World Bank names Brunei economy as the most improved economy in the world
According to World Bank’s Doing Business Report 2018, which measures the regulatory environment and efficiency of 190 different countries, for the third year, Brunei Darussalam has been named as the world’s most improved economy.
In this report, it saw the Brunei economy improving by 16 places, placing itself at 56 out of 190 economies. It also improved its Distance to Frontier (DTF) score by attaining a score of 70.60 out of 100, with its score improving in eight indicators, further minimizing its distance between the Brunei economy and highest ranked economy.
Despite placing 56th overall, among the ASEAN region, Brunei Darussalam is ranked fourth after Singapore, Malaysia and Thailand, which are followed by Vietnam, Indonesia, the Philippines, Cambodia, Laos and Myanmar.
The ASEAN region also recorded the most number of economies that have implemented reforms to its economies. With Brunei and Thailand implementing eight reforms, this has allowed the aforementioned ASEAN countries to place 11th.
Increasing Brunei GDP for Q2 by 0.7 percent year-on-year
In the second quarter of 2017, Brunei Darussalam experienced a 0.7 percent expansion in its Brunei GDP. The increase in Brunei GDP is mainly attributed to a stronger domestic demand, where the private sector’s capital expenditure and the government’s consumption expenditure increased by 28.5 and 23.5 percent respectively.
Several other sectors on the supply side had also experienced growth, such as the industrial sector and the service sector. In the industrial and service sector, it recorded a 1.1 and 0.1 percent year-on-year growth for the second quarter respectively.
Contrariwise, the agriculture, forestry and fishery sector experienced a contraction of 4.5 percent. This was attributed to a lower production of forestry, vegetables, fruits, livestock, poultry and other agricultural products.
Commitment towards diversifying the Brunei economy
With the government under Sultan Hassanal Bolkiah committed to creating an environment suitable for doing business, in order to further support diversification in the Brunei economy, the ASEAN country has been continuously making improvements. This is reflected in its improving Doing Business rankings year after year.
Although the nation had experienced a 2.5 percent contraction in its Brunei GDP in 2016, with new FDI projects and improvements being made in the country’s oil and gas production facilities, the Brunei economy expected to recover in 2017. However, according to the ASEAN+3 Regional Economic Outlook (AREO) 2017 report, the future growth prospects of Brunei Darussalam in the upcoming years will depend on progress of the FDI projects, local oil and gas production and the ongoing diversification projects by the Sultanate.
To accomplish this, Brunei Darussalam have increased reform efforts in the country in order to stimulate the private sector and attain more FDI. Consequently, under PENGGERAK, the government has formed two statutory bodies in order to assist FDI and expanding local businesses, namely SMEs. These bodies are FAST (FDI Action and Supporting Centre) and DARE (Darussalam Enterprise). Furthermore, the government has started implementing performance program budgeting aiming to develop the public financial management in the Brunei economy.