Brunei’s regional multilateral relations

Brunei gained its independence from the United Kingdom on 1 January 1984, and experienced phenomenal growth during the 90s and 2000s, developing its wealth from extensive petroleum and natural gas fields and according the IMF Brunei has the world’s fourth biggest GDP per capita (purchasing power parity). Due to political stability and a small population, Brunei’s headlines are mostly related with the Sultanate, Oil & Gas or the introduction of Sharia law in 2014. Could you describe for us the culture, ideology and values of The Nation of Brunei? 

Brunei is an old kingdom. It has existed as a Malay kingdom from the 14th century onwards and His Majesty is the 29th in line of the succession of the dynasty. But, Islam also came in the 14th century, so we trace his descent from the first Islamic ruler. We have a tradition that goes back many centuries. This is why Monarchy still plays a very important part in our life here, because it´s a long tradition.

Secondly the introduction of Islam as I said, to Brunei in the 14th century onward, gave us that religious anchor for Brunei. The Malay race, the Malay population, is the dominant ethnic group. So, you have this combination of the three, and the essence of the three is an emphasis on tolerance, friendship and on good neighbourliness. This has been going on as I said, for centuries, it is not something new, it is continuing. That provides the stability for us. Also, the political system, living in harmony as a community and being small, makes it much easier. So that provides the basis for us to live harmoniously in Brunei. There is no magic wand, but it has been handed down from memorial times.

The centrality of understanding, of tolerance and of being friendly, are the key elements to achieve a peaceful climate in any part of the world. But, that is the missing bit I think, in many of the societies that we live in. So those are sort of the underpinnings of the culture, the religious and the kind of government that we have. That is the way we operate and we are lucky enough we have stability since then.

ASEAN is celebrating this 2017 its golden Jubilee, and has since 1967 grown to become a 10-member state organization, with Brunei joining early after its independence in 1984. December 31^st of 2015 saw the official launch of the ASEAN Economic Community, a major milestone in the regional economic integration agenda of ASEAN. How would you assess the integration of the member states?

The launch of the ASEAN Community in 2015, covered the three pillars: economic, political and social. Have we achieved integration? That’s what we hope, but as usual you have an aspiration, we are not perfect yet. Politically, we are not a community in that sense, because we are still far from it and I think we are working towards it, but having a common political group is not easy. In the EU, they have a political community, but then there are some problems arising now. So, we believe that this process will be very slow, but we aspire to be a community.

Could you describe the importance of the ASEAN+3 (China, Japan & South Korea) and more specifically the role of Japan through institution such as JICA?

The Plus Three, integrate the world’s second and third largest economies. When combined, plus South Korea, you have a very big, strong and interesting economy – if you can get them together, which it is very difficult as they have their own political problems.

It is a very strong organization, if you have the Plus Three, which is the trilateral group. Economically and politically they are very strong, but they don’t get on with everyone. In a sense, we are also competing here, but we want everybody to work together so we are engaging them, providing them with a platform and meeting them as they come to the ASEAN region. The three of them are very good partners and we want to work with them. Really the potential is great, but for political reasons, it is not fulfilling its potential.

Due to a decreasing demographic and an aging population, the Japanese private sector has been promoting a strong internalization process. Following this, a big share of Japanese companies have increased their investments levels in the ASEAN, particularly in manufacturing bases, to become more competitive globally. What are in your opinion the main opportunities for the Japanese private sector in Brunei?

If you look at Japan from the 60s, 70s and 80s, I would say that during those three decades, Japan’s technology and economy, was the one that really provided the spur for the industrialization process in South-East Asia.

During those three decades, Japan was responsible for the miracle that we had in terms of industrialization, because they were the spur. But of course now, the Chinese era, is coming in, so there is competition between both of them. The Japanese at the moment I would say, have still got, the competitive edge, in the sense of cutting-edge technology.

So, the Japanese are still there, they are still a very good competitor and still contributing a lot, as I said, in healthcare and everything. So, I don’t see them being played out, but the Chinese are coming in very strongly. They provide funding for infrastructure, for their silk road belt. They are competing with each other, which is good for all of us. At least we have two sources of funding. But as I said, the Japanese had their time, their three decades, the Chinese are now. Next after the Chinese, we don’t know. It maybe Indonesia then.

Recent economic developments in Brunei have re-emphasized the need for structural reform policies towards a more diversified and competitive economy. The Government of Brunei has recently intensified its reform efforts to spur the private sector’s role in the economy with the end objective of diversifying its export-based product and services. How competitive is Brunei as an exporting country? Which sectors and products would you highlight as the most competitive?

Diversification is very important, because we have been very dependent on oil and gas for the last 50 years. But oil and gas maybe completely useless in five or ten years when you have hydrogen and other alternatives. So we have to look at how we diversify the economy, because we are too dependent on it. They are looking at several sectors, one is tourism. The other one is the downstream sector in the oil and gas, like methanol and from methanol we have the derivatives and refinery. If we look at Singapore, they don’t have oil and gas, but they got one of the biggest refineries in the world. Maybe we could try our luck.

We are also looking at the Halal industry. They are also looking at some of the creative industries. So they are quite a lot of possibilities and here we can even look at education, we can look at health, but mainly they are focusing on tourism, the Halal market and the down streaming of the oil and gas industry. Those are the main three.

Why would you encourage, in this case, Japanese investors to invest in a country like Brunei and how would you like the Japanese to proceed in a market like Brunei?

The Japanese have been here for more than 50 years. They started with Mitsubishi, they were one of our partners for Brunei Liquefied Natural Gas 48 years ago. We developed the technology, which is cutting edge technology. We were able to liquefy the gas and export it, before anyone else.

The Japanese have been here since then, and we are hoping we can at least get something from their presence here.