The government commitment towards economic diversification should be lauded. Great efforts had been put in by the government in achieving the diversification as stated in the article. Kudos must be the order of the day. But then again, one can not wondering if all those efforts had bear any fruits? Seriously when Brunei Darussalam embarks 2035 vision in 2007, if not mistaken, that vision call for a 6% GDP growth each year. Now it is 2014, 7 years later, that 6% growth is nowhere to be seen. Not even a glimmer. So what had happen? For a country that does not have a trade deficit, have B$700 million of public debt, runs budget surplus year in and year out and yet failed to achieve that 6% growth! Where did Brunei Darussalam had gone wrong? Thus, what had been mentioned in the article - Could it be Brunei Darussalam had been subscribing to a wrong economic formula? For 7 years, the country had been trying to achieve that elusive 6% growth. But what had been seen, the same economic formula been subscribe but hoping to achieve different result each year. Is that not insane?! Lets start with the national budget. Each year the budget had incremental increase. Roughly Brunei Darussalam set about B$5~6 billion each year. And each time the country expect 5~6% GDP rise. Did it happen? No. It didnt. The most the country can achieve roughly 3% or less. Looking it, if B$5 billion can only achieve 3% GDP growth, would not doubling the state budget achieve 6% growth? Or could it be Brunei Darussalam need to spend at least B$40 billion to achieve 6% GDP growth as stated by the Minister of Energy sometime this year?! Foreign Direct Investment (FDI) If someone had been following the world news, FDIs are seem to be holy grail in spurring a country growth. Everywhere people talk about the need for FDI. IMF, ADB, World Bank and many financial institution and think-tanks subscribe to such mantra. Brunei Darussalam is no exception. It had been said that Brunei Darussalam need B$70-80 billion in cumulative FDI between 2011 to 2035 to achieve the target GDP growth. Is it? Is FDI the key to Brunei Darussalam prosperity? 40 odd years ago, August 15, 1971 to be exact, President Nixon abandoned the gold standard. Since then the world had been operating on FIAT monetary regime. In fact the last country to abandon the gold standard was the Swiss in May 2000. Now since Brunei Darussalam is on FIAT, why does she needs other people money? Is Brunei dollar not good enough for the country to invest in her own back yard? Seriously cant Brunei create B$70-80 of her own money to spur her economic growth and achieve 6% GDP target? If Brunei money is no good for the country then where is BIA? If BIA can invest in UK, Malaysia, US, France and etc why cant BIA invest in Brunei Darussalam? Seriously, there had been no mentioned of BIA investment in the country except for Armanda Properties. Seem to remember the Minister of Energy wanting B$2billion from BSJV annual B$2-3 billion spending to be retained in the country. If that call can be made, then BIA can do the same. This write up is not to criticize but to open up people minds of other possibilities. By definition, Brunei Darussalam is a monetarily sovereign nation. She create and manage her own currency. As long as there are services and goods can be bought in her currency then Brunei Darussalam can achieve her 2035 vision in much shorter time period.
Posted on: Mon, 29 Dec 2014 14:23:32 +0000
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