Wednesday, May 28, 2014

13th Joint Defence Commission Brunei and United Kingdom

BOLKIAH GARRISON, Wednesday 7 May 2014 - The 13th Joint Defence Commission (JDC) Meeting between Brunei Darussalam and United Kingdom was held today at the Officers' Mess, Bolkiah Garrison, Ministry of Defence, Brunei Darussalam.

The JDC was established through the Memorandum of Understanding on the establishment of a Joint Commission on Defence Cooperation which was signed by both countries on 31 December 2002.

The Meeting was co-chaired by Acting Director of Defence Policy, Haji Adi Ihram bin DP Haji Mahmud, Ministry of Defence, Brunei Darussalam and Mr Jon Chorley, Deputy Head (Asia Pacific), International Policy and Planning, Ministry of Defence, United Kingdom.

At the meeting, both sides reaffirmed their commitments to further strengthen their defence ties. A wide range of bilateral matters was discussed, including bilateral exercises, training, as well as exchange of views on issues of mutual interests.

The next JDC Meeting is expected to be held in United Kingdom in 2015.

Saturday, May 10, 2014

Brunei to Increase Oil an Gas Production

The Oxford Business Group on 24 April 2014 reported the following economic update:


Economic Update
Brunei Darussalam set to increase oil and gas production

Asia | 24 Apr 2014

Although declining oil production has had an effect on Brunei Darussalam’s recent economic performance, officials insist the reasons for the drop are short term in nature, while the country’s long-term prospects in the sector remain promising. Expansive government plans at home and a cooperation agreement with Timor-Leste abroad should give the sector a welcome fillip as well.

Because Brunei Darussalam is a major energy producer, the hydrocarbons segment has a pronounced impact on the performance of the overall economy. Due to the effects of the drop in oil production and the resulting 7.7% decline in the energy sector in 2013, GDP is estimated to have contracted by 1.4% during the year, following growth of 0.9% in 2012.

Lower production levels resulted in Brunei Darussalam’s crude oil exports falling by 34% in November 2013 year-on-year, according to statistics from the Department of Economic Planning and Development. Figures from the UN’s International Merchandise Trade Statistics indicated that crude oil exports in November 2013 were valued at BN$408.7m ($321.85m), down from BN$623.6m ($491.09m) during the same month the previous year.

The effect on the budget was dramatic. “Following a decline in the average price of oil caused by the global economic crisis and the level of oil production in the 2012/13 financial year, the government’s fiscal balance has been affected… it has declined to 20.4% of GDP, compared to 26.9% of GDP in previous financial year,” said Pehin Dato Abd Rahman Ibrahim, minister of finance II.

According to Pehin Dato Hj Mohd Yasmin, the minister of energy, however, the 7.7% decline in the sector in 2013 was temporary and the result of maintenance work at the oil refinery and offshore platforms. “We are doing a lot of rejuvenating of the offshore platforms. The process is going on, but give it another year or two years and we’ll be back,” the minister said.

Long-term vision

Despite the recent drop in output, Brunei Darussalam has long-term plans to boost investment and production in the sector. The government’s recently released Energy White Paper, launched at the Energy Week Exhibition 2014 in late March, lays out several key goals, including a target of attracting $70bn-80bn in international investment by 2035. This increased investment will be a central part of efforts to boost the amount of goods and services provided to the energy sector by local companies, from $400m in 2010 to $7bn by that year. The government’s plan would see the total annual investment doubled from current levels, to around $4bn.

Moreover, the cumulative investment is expected to dramatically boost employment in the energy sector, to an estimated 30,000 people by 2017 and 50,000 in 2035, up from 20,000 in 2010. In line with this, a new book aimed at Brunei Darussalam’s youth was also launched at the Energy Exhibition 2014, which focuses on promoting careers in the energy sector. Support services, another source of employment for nationals, will get a boost too, with the Energy White Paper setting a target of reaching 50% local content for goods and services to the energy sector by 2017 and 80% by 2035.

Reserves look set to rise as well, and production in line with them. According to the Energy White Paper, new reserves totaling 3.5bn barrels will be added by 2035. Pehin Dato Hj Mohd Yasmin said the government aims to boost production levels from the current 372,000 barrels of oil equivalent per day (boepd) – roughly 40% oil and 60% gas – to 430,000 boepd by 2017 and 650,000 boepd by 2035.

New partnerships

Meanwhile, nearby Timor-Leste has reached out to Brunei Darussalam for expertise and support. Timor-Leste has a $15bn petroleum fund and is now seeking partnerships to develop oil refineries and a liquefied natural gas plant.

The anticipated synergies between the two countries – in terms of the provision of facilities and expertise – are expected to provide Brunei Darussalam with ongoing opportunities overseas, even as it works to expand investment, production and employment in the sector domestically.

Courtesy of Oxford Business Group


Friday, May 09, 2014

US Government and Brunei

The Malaysia Chronicle on 7th May 2014 reported about this:


US concerned about Brunei's hudud law but won't BOYCOTT Sultan's luxury hotel chain

WASHINGTON - The United States has raised concerns with Brunei about a new penal code introduced by the sultan which would include Islamic sharia law penalties such as stoning to death, US officials said Tuesday.

But the State Department is not following a growing boycott of a luxury hotel chain linked to all-powerful Sultan Hassanal Bolkiah.

"Our ambassador has relayed our concerns privately to the government of Brunei," State Department spokeswoman Jen Psaki told reporters.

But she said the department did not "take a position on" the boycott, which has seen a growing list of celebrities spurn the luxury Dorchester Collection.

"It's our understanding that the boycott specifically targets the Dorchester Collection of hotels which issued a statement that it does not tolerate any forms of discrimination of any kind," Psaki said.

"As such, the State Department has no specific restrictions prohibiting an employee from staying in a Dorchester hotel."

Oil-rich Brunei's new penal code, which will eventually include tough Islamic sharia penalties such as severing of limbs and death by stoning, was due to officially come into effect on Thursday.

The initial phase beginning then introduces fines or jail terms for offenses including indecent behavior, failure to attend Friday prayers and out-of-wedlock pregnancies.

A second phase covering crimes such as theft and robbery is to start later this year, involving more stringent penalties such as severing of limbs and flogging.

Late next year, punishments such as death by stoning for offenses including sodomy and adultery will be introduced.

US television star Jay Leno on Monday joined a growing list of celebrities vowing to boycott the hotel chain, along with comedian Stephen Fry, TV host Sharon Osbourne and comedian Ellen DeGeneres.

The Dorchester Collection is reportedly owned by the Brunei Investment Agency, a sovereign wealth fund under the oil-rich sultanate's Ministry of Finance. – AFP

Full article:

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Thursday, May 08, 2014

Business Friendly Budget for Brunei

The Oxford Business Group reported the following on Brunei in their 22nd April 2014 economic update:


Economic Update
Brunei Darussalam rolls out a business-friendly budget

Asia | 22 Apr 2014

The 2014/15 budget for Brunei Darussalam, which came into effect on April 1, has a strong business focus, seeking to promote investment, stimulate and support private sector growth, and help provide the tools and skills needed to sustain economic development and diversity.

While the budget ratified by the Legislative Council (LegCo) on March 22 maintains high levels of spending on social welfare and community development programmes, with health, housing and education among the major recipients of funding, there were also a number of provisions aimed at boosting private sector activity.

Business opportunities from development plan

When tabling the draft budget on March 10, Haji Abdul Rahman Haji Ibrahim, the second minister of finance, told the LegCo the focus was enhancing education and training; stimulating investment and private sector growth; increasing economic productivity; and ensuring social welfare. The government’s theme for the forthcoming fiscal year was “generating economic growth, establishing job opportunities”, he said, underscoring the document’s business-friendly emphasis.

The budget is intended to assist the private sector in maintaining the momentum it had in 2013, when it expanded by 3.8%, above the 3.2% growth in the public sector, Haji Abdul Rahman said. Among the leading non-oil contributors to economy last year were business services, retail, construction and finance.

In total, the budget set out spending of BN$5.98bn ($4.68bn) for the year, up 10.1% from 2013/14. With projected revenue of BN$6.6bn ($5.2bn), Brunei Darussalam is expected to see a modest surplus, in part driven by higher energy earnings, as well as private sector growth and consumption.

Around BN$1.15bn ($900.3m) of the budget’s spending will be allocated as part of the 10th National Development Plan, channelled towards projects across the utilities, transportation, communication, industrial and trade sectors. The private sector is expected to be one of the major beneficiaries of these investments, both as an end-user of improved services and through the opportunity to bid for government contracts related to the range of projects being rolled out.

Increased spending on technology, vocational education, and research and development will also likely have a positive effect on businesses.

Incentives for growth and investment

There were other inducements in the budget for companies, with the announcement that the corporate tax rate would be reduced from 20% to 18.5% by 2015, a move aimed at bolstering investment and making the economy more competitive. Other incentives for the corporate sector include the lowering of taxes on profits below $250,000 and changes to the requirements for bank guarantees or performance bonds for construction or service contracts.

Raising the country’s investment appeal was also a keystone in the budget, with Haji Abdul Rahman telling representatives of the LegCo that promoting business and investment activities was a priority for the government as it sought to reduce the economy’s dependence on hydrocarbons. “Efforts will be intensified to attract foreign and domestic investment to spur economic growth as it will have a positive social impact, particularly in creating job opportunities for local youth,” he said during his budget address on March 11.

Through programmes such as the Strategic Development Capital Fund, a government trust fund that provides equity financing for local development projects, the country is willing to share risk with foreign investors, Haji Abdul Rahman said.

It will take time for some of the benefits contained within the budget to be fully felt by the business community, such as the amended tax provisions and the projected improvements in utilities and services. Other provisions, such as higher development spending, will have a more immediate impact as funds flow into the economy.


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