

Forum members who have already moved overseas shared both positive and negative aspects of working abroad. They emphasized the need for language skills, relevant experience, and qualifications to compete in competitive job markets. Additionally, participants discussed the financial implications of moving abroad, including cost of living and taxation considerations.

 

 

Impact of COVID-19 and Economic Recovery

 

The ongoing effects of the COVID-19 pandemic were not overlooked, as participants acknowledged the challenges it brought to businesses, job markets, and economic recovery efforts. Many shared their personal experiences of job loss and the difficulties in finding new employment opportunities during the pandemic.

 

 

Local vs. Overseas Job Prospects

 

While some emphasized the importance of contributing to Brunei's development and remaining part of the solution, others advocated for seeking international experience and employment opportunities overseas. The tension between contributing locally and pursuing global exposure was evident throughout the discussion.

 

 

Skills and Attitude for Employability

 

The significance of possessing relevant skills and a positive attitude for employability resonated with participants. Success stories were shared, where individuals started with low-paying jobs and worked their way up through dedication and perseverance.

 

 

Brain Drain and Government Policies

 

The potential brain drain from Brunei due to skilled individuals seeking opportunities overseas was a prominent concern. Participants called for government policies that address economic challenges, such as diversification, education enhancements, and measures to retain talent within the country.

 

Conclusion

 

As the discussion forum highlighted the diverse perspectives and opinions on Brunei's future, it showcased the complexities of economic challenges, employment prospects, and personal aspirations faced by its citizens. As the nation strives to navigate these complexities, it remains to be seen how Brunei will address these concerns and chart a path forward toward its development goals. (MHO/08/23)