As Investments Fall, Brunei Faces Call for Reform and Efficiency

 

Brunei is experiencing a significant drop in foreign investments, leading to frustrations among businesses and citizens. Is the country’s red tape driving away foreign funds? With key sectors like mining and manufacturing struggling and investors seeking opportunities elsewhere, Brunei’s future is uncertain. Can the nation reform its bureaucracy in time, or will it continue to lose ground to more competitive neighbours? Explore the obstacles hindering Brunei’s economic potential and the calls for urgent change. MHO

 

 

 

BANDAR SERI BEGAWAN, SEPTEMBER 2024: Brunei Darussalam’s foreign direct investment (FDI) has seen a notable decline in the first quarter of 2024, sparking concerns among both the public and the business community. 

 

According to recent figures from the Department of Economic Planning and Statistics, the country’s total FDI stock now stands at BND 8.266 billion, down from BND 8.960 billion at the end of 2023. 

 

As the country grapples with this downturn, citizens are increasingly voicing concerns about the factors driving these numbers, with many pointing to bureaucratic hurdles as a significant barrier to progress. 

 

One of the most significant declines has been in equity investments —the direct injection of foreign capital into Brunei’s economy—which fell from BND 7.728 billion to BND 7.450 billion over the first quarter. 

 

More concerning, perhaps, is the sharp drop in debt instruments, or foreign loans and credit, which plummeted to BND 815.9 million from BND 1.232 billion in the previous quarter. 

 

This decrease in foreign financial support suggests that businesses may be finding it harder to access the credit needed for growth and expansion, leaving many projects in limbo. 

 

Public sentiment has become increasingly critical, with many citizens taking to social media to voice their frustrations over the slow pace of government processes. 

 

One individual commented, “Red tape, red tape, and more red tape. Investors are getting scared off because it takes forever to get anything approved!” 

 

This reflects a growing perception that Brunei’s regulatory environment is not keeping up with the needs of modern businesses and is hindering potential growth. 

 

Beyond regulatory concerns, there are also complaints about inefficiencies within government agencies, particularly regarding tender processes. 

 

“My company has been waiting for a government tender decision for over a year and a half now for a relatively small and straightforward project,” one business owner shared online. 

 

Others reported similar experiences, with delays in decision-making causing projects to stall and leading to lost opportunities. Such challenges, if not addressed, may further deter potential investors from entering the market. 

 

The sectors hardest hit by the FDI decline include mining and quarrying —a key pillar of Brunei’s economy—which saw its foreign investments fall from BND 3.422 billion to BND 3.069 billion in the first quarter of 2024. 

 

The manufacturing sector, which Brunei has been trying to develop in recent years as part of its economic diversification efforts, also saw foreign investment drop, shrinking to BND 3.065 billion from BND 3.444 billion. 

 

These industries are crucial for Brunei’s economic stability, and their struggles reflect broader concerns about the country’s long-term economic health. 

 

Despite these challenges, there are still some positive signs. Hong Kong remains a key foreign investor, contributing BND 2.154 billion to Brunei’s FDI stock, even as other regions, such as ASEAN and Europe, reduce their involvement. However, reliance on a small number of major investors leaves the economy vulnerable. 

 

One Bruneian commented, “If Hong Kong pulls out, we’re finished,” reflecting the anxiety that many feel about the country’s future. 

 

At the heart of the public’s concerns is a growing demand for reform. 

 

Citizens are calling for a reduction in red tape, faster decision-making, and greater transparency in government processes. 

 

Some have expressed doubts about whether these changes are possible within the current system, but there is still hope that improvements can be made. 

 

“This could be the wake-up call we need,” one optimistic commenter noted. 

 

“If we fix the system and make it easier to do business here, we could attract new industries and get back on track.” 

 

The question now is whether Brunei’s government can respond quickly enough to address these concerns and restore confidence in its ability to attract foreign investment. 

 

Without meaningful reforms, the country risks further alienating investors, making it harder to recover from this downturn. 

 

For now, the future remains uncertain, but with the right approach, Brunei may still be able to turn the tide and secure a more prosperous future for its people. (MHO/09/2024)

 

Brunei’s Retail Slump Boosts Malaysia’s Economy

BANDAR SERI BEGAWAN, SEPTEMBER 2024: While Brunei’s retailers are left counting their losses, businesses in neighbouring Sarawak and Sabah are laughing all the way to the bank, thanks to a surge in spending from Bruneians crossing the border. 

 

The latest report from Brunei’s Department of Economic Planning and Statistics (DEPS) paints a sobering picture of falling retail sales, but there’s an elephant in the room that wasn’t addressed: the billion-dollar leak as Bruneians flock to Malaysia for better deals.

 

In the second quarter of 2024, Brunei’s retail sector experienced a 6.1% drop in sales, with revenue shrinking from BND 446.1 million in Q2 2023 to BND 418.9 million. 

 

Sales volume also fell by 5.9%, signalling a widespread reduction in domestic consumer spending. 

 

Key categories like furniture, household equipment, and electrical appliances were hit hardest, with furniture sales dropping by a staggering 19%. 

 

The DEPS report attributes these declines to reduced consumer demand, but many on the ground believe the real issue goes unmentioned — Brunei’s billion-dollar cross-border shopping habit.

 

For years, Bruneians have crossed into Miri and Kota Kinabalu in search of better prices and wider product variety. 

 

The favourable exchange rate and lower costs for everything from groceries to clothes have made Malaysia an irresistible shopping destination. 

 

Before the pandemic, Bruneians made over two million trips to Malaysia in 2019, and as restrictions eased, the trend returned in full force. In 2023 alone, 1.57 million trips were made across the border. 

 

Though the DEPS report doesn’t address this directly, the economic impact is undeniable. 

 

Sarawak has been one of the biggest beneficiaries. In January 2024 alone, Sarawak received 350,000 tourists, bringing in RM 900 million in revenue, a large chunk of which came from Bruneians. 

 

As businesses in Miri thrive, Bruneian retailers are struggling to compete. Supermarkets saw a 6.9% drop in sales, while department stores faced a 6.0% decline. For many local shop owners, the cross-border drain is impossible to ignore. 

 

“We just can’t compete with Miri’s prices,” lamented one shopkeeper. “Why would people spend here when they can get the same products for much less in Malaysia?”

 

The problem isn’t limited to retail alone. Brunei’s food and beverage sector is also feeling the pinch. Revenue fell by 1.0% in Q2 2024 compared to the previous year, with fast food outlets seeing a 3.2% drop and restaurants experiencing a 1.5% decline. 

 

While the DEPS report attributes this to reduced local demand, many Bruneians are opting to dine out in Malaysia, where food is often cheaper and the variety more appealing.

 

For many Bruneians, cross-border shopping and dining aren’t just about saving money — it’s about access to better quality goods and services. 

 

“The price difference is huge,” says a regular shopper from Brunei. 

 

“I can get everything I need in Miri for a fraction of what I’d pay back home. Why wouldn’t I go?” 

 

This sentiment reflects a broader issue facing Brunei’s retail landscape: the inability to compete with Malaysia on price, variety, and experience.

 

This cross-border drain is not just an annoyance for local businesses; it poses a serious threat to Brunei’s long-term economic ambitions. 

 

The country’s Wawasan 2035 vision aims to diversify the economy and reduce reliance on oil and gas, but the outflow of billions in consumer spending to Malaysia is undermining these efforts. 

 

A recent policy brief by Associate Professor Dr Khalid Ahmed from the Institute of Policy Studies at Universiti Brunei Darussalam, titled "Cross-Border Cash Drain," estimates that Brunei is losing over BND 1 billion annually due to cross-border shopping. 

 

That’s BND 1 billion that could be circulating within Brunei’s economy, supporting local businesses and creating jobs. Instead, it’s filling the pockets of retailers in Sarawak and Sabah, leaving Brunei to wonder how it can stem the tide.

 

As Sarawak’s economy booms — with its tourism industry employing nearly 20% of its population — Brunei’s businesses are left asking how they can keep their customers at home. 

 

Without intervention, the cross-border leak will continue to threaten the country’s economic stability, particularly as it strives to diversify and grow beyond its reliance on oil and gas.

 

So what can be done? 

 

Some experts believe that lowering shop rents and introducing incentives for local businesses could help make Brunei more competitive. 

 

Others suggest that expanding the variety of goods and services available locally is key to keeping Bruneians from crossing the border. 

“It’s not just about price,” says one economic analyst. “Bruneians want options. If we can’t offer them that, we’ll keep losing customers to Malaysia.”

 

At the heart of the issue is the question of national pride and economic self-reliance. 

 

As Brunei pushes towards Wawasan 2035, supporting local businesses has never been more important. Yet, the allure of cheaper prices and more choices across the border remains strong, pulling Bruneians away from their markets. 

 

In the end, the billion-dollar question is this: can Brunei plug the leak? 

 

As retailers struggle and cross-border spending continues to rise, the future of the country’s economy could depend on how quickly and effectively this issue is addressed. 

 

The next few quarters will be crucial in determining whether Brunei can find a way to reinvigorate its retail sector and keep its wealth at home or whether its neighbours will continue to prosper at its expense. (MHO/09/2024)

Economic Growth or Social Harmony: What Will Define Brunei’s Future?

As Brunei races toward its Wawasan 2035 vision, are we too focused on economic growth while ignoring deeper challenges that threaten our future? Beneath the surface of progress lies a hidden iceberg of social issues—poverty, corruption, and rising crime—that could derail the nation’s ambitions. Can the spiritual and ethical foundations of *Melayu Islam Beraja* and *Negara Zikir* guide Brunei toward a more balanced and just society, or will we miss the mark on genuine development? Explore the complexities of Brunei's future in this analysis. MHO

 

 

BANDAR SERI BEGAWAN, SEPTEMBER 2024: As Brunei forges ahead with its Wawasan 2035 vision, the nation’s path to sustainable progress rests on two fundamental concepts: Melayu Islam Beraja (MIB) and Negara Zikir. 

 

These guiding philosophies aim to balance the country’s spiritual and material development. 

 

However, the journey toward achieving this ambitious vision is fraught with challenges. From rising crime, unemployment, and mental health issues to deep-seated problems like poverty and corruption, Brunei faces a reality that necessitates more than just economic growth to achieve national success. 

 

A recent analysis from the Fakulti Usuluddin at Universiti Islam Sultan Sharif Ali, led by Rasinah Ahim, emphasises the importance of Negara Zikir as a philosophy that not only strengthens national stability but also reinforces the principles of MIB in governance. 

 

Yet, challenges in translating these ideals into practical policies become apparent as Brunei confronts social, economic, and administrative hurdles. 

 

The central question emerges: how effectively have MIB and Negara Zikir been integrated into governance and policy to address Brunei's pressing social issues?

 

An Iceberg of Challenges: Beyond Economic Metrics

 

In a decade-old video recording from a workshop on Wawasan 2035, a Bruneian government official offered a striking analogy, comparing the vision to an iceberg. 

 

The visible tip represents Brunei's economic ambitions—GDP growth and infrastructure development—but beneath the surface lie the more profound challenges of governance, societal well-being, and spiritual alignment with Islamic values. 

 

The official, who had only recently learned about these concepts despite not being Muslim, questioned whether Brunei's focus on economic metrics overshadowed the deeper values of Maqasid Syariah. 

 

This Islamic governance framework emphasises the protection of five essential elements: faith (din), life (nafs), intellect (aql), lineage (nasl), and wealth (mal). 

 

His reflections remain relevant today, as these core elements are critical to ensuring the holistic development of a nation beyond mere financial prosperity. 

 

For example, Brunei’s growing social issues—such as rising divorce rates, poverty, school dropouts, and unemployment—signal that the balance between material progress and societal well-being remains off-kilter. 

Divorce rates alone surged from 588 in 2022 to 735 in 2023, underscoring the stress on families and raising questions about the protection of lineage (nasl), a key goal of Maqasid Syariah.

 

Meanwhile, school dropouts and mental health issues among youth suggest gaps in safeguarding intellect (aql).

 

Measuring Progress: Is GDP the Right Metric? 

 

One of the key insights from the video and other reflections on Brunei’s development is the question of whether GDP is an adequate measure of national progress. 

 

The official noted that Bhutan, a small Himalayan nation, has adopted a different approach: using a Happiness Index to measure success rather than GDP alone. 

 

This index focuses on the well-being and happiness of its citizens, ensuring that economic growth does not come at the cost of social and spiritual fulfilment. 

 

Bhutan’s Gross National Happiness (GNH) index measures nine domains: psychological well-being, health, education, time use, cultural diversity, good governance, community vitality, ecological diversity, and living standards. 

 

This holistic approach ensures that national policies serve not only economic needs but also cultural, environmental, and social objectives. 

 

Similarly, Brunei’s guiding principles, particularly those embedded in Negara Zikir and MIB, offer an opportunity to rethink how the country measures its success. 

 

As Rasinah Ahim’s paper suggests, Brunei’s focus should be on developing a “Zikir Nation” where spiritual and material well-being is balanced. 

 

This philosophy calls for a holistic view of progress—one that goes beyond the surface of economic development and delves deeper into the nation's core values of Islamic ethics, environmental stewardship, and social harmony.

 

Corruption and Governance: A Tarnished Administration

 

Compounding Brunei’s challenges is the issue of corruption within its administration. 

 

Despite ranking second in the ASEAN region in corruption indices—behind only Singapore—Brunei has not escaped the negative impact of corruption. 

 

Since the Anti-Corruption Bureau (ACB) was established in 1982, 2,469 cases of alleged corruption have been investigated, leading to 284 individuals being brought to court and 231 convicted of offences such as bribery, criminal breach of trust, and submitting false financial claims. 

Beyond criminal charges, 260 public servants have faced administrative punishments for abusing their positions for personal gain or favouritism. 

 

These instances of corruption undermine public trust and stall the very policies that aim to build a prosperous and ethical nation. 

 

Tackling corruption and the abuse of power is critical to realising the full potential of Wawasan 2035 and ensuring that it aligns with the country's spiritual aspirations.

 

Poverty: The Hidden Struggle in a Wealthy Nation

 

While Brunei is often perceived as a wealthy nation, the reality of poverty in the country presents a different picture. Brunei ranks 11th out of 78 countries in terms of the percentage of its population living in poverty, with a staggering 43.7% living below the poverty line. 

 

In 2012, over 20,790 individuals, or more than 5% of the population, were reported to be living in poverty. 

 

This stark reality highlights the gaps in Brunei's wealth distribution systems and raises questions about whether the nation’s policies, rooted in the principles of Negara Zikir and MIB, are being implemented effectively to address economic inequality. 

 

Poverty, along with rising crime and unemployment, threatens the nation’s stability and contradicts the Maqasid goal of protecting wealth (mal). 

 

Crime, Poverty, and Social Stability: An Emerging Concern 

 

In addition to poverty, crime remains an issue that tests the resilience of Brunei's social fabric. 

 

Data from the Royal Brunei Police Force and the Narcotics Control Bureau show fluctuating crime rates across categories. For instance, offences against persons—such as those harming individuals' physical or emotional well-being—reached 511 cases in 2023. 

 

Meanwhile, property crimes, although reduced from a peak of 3,854 in 2014 to 1,105 in 2022, continue to present challenges. 

 

More concerning is the rise in penal code offences, including cybercrime and fraud, which surged from 669 cases in 2012 to over 1,700 by 2023. 

 

This reflects not only local challenges but also global trends in technology-driven crimes. 

 

Drug-related offences have also seen a resurgence, with 2,161 cases reported in 2023, underscoring the need for stronger enforcement and rehabilitation efforts. 

 

These crime trends, coupled with issues such as poverty, school dropouts, unemployment, and mental health challenges, test the stability that MIB and Negara Zikir aim to protect. They highlight the need for governance that not only addresses economic progress but also tackles the root causes of crime, corruption, and social instability.

 

Bridging the Gap: Policy and Implementation 

 

The heart of the issue is not that Brunei lacks the values or philosophies to guide it forward. 

 

MIB and Negara Zikir are well-established as cornerstones of the nation's governance framework. 

 

However, the challenge lies in translating these ideals into actionable policies and implementing them effectively. 

 

Inefficiencies in Brunei’s zakat management and welfare systems are key examples. 

 

Zakat, designed to redistribute wealth and promote social equity, often fails to reach those most in need due to administrative delays. 

 

Similarly, the welfare system, while well-structured, struggles to provide timely assistance to the vulnerable. 

 

These systemic issues have persisted over the years, as highlighted in a 2020 workshop led by Professor Amin Abdul Aziz at Universiti Brunei Darussalam, where it was emphasised that execution, not philosophy, remains the primary challenge. 

 

Additionally, strengthening oversight and improving transparency in these systems could help ensure that the principles of Maqasid Syariah—particularly the protection of wealth (*mal*) and the well-being of society—are fully realised.

 

Moving Forward: A Balanced Approach for Wawasan 2035 

 

As Brunei continues its march toward Wawasan 2035, the nation must recalibrate its approach to balance spiritual well-being with material advancement. 

 

The reflections of officials, captured on video a decade ago, remind us that the real mission lies not just in economic growth but in creating a just and equitable society that aligns with Brunei’s Islamic values. 

 

Corruption must be rooted out, poverty alleviated, and social services strengthened to ensure that all citizens benefit from the nation’s development. 

 

Only then can Brunei fulfil the true aspirations of Wawasan 2035, building a nation that is both prosperous and blessed with spiritual harmony. 

 

Brunei’s future rests on its ability to bridge the gap between policy and practice, between tradition and modernity. To fully realise its vision, the nation must commit to strengthening its governance frameworks, prioritising the well-being of its people, and upholding the values that form the very foundation of its identity. (MHO/09/2024)

  

In a nutshell:

• Wawasan 2035 is Brunei’s goal for national prosperity, focusing on economic growth and development.

• The vision is built on Melayu Islam Beraja (MIB) and Negara Zikir, aiming to balance spiritual well-being, social harmony, and material advancement.

• However, Brunei faces challenges: rising crime, poverty, unemployment, school dropouts, and mental health issues.

• Corruption remains a critical issue, with over 2,469 cases investigated since 1982, undermining governance and public trust. 

• The article questions whether GDP is the right measure for progress, suggesting that Brunei could benefit from adopting Bhutan’s Happiness Index to prioritise well-being and social equity.

• Maqasid Syariah offers a holistic framework for governance, focusing on the protection of faith, life, intellect, lineage, and wealth—essential for true progress.

• Zakat and welfare systems face inefficiencies, with delays and mismanagement preventing wealth redistribution from reaching those in need.

• To fulfil Wawasan 2035, Brunei must address corruption, improve governance, and ensure social harmony while balancing material and spiritual progress.