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‘The country is moving in the right direction with a clear plan’

Interview - December 19, 2017

Standard Chartered Bank has been present in Brunei for almost 60 years. CEO Mr. Anirvan Ghosh gives his unique insight into the Bruneian economy, discussing its competitive advantages for foreign investors, as well as challenges to overcome


Brunei’s economy has suffered as a result of the oil price crisis. As a result, the government is pushing forward with its agenda to diversify the economy – implementing various initiatives such as the development of SMEs and reform of the investment climate. In this regard, what are the crucial sectors that the government should focus on in order to attract the international community? What specific role does Standard Chartered play in this process?

First, let us talk about Standard Chartered Bank (SCB). While we are called a foreign Bank in Brunei, we will complete 60 years of being in Brunei next year and this has given us an incredibly deep local knowledge. We have been established in Brunei since 1958 which is longer than the time Brunei has been independent. Our biggest strength as a Bank is our network across Asia, Africa and the Middle East. Take Japan as an example, we have a large Corporate Banking presence. In Japan, Standard Chartered Bank has been operating for approximately 60 to 70 years and actively promotes the Japan trade corridors into most of the emerging markets where we are present.

Now, let us take a look at our role in ASEAN and South Asia. If you look at Japan-India, Japan-Vietnam, and Japan-Thailand economic corridors, Standard Chartered Bank’s presence allows the Bank to play a big role. We have played a very significant role in taking several large Japanese companies into countries like India and we have done the same with Korea and markets such as Thailand.

As you have mentioned on Japanese investments, for any Japanese Conglomerates coming into Brunei, we are naturally placed given our presence both in Japan and in Brunei being the only international bank in the country. This is an advantage which SCB has in most markets. In Brunei, we are a relatively large bank and have significant market shares both in retail and corporate.

As mentioned given SCB’s strength in its network, most of oil & gas industry’s multinational corporations in Brunei bank with us, given our presence in the markets these companies are present in.

Regarding Japanese investments, which are significant in this part of the world, there are several large investments by Japanese companies in markets such as in the Philippines where infrastructure projects are being looked at. With China and Chinese corporations, their strategy is unique, and they have strong track record of investments in this region. Brunei is now part of the Belt and Road strategy and is seeing its share of interest and investments coming in from China, again, this is an area where SCB can play a lead role.

Brunei has a long trading history with Japan. If you look at the country’s trading partners, Japan is actually its largest export partner—accounting for almost 40% of Brunei’s exports, largely liquefied natural gas. On your point of competitiveness with Japanese Banks, the Japanese Banks are extremely liquid and have been increasing their network in this region. We are competing but playing to our strengths which is primarily our deep local knowledge and our network presence. 

It is not fair to compare Brunei with its neighbours like Vietnam and the Philippines, which have large young population with a significant middle class market, consumption and GDP growing at 6-7% with large infrastructure requirements. Brunei has a small population of 420,000 people and has its own unique advantage; one of it is the strong focus on diversifying its economy.

The Government in Brunei is extremely focused in pushing the agenda on diversification and uses Brunei’s strategic location in the region. As a Bank we are seeing the push given our participation in some of key sectors. The four key sectors that are being fostered are tourism, logistics, ICT, and making a Brunei a hub for “halal” food. If you look at the food sector, for example the halal food concept, “Made in Brunei” as a brand is gaining ground. Halal food as a concept is also growing with exports increasing of these items to even countries like China.

For Brunei, tourism does not mean the same models as more competitive markets like Thailand in the region. Brunei is a small country, it has its own unique offerings and is focused on promoting tourism playing to its strength and the natural beauty the country has to offer. One good example is the country’s national carrier, which is currently trying to position itself as a boutique airline in this market. They have a relatively new expanding fleet with new routes and they are an efficient airline. RBA is now targeting the transit traffic, the Tourism Department is positioning Brunei’s eco diversity its rainforests as an attraction for a specific kind of traveller. Ease of travel into Brunei is something which is also being highlighted with an efficient airport. The push on developing tourism is very strong, Brunei does have very strong competition in the region and will not be able to attract all kinds of global travellers but is capitalising on some of the opportunities it provides. Efforts include the very successful chartered flights from Korea into Brunei every week bringing golfers to come and spend a golfing weekend in Brunei. As tourism grows in Brunei it will lead to foreign exchange coming in and activities like shopping by tourists. Local employment will also get a boost.

Logistics is another area of opportunity. The Brunei International Airport is efficient and modern but has the advantage of less traffic and easy landing rights. There are opportunities to develop the area around the airport into a logistics hub for the region. What currently exists is the infrastructure that will be able to support this opportunity. Technically the country has seen a recession while the oil prices have remained but the reliance on the Oil and Gas sector will not change overnight for Brunei.

The government is now trying to create a special economic zone that will have a ripple effect and provide a tremendous boost to the local economy. We are talking about jobs creation, hotels, schools, shopping centres all around one zone which has an immediate effect on the local market.

There is a lot going on at this moment and the country is moving in the right direction with a clear plan till 2035, which they call the ‘Wawasan 2035’, or ‘Vision 2035’. On the back of these plans, Brunei is blessed with a very sound financial sector. We do not have the challenges which the industry has faced in other parts of the world mainly around capital and liquidity. We also have a very well regulated banking sector in Brunei. Given the size of the population, the growth within the industry is somewhat restricted; however the set up of an SME Bank and the push towards SME development will boost credit and growth in the overall sector. The regulator has been extremely proactive in providing regulations and has been very quick to change a lot of the regulations allowing banks flexibility in boosting its lending.

In addition to a strong financial system, Brunei is truly the abode of peace and probably the safest place in the region. I personally have not seen or heard of crime here. The crime rate is low; the standard of living is high, despite subsidies. Healthcare is free; education is free and the literacy rate is very high. Brunei has gained points on the ease of doing business and is attempting to reform its legislations and create a single window approach to attract FDIs.

I think the fundamental problem is that we need to promote Brunei as a destination and put it out on the map. Outside of ASEAN a lot of people do not know where Brunei is and that it is such a beautiful country with great infrastructure and high-quality living.


Based on our interview with the CEO of TelBru: he mentioned a few similar things to what you are saying. There seems to be a consensus that the infrastructures is here and the human capital is present. However, he was saying that there is just one thing that is missing in order for diversification to accelerate — that is the business competitiveness of Brunei as compared to other countries.  In this regard, how important is it for international firms to come to Brunei not necessarily to bring in money, rather to bring in more of the know-how, technology, and competitiveness to foster SMEs?

Brunei has to eventually adopt a similar strategy to somewhere like Singapore; the country will have to open itself up a bit more. More international names would mean competiveness and up skilling the local knowledge pool or work force. The recent investment and JV by a large German name, ThyssenKrupp, a fertiliser plant, is providing jobs and adding a boost to the businesses around Brunei. It is an example of how international names and FDI have a significant long-term effect in Brunei.

Human capital is a strength that Brunei has yet tap into. Bruneians are otherwise talented people, highly educated and the standard of English as a spoken language is high. This could be a centre in this part of the world where Brunei could be a destination for international universities to set up campuses. There is a need to cater to different geographic zones like Southeast Asia due to demand.

Brunei is a good place as a centre for education in the ASEAN. One of the advantages Brunei has is that it is a very safe country.

While there is constant talk about creating manufacturing, the human capital side of Brunei is something which hasn’t gotten the due attention it deserves. People here are literate, fluent in English, and the standard of living is very high. The country’s infrastructure is also very good.

For an international investor, initial concerns include security and safety, as well as corruption. Brunei does not have these issues and has good administrative machinery. There is an established hierarchy and the ministries are easily accessible and work gets done. The country is ready to now push for diversification and reforms. There is a strong banking system in place which is well regulated, these are the strengths of Brunei which the markets around us need to understand and know, within Brunei my sense is that people really do not know some of the strengths the country has and the opportunities it can offer.

Our role, as a Bank and one of the oldest companies in Brunei is to partner and work with our local peers. We want to play to our strengths, which is our network, and something local banks cannot provide. We also feel strategically placed to promote Brunei in our network; again this is a strength which we offer as the only international Bank in Brunei.  International Corporates operating or setting shop in Brunei allow SCB a natural advantage given the presence of these companies in the countries we already operate in. Our network and our expertise is our strength and an example of this are our operations in Brazil and Australia where despite not having a large high street presence we are a leading bank pushing business into our core markets to Africa, Asia and the Middle East both inbound and outbound.


Since you also have presence in Japan, we know that you can market it as a big manufacturing hub, offering excellent service to the rest of the ASEAN. Following this thought, what do you think are the biggest opportunities in Brunei specifically for the Japanese?

The biggest opportunity is still with the downstream oil and gas. Opportunities in infrastructure projects are limited; Brunei needs to adopt a PPP model gradually and with a Capital Market being set up it will make it more attractive to foreign investors. Moreover, the large-scale infrastructure projects have already been taken by some large Chinese and Korean contractors. So, as of now, the biggest opportunity is still downstream oil and gas besides the other four developing sectors: ICT, Logistics, Food and Tourism.


You mentioned earlier that there is one sector that is seldom talked about in Brunei—the ICT sector. Two of the best examples of countries involved in ICT, especially when in terms of BPO, are India and the Philippines. As for the latter example, that country has generated USD 24 billion in approximately five years. That amount is actually bigger than the entire GDP of the Philippines. In terms of moving towards a knowledge-based economy and towards developing real ICT, what is the potential of Brunei?

First, most countries acquire and build upon a specific knowledge skill set. There are countries that are more into accounting if they have a lot of accountants whether it is in practice or consultation, while others may look into providing legal services given the number of legal professionals in that country. As for Brunei, I do not see it becoming a call-centre hub or setting up a BPO industry immediately, countries like Philippines and India have tremendous scale both in terms of manpower, capacity and there is a cost arbitrage.  As we already know, Manila is now considered as the call centre capital of the world.

Education as a sector or centre and English proficiency are assets of Brunei’s working population. Again, look at the competitiveness on outsourcing or shared services in this part of the world. You have Manila, Kuala Lumpur, and Tianjin, as well as other centres in China and India who are big in the BPO outsourcing space. Brunei does have the skill and it has to be knowledge-based, and it can make use of its prime location in the ASEAN region. When it comes to Brunei’s potential in developing “real ICT” that would be in the infrastructure and the technical skill of the country.

When it comes to ICT, the beauty of the industry is that it does not need a physical set up in the market it’s operating in for it to be successful. Brunei has good internet connection and is very proficient in English. They could develop design works, mobile apps, website maintenance etc. Singapore animation companies have thrived by working with Pixar and Disney, from the comfort of their own country, and that is what Brunei companies can mirror. That is why education and English proficiency are crucial assets of Brunei’s population.


In terms of the diversification process and reform in the country, how determined and how organized do you see the government in crafting and providing tangible solutions for this niche market to be really competitive? How coordinated are the different sectors of the economy here in trying to improve diversification?

The Government has been pushing the diversification agenda and one can really see the level of activity in the country. His Majesty’s vision of Wawasan 2035 is inspiring and the direction is clear. As an International Bank we are clearly seeing a lot of mandates coming in and international corporations expressing interest in Brunei.

Brunei is a smaller country and is easier to navigate in; access to departments in government is easy. This is an advantage compared to large countries, it remains to be seen however how reforms around some of the regulation take place in the near future to encourage more and more investment flows.

Things probably need to be move faster, but it takes time. This is not like a switch where everything will be different by tomorrow.