Petrochem, tourism, education to steer Brunei’s diversification plan
13th May, 2015
THE development of petrochemical industry in Brunei will significantly help economic diversification process in the country, a renowned economist said.
Plans to develop export of petrochemical products will gradually help the Sultanate reduce the share of oil and gas in the total exports over medium term, Rajiv Biswas, Chief Asian Economist for IHS Economics, said.
He was speaking at the International Food and Biotech Investment Conference on the topic ‘The Rise of the Asean Economic Community’ held at The Empire Hotel & Country Club yesterday.
“Brunei has a very high share of oil and gas in its total exports, and hence it is facing increased vulnerability to fluctuations in oil and gas prices,” Rajiv said.
It is in view of this Brunei is establishing a major petrochemical project, an integrated refinery and aromatics complex at Pulau Muara Besar which is due to be completed in 2017 by Zhejiang Hengyi Petrochemicals (Zhejiang Hengyi), he added.
Another diversification initiative highlighted by Rajiv was the BioInnovation Corridor (BIC), a regional hub for bio-industry research and innovations with a focus on Halal food products, cosmetics, pharmaceuticals, biotechnology and logistics.
Brunei can also consider tourism as an integral part of economic diversification. Tourism in the Sultanate has already made significant contribution to the country’s Gross Domestic Product (GDP), accounting for an estimated 3.2 per cent of the total GDP, he added.
Another sector the IHS Economics expert underlined was education. The rapid growth in the total number of Asian middle class households has a huge potential to drive growth in demand for international education, thus creating new opportunities for education export industry in Brunei, he noted.
Touching on the overall rise of Asean, Rajiv said the projected GDP of Asean will reach $4 trillion by creating a large internal market for Asean companies.
The Asean Economic Community (AEC) which is to be implemented by the end of this year will further boost intra-regional trade and investment flows over the medium term.
Part of the AEC is the open skies policy, which he said will be one of the important pillars for the establishment of the Asean Economic Community in 2015.
“Asean has recognised the importance of air transport for the economic development of Southeast Asia and has designated this sector as one of the 12 priority sectors for the establishment of the Asean Economic Community,” Rajiv said.
According to Rajiv, an open skies policy for Asean carriers will help increase competition on major routes between international airports, controlling air fares for consumers and boosting air passenger traffic within Asean.
“Asean heads of government have set an ambitious timetable for the AEC and are seeking a deal on liberalisation of trade in financial services and cross-border investment flows among Asean countries by the end of 2015.
“While full Asean economic integration by the end of this year may be a bridge too far, a substantial AEC first stage deal that delivers the lower-hanging fruit will still be an important step towards Asean economic integration,” Rajiv explained.
Source: Borneo Bulletin