Brunei Darussalam: Asia’s Next Leading Location for Treasury Centres?
by Rady Roswanddy Roslan
Brunei Darussalam is located just off the island of Borneo in South East Asia. Situated between two Malaysian countries, Sabah and Sarawak (where Swinburne University International campus is located), Brunei has a population of 374,577 as of July 2007, the majority living near the capital city; Bandar Seri Begawan. The country has a strategic position only two-and-a-half hours by air from Singapore and Kuala Lumpur, Malaysia and eight hours from Melbourne, Australia. Per capita GDP was estimated by the Oxford Business Group (2007) to be $25,000 in 2006, making it the richest country in Borneo and the second richest in South-east Asia. The population enjoys high living standards without income tax. Bruneians also largely benefit from free medical care and education up to university level.
Tertiary level education is provided by the University of Brunei Darussalam, the number one university in Brunei, as well as other technical and vocational schools. The government provides scholarships to residents to undertake tertiary level studies abroad and these students are bonded to work with the government for an agreed period of time. After this they are free to stay with the government or join the private sector. Popular destinations for tertiary level education for Bruneians are the United Kingdom, Australia, Malaysia and Singapore.
The government of Brunei benefits from its highly literate, skilled and educated workforce, which is helping to develop a successful, knowledge-based economy. Since 2001, literacy levels in Brunei have significantly increased to approximately 92%.
Diversification and investing in Brunei
This constitutional sultanate, with its renowned Sultan Sir Haji Hassanal Bolkiah, is famous for being a major exporter of oil and gas. Pumping 220,000 barrels of oil a day, exporting 90% and accounting for excess of 95% of the government’s revenue, Brunei is known as the Kuwait of the East. The country’s oil and gas export partners are Japan (30.5%), Indonesia (19.9%), South Korea (14.9%), Australia (11.5%) and United States (7.7%) (Central Intelligence Agency, 2008). Predictions of fast depletion of oil and gas supply have been the reason for the nation’s diversification planning, especially the upgrade of its financial and banking sector. Brunei Darussalam is marketing itself as an Islamic financial hub as well as an offshore financial centre to realise this diversification approach.