Response to Written Question PT29

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YANG BERHORMAT PEHIN ORANG KAYA INDERA PAHLAWAN DATO SERI SETIA HAJI AWANG SUYOI BIN HAJI OSMAN

QUESTION:

YANG BERHORMAT PEHIN ORANG KAYA INDERA PAHLAWAN DATO SERI SETIA HAJI AWANG SUYOI BIN HAJI OSMAN asked the MINISTER OF FINANCE AND ECONOMY II to state the budget allocation provided for the Ministry to support efforts to diversify the national economy. Economic diversification is often mentioned as a necessary initiative to avoid reliance solely on oil and gas revenues. To what extent are the 'whole of nation' and 'whole of government' approaches committed to the effort to diversify the economy?

YANG BERHORMAT MENTERI KEWANGAN DAN EKONOMI II

ANSWER:

Yang Berhormat Yang Di-Pertua,

For the information of Your Honourable Members, towards economic diversification, the Government has identified key sectors with the potential to drive economic growth and development, especially in the Non-Oil and Gas Sector, namely the Downstream Oil and Gas Sector; the Food Sector; the Services Sector; the Tourism Sector, and the ICT Sector. At present, apart from strengthening the local business value chain and attracting FDIs, the government also prioritizes creating a more conducive industrial ecosystem. Therefore, to drive the national economic diversification and reduce dependence on oil and gas revenues, a 'whole of nation' and 'whole of government' approach is crucial through close cooperation among ministries, related agencies, the private sector, and the community. The private sector also plays an important role in empowering entrepreneurship, expanding markets, and developing local talent to ensure long-term economic resilience. With synergy among all parties, the Nation not only strengthens its economic foundation but also shapes a more sustainable, inclusive, and resilient future.

Some of the initiatives to support efforts in diversifying the national economy are:

i. Enhancing inspection accuracy and speeding up the customs declaration and clearance process at the Muara Investment with the acquisition and supply of AI technology scanners through the Royal Customs and Excise Department with Muara Port Company via a Public-Private Partnership.

ii. Prioritizing import-export permit approvals for accredited companies, while maintaining national security through the Silk Lane Merchant Scheme (SLMS).

iii. Supporting local businesses through financial assistance, like the Co-Matching scheme, enabling entrepreneurs to obtain capital for business expansion and access investments, including angel investment.

As of January 2025, a total of 91 applications have been approved. This involves grants amounting to BND1.434 million under the Co-Matching scheme managed by BEBD, aimed at assisting the growth of Micro, Small, and Medium Enterprises (MSMEs) in various sectors. Beneficiary sectors include the health and beauty industry, food and beverage, agriculture, and services such as goods delivery, education, and technology.

For unsuccessful applicants, support continues through guidance in business knowledge aspects. This includes preparing more robust business plans, generating strategic financial projections, and developing business resilience to ensure future sustainability and success.

iv. Conducting the Elevate Program to identify local MSMEs, especially in the food sector, with potential for franchise business expansion in international markets.

v. Providing training programs for MSMEs to enhance management, marketing, international certification, and financial skills through the Brunei Mentors for Entrepreneurs Network (BMEN) program.

vi. The Brunei Economic Development Board (BEDB) continues to spearhead efforts to attract investors to Brunei through more targeted promotional activities; local, regional, and international expos; organizing investment missions in target countries; strategic collaborations with business chambers, embassies, and industry associations in target countries. Moreover, BEDB has also appointed FDI agents and consultants in key markets like India, with plans to expand to other regions.

vii. The Industry and Business Ecosystem Division, MOFE is always ready to facilitate the creation of effective policy frameworks for industry development and facilitate industry players in strengthening the relationship between the public and private sectors.

Additionally, as a provider of strategic infrastructure and services in Negara Brunei Darussalam (NBD), Darussalam Assets (DA) also plays a role in supporting national development, diversifying the economy, and generating jobs through Government-Linked Companies (GLCs).

GLCs function to fill gaps in the private sector, especially in areas requiring large investments or specialized expertise not yet provided by local businesses. DA's mandate is to ensure that GLCs' leadership and management are based on commercial principles with good governance, also creating a conducive business environment to attract foreign direct investment and strengthen the private sector.

An example of GLC success in driving industry is Royal Brunei Catering Sdn Bhd (RBC). In the 1980s, RBC played a crucial role in developing the local restaurant sector by bringing in international franchise partners and developing halal Chinese food restaurants. This large investment, which was difficult for the private sector to manage at the time, helped increase the diversity of food choices and create job opportunities. Now, with a more mature food and beverage industry, RBC has shifted its strategy to support small and medium enterprises (SMEs) and local entrepreneurs by providing value-added services from their facilities, such as the Hazard Analysis & Critical Control Point (HACCP) certified Central Kitchen.

GLCs also play a role in enhancing the nation's essential infrastructure. In the telecommunications sector, GLC companies have accelerated digital infrastructure development, reducing access costs and improving service quality. For instance, the 100Mbps broadband package which used to cost $459 is now only $148 for 500Mbps. The launch of 5G since June 2023 further strengthens the country's telecommunications network with additional investments in international submarine cables to increase network capacity.

In the logistics sector, Muara Port Company Sdn Bhd (MPC) has enhanced the competitiveness of Muara Port since 2017, developing its infrastructure and expanding shipping destinations from 8 to 12 routes. MPC plans to increase the number of shipping companies and routes by 2026, aiming to reach 8 companies and 14 destinations. This project will not only upgrade Muara Port but also explore the "Port Trade Zone" concept to attract international investments and support local business development and the national economy.

Overall, GLCs play a key role in complementing the private sector, ensuring the development of critical infrastructure, attracting investment, and supporting the local business ecosystem to achieve Brunei's economic diversification.

Thank you, Yang Berhormat Yang Di-Pertua.