Answer for Oral Question PL022

QUESTION

Yang Berhormat Dr. Awang Haji Mahali bin Haji Momin

YANG BERHORMAT DR. AWANG HAJI MAHALI BIN HAJI MOMIN asked the MINISTER AT THE PRIME MINISTER’S OFFICE AND MINISTER OF FINANCE AND ECONOMY II to state the mechanisms for regulating foreign direct investment governance. What efforts are being made to ensure the predictability of investment regulations, procedures and decisions in the context of weak FDI performance and net outflows of investment?

ANSWER

Yang Berhormat Menteri di Jabatan Perdana Menteri dan Menteri Kewangan dan Ekonomi II

The Government implements foreign direct investment (FDI) governance through a comprehensive investment policy and regulatory framework, with evaluation and approval processes involving several key Government agencies to ensure that decisions are made transparently and in line with the strategic interests of the country. It is also based on a whole-of-government approach to ensure that each proposal is assessed comprehensively.

As the lead agency for FDI in Negara Brunei Darussalam, the Brunei Economic Development Board (BEDB) is responsible for conducting an initial assessment of each investment proposal received. This process also involves the relevant ministries and agencies concerned, enabling any issues or concerns to be identified and addressed at an early stage before the proposal is brought to the next level of consideration. This will not only strengthen governance, but also reduce the risk of delays and increase certainty in the decision-making process.

Proposals that have been technically and fiscally reviewed will subsequently be presented to the Foreign Direct Investment and Downstream Industry Steering Committee (FDIDI Steering Committee), whose members comprise several Cabinet Ministers, with the aim of assessing the strategic suitability of the investments in line with national development priorities. This structure ensures that decisions can be made collectively, transparently and accountably.

With regard to the predictability and transparency of investment decisions, the Government is also focusing on strengthening the business environment, retaining existing investors and promoting high-quality investments with the potential to sustainably generate economic added value and employment opportunities. Among the ongoing efforts being implemented is the provision of facilitation platforms to assist investors in implementing their investments. This also includes coordination assistance with the agencies concerned, monitoring processing timelines and providing centralised channels for resolving issues.

In addition, regulators of the relevant sectors and the relevant Government agencies also ensure compliance with regulatory requirements, including related taxation and filing matters. Government agencies also work in an integrated manner to improve the country’s FDI performance, including ensuring adequate workforce development, which is among the key performance indicators (KPIs) that are continuously monitored.

In the context of weak FDI performance and net outflow of investment, this matter needs to be viewed from a broader perspective. Globally, FDI flows have shown a more moderate trend in recent years due to economic uncertainty, tighter financial conditions and geopolitical turmoil, which have affected cross-border investment decisions.

Negara Brunei Darussalam has likewise not been exempt from the impact of these global developments. Nevertheless, in the case of Brunei Darussalam, the net outflows recorded during certain periods were also partly influenced by debt repayments and financial restructuring by multinational companies, and do not necessarily reflect an overall withdrawal of investment.

In fact, at the same time, the number of approved projects has increased, and some investors already established in NBD have made additional investments and expanded the capacity of their operations. This reflects continued confidence in the stability of the country’s policies and business environment.