BANDAR SERI BEGAWAN – Efforts to diversify the economy have boosted growth in the non-oil and gas sector at an average annual rate of 4% since 2019, the sultan said in a titah to mark his 76th birthday.
Speaking from Istana Nurul Iman on Friday, His Majesty Sultan Haji Hassanal Bolkiah said the non-oil and gas sector was valued at $7.8 billion in 2021, surpassing oil and gas exports — previously the mainstay of Brunei’s economy — worth $6.4 billion in the same period.
The downstream sector — which includes oil refining and chemical production — has grown eight-fold since 2019, increasing from $200 million to $1.6 billion in 2021, mainly due to the establishment of the Hengyi petrochemical plant on Pulau Muara Besar.
The plant, a joint venture between the China’s Hengyi Industries and the Brunei government, is one of two multi-billion dollar downstream oil and gas projects in the sultanate, the other being Brunei Fertilizer Industries.
His Majesty said while the country continues to face concerns over COVID-19, Brunei needs to plan several economic recovery strategies that will allow the country to return to normalcy.
“This is necessary because Brunei’s Vision 2035 is approaching, and the country must move to achieve its goals without further delay, with an emphasis on economic development,” he said.
Growth forecasts for Brunei vary, with the IMF projecting GDP to grow at a rate of 1.8% in 2022, while the ASEAN+3 Macroeconomic Research Office and the Asian Development Bank forecast a growth rate of 4.1% and 4.8% respectively.
Local think thank, the Centre for Strategic and Policy Studies, projected GDP to grow at rate of 3.7% in 2022.
“This positive outlook takes into account the growth potential of several sectors of the economy, including the food, fertilizer, and chemical sectors,” the sultan said.
Brunei Fertilizer Industries, a joint venture between the government and Germany’s ThyssenKrupp, began exporting its first urea cargo in February valued at $19 million.
When the plant achieves its full production capacity, it is expected to contribute an additional $400 million to Brunei’s annual GDP with an annual export value of about $600 million.
“These FDI companies also provide opportunities for micro, small and medium enterprises (MSMEs). I hope that MSMEs will take advantage of these opportunities,” the sultan added.
The monarch also stressed the need for Brunei to boost domestic food production, with geopolitical tensions such as the war between Russia and Ukraine causing massive supply chain disruptions, driving up the price of staple crops such as wheat and maize.
Since 2019, the country’s food sector has grown at an average rate of 11.4% annually, driven mainly by aquaculture and poultry production. Food exports were valued at $50 million in 2021, compared to just $8 million in 2017.