Brunei Economy

Brunei’s economy runs primarily on revenue generated by the export of petroleum and natural gas. These two resources make up 36 percent of the country’s GNP. The government has tried in the past to diversify its economy, but with little success. As the country produces little more than oil and gas, it must import most of its goods. But there is no personal income tax, sales tax or capital gains tax, so workers get to keep nearly all of their pay. This helps to keep inflation low.

Lately, the government has encouraged more foreign companies to invest in Brunei. New businesses which meet certain criteria qualify for exemption of tax on profits for up to five years. With a normal corporate tax of only 30 percent, many foreign investors have been attracted to the country. However, the government’s main priority is to encourage native Brunei Malays to become the leaders of the nation’s industry and commerce.
The government regulates the amount of foreign labor allowed to migrate to Brunei to help keep most residents employed. The nation’s substantial foreign reserves are overseen by the Ministry of Finance, whose purpose is to increase the value and stability of Brunei through diversified investment. Since 2002, Brunei has emerged as an offshore financial center, as well as a major hub for Islamic banking.

Economy Make Up

Besides the main exports of oil and gas, Brunei has small forestry, agriculture, fishing and banking industries. The bulk of Brunei’s economy relies on oil and gas, however. Although commerce is still in its infancy, a few local industries such as garment production, water-bottling and a soft drink company have become solid businesses. Despite its small size, Brunei has considerable wealth per capita within ASEAN.
Brunei maintains a serious commitment to protecting its natural environment, so all polluting industries are banned. A government-owned cattle ranch in Australia, which is larger than Brunei itself, provides the nation’s beef supply. Chickens and eggs are produced locally, but most other foods must be imported. Thus, agriculture, aquaculture and fishing have become priorities for the government in its effort to become more self-sufficient. Plans are also in the works to create a cyber park to develop high technology