Welcome to my private journal generally on Brunei issues. Any opinions expressed are in my personal capacity. All rights to the articles are reserved.

Wednesday, October 28, 2009

Boeing 777 for RBA

According to The Indian Express on 28th October 2009, RBA will finally get its Boeing 777. I hope this will materialise soon:-


When the Sultan comes to the rescue of the Maharaja

As Air India's woes multiply on account of deliveries of new aircraft which it now wants to trim, help may come from an unexpected quarter — from the Sultan of Brunei. Orders for six Boeing aircraft which the airline wanted to scrap, and Boeing remained adamant on having it delivered, may now find a taker in the Brunei royal palace.

Senior officials told The Indian Express that the Brunei Sultan, Hassanal Bolkiah Mu'izzaddin Waddaulah, has expressed interest in taking on dry lease at least two-three of these aircraft — Boeing 777s — for his oil-rich country's national airline, Royal Brunei. The airline, which operates a fleet of six Boeing B767-300s, two Airbus A320s and two Airbus A319s, has been adding aircraft to its fleet over the past few years.

Source: The Indian Express

Tuesday, October 27, 2009

Brunei with the Big Players

The Oxford Business Group reported the following on 26th October 2009:


Brunei Darussalam: Diving In at the Deep End

26 October 2009

Brunei Darussalam is steadily building on its reputation as an Islamic financial services hub, making up for lost time and developing a credible sharia-compliant banking and financial sector.

Though the Sultanate has long offered Islamic financial services, operating in tandem with conventional banks and institutions, the lack of a broad-based regulatory environment meant that until recently the sector struggled to gain the recognition it deserved.

However, over the past few years there has been a rapid shift, thanks in part to reforms that established rigid guidelines to ensure banks offering Islamic products were fully compliant with sharia financial law requirements. As a result of these and other measures, Islamic banking sector has been equipped with a regulatory platform equal to or in advance of most of others operating in the industry.

These developments have in turn generated greater interest in Islamic financial services in Brunei Darussalam itself and have fuelled the drive to expand the sector's horizon far beyond the Sultanate's own borders.

One of the leaders in this push is Bank Islam Brunei Darussalam (BIBD), which is fast making a name for itself in the international arena as a successful financier, while at the same time bolstering Brunei Darussalam's own banking and finance credentials.

In July, BIBD was named along with BNP Paribas, CIMB, Deutsche Bank and HSBC as one of the co-managers of the Islamic Development Bank's (IDB) latest sukuk issue, which was held in September.

Such was the success of the issue, which was more than twice oversubscribed and raised $850m, well above the minimum target of $500m set by IDB, that BIBD managing director Javed Ahmad said it was likely similar projects would be coming the bank's way in the near future.

By surpassing the Islamic bond sale target Brunei Darussalam had been put on the international map in terms of Islamic finance, Javed said in late September. BIBD's participation in the issue had opened up new opportunities for other local Islamic finance institutions, which could further boost Brunei Darussalam's bid to become an Islamic finance hub, he told the Brunei Times.

"This is a positive achievement for Brunei Darussalam's image and has allowed us to be involved with customers outside the country," Javed said.

Another to broaden the base of the financial services sector is the Brunei Investment Agency (BIA), which has been stepping up efforts to internationalise its operations. In early October, the Sultanate's sovereign investment arm announced it had become a shareholder in a newly launched Islamic financial services firm, Fajr Capital. Other stakeholders in the Dubai-headquartered firm, which has an initial capital of $600m, include Malaysian sovereign investment fund Khazanah Nasional Berhad, the Abu Dhabi Investment Council, and the private Saudi-based firm MASIC.

Fajr's shareholders have said the company will focus on financial services and complementary opportunities in the broader economy in key Muslim markets including Brunei Darussalam.

According to Dr Amin Liew Abdullah, the managing director of BIA and one of the members of the new company's board, the investment in Fajr is part of BIA's strategy to increase its exposure in the Islamic financial industry.

"Fajr Capital is well placed to help develop Islamic financial markets and we look forward to a mutually beneficial partnership in the years ahead," Dr Amin told local media on October 6.

This increasing international profile is also generating overseas interest in Brunei Darussalam as a financial services market. On October 12, Datuk Mohamed Azahari Kamil, the chief executive officer of Malaysian-based Asian Finance Bank, said his institution was considering establishing a representative office in Brunei Darussalam as a result of the rapid expansion of the market there.

The bank was also looking at possible collaboration with Brunei Darussalam government agencies to establish an Islamic fund in the first half of next year, which will be jointly distributed and managed by Malaysia and Brunei Darussalam, Mohamed Azahari said while attending a financial road show in Doha.

While Brunei Darussalam has made great strides in recent years in developing its Islamic financial services sector, it still has work to do, especially given the increasing competition it will face in the future, both from regional rivals, other Muslim countries and even the conventional banking and finance industry, which is becoming more attracted to the potentials offered by sharia-compliant products.

According to Pehin Orang Kaya Seri Dewa Major General (Rtd) Dato Seri Pahlawan Awg Hj Mohammad Hj Daud, the Sultanate's minister of energy and the acting chairman of BIBD, the growth of the Islamic financial services sector in Brunei Darussalam and beyond has been supported by a rigorous and well-developed legal, regulatory and sharia framework, thereby ensuring its stability and sustainability.

However, crucial to the development of Brunei Darussalam as an Islamic financial services hub will be ensuring that there is a sufficient pool of talent and expertise, he told a seminar on creating awareness of Islamic finance, held on September 27.

Currently, that pool may be small, but by diving into international waters, Brunei Darussalam's Islamic financial services sector is learning to swim with the big fish.

Saturday, October 10, 2009

Happy Bruneians

This was posted on the Philippines Daily Inquirer on 10th October 2009:


What makes people happy?

By Rafael Castillo, MD
Philippine Daily Inquirer
First Posted 20:53:00 10/09/2009

Filed Under: Travel & Commuting, Tourism, Research, Health

BRUNEI DARUSSALAM is not really a popular tourist destination in Southeast Asia, but we were treated to a pleasant surprise after a short visit last week. Probably one of the world’s smallest states, it’s one of the wealthiest and has a high human development index, second only to Singapore in this part of the world.

But what is also most striking and palpable as one mingles with the people there is the sense of tranquility and happiness in the Bruneians, and those who have decided to call Brunei Darussalam their home. That includes around 22,000 happy overseas Filipino workers.

“I’m proud to be Filipino, but my family and I are happy where we are now,” said Bing Salazar, a 41-year-old tour organizer who has been working in Brunei for the last 18 years. “We work hard, yet out stress level is very low here. We also rarely get sick here,” Bing added.

Healthcare system

Crime rate in Brunei is hardly existent. Prevalence of diseases is one of the lowest in Asia. Their oil wealth allows the Brunei government to provide the population with one of Asia’s finest healthcare systems. You pay one Brunei dollar or around P33 for hospitalization or any surgery.

Despite having a lot of mangroves and swampy areas, malaria has been eradicated, and many other common infections in our country are virtually nonexistent in Brunei. There are only five general hospitals and other general health clinics but considering the relatively low disease prevalence, there seems to be no need to build more hospitals.

One is tempted to conclude that the Bruneians’ affluence is mainly responsible for their happiness and good health. “Probably to some degree yes,” Bing argued, “but I think Bruneians are generally simple and happy people who find happiness in even ordinary things in life.” He was suggesting that even if Bruneians were not naturally endowed with oil wealth, they would likely still be a happy people.

Health and happiness

“Bruneians put a premium on relationships,” Bing explained. And during the few days that we stayed there, it was quite evident that they not only nurtured family relationships but also friendships. We were there during the Hari Raya celebration and they welcomed to their households even strangers like us, akin to the Filipino hospitality during town fiestas. They were lavish with their hospitality, and even strangers would feel so much at home.

Indeed research has shown that people who value and nurture relationships and social interaction are likely to be happier. It has also proven that positive feelings and emotions in happy people increase their coping mechanisms to stress, build up the immune system, get sick less and make them more efficient and effective in the workplace. This is so because happy people tend to think more holistically and creatively, are more open to new ideas, and solve problems more quickly and intelligently.

But I guess the greatest dividends happy people get is their better health. And this is not mere coincidence. A study published last year in The American Journal of Health Promotion reported that of 9,981 Australians included in the study, those who reported a high happiness and life satisfaction are more likely a few years later to report good health.

About 63 percent of the study participants said they were happy most or all of the time. More than 90 percent claimed life satisfaction. These people were significantly more likely to report good health a few years later. The authors reported that those who were satisfied with life were 1.6 times as likely to report excellent, very good, or good health at the follow-up survey.

According to lead author Mohammad Siahpush, PhD: “Everything else being equal, if you are happy and satisfied with your life now, you are more likely to be healthy in the future. Importantly, our results are independent of several factors that impact on health, such as smoking, physical activity, alcohol consumption and age.” Doctor Siahpush is a professor of health promotion at the University of Nebraska Medical Center in Omaha.

Previous studies

This study is not isolated. Previous other studies on health and happiness reported similar conclusions. One of these is a study on nuns in the United States which found that those who reported happiness, hope and love in journals kept in their young adult years were likely to live longer lives.

Happiness is truly a state of the mind. A slum dweller may be happier than some people who live in mansions and carry with them heavy professional, social or political titles. Happiness is a decision one makes and is influenced more by a consistent happiness-seeking behavior.

That’s why happiness experts say that intentional activity, such as getting immersed in activities which make one happy, is a more significant major determinant of happiness rather than circumstances, which includes one’s wealth, position and education.

“Filipinos may not have the natural wealth the Bruneians have, but I’m sure we have the wealth of heart and mind that can make us also a happy people,” Bing said as he bade us goodbye at the airport. I smiled, silently hoping he was right.

Friday, October 9, 2009

Brunei is No.1

The Oxford Business Group on 9th October 2009 had this report about Brunei:


Brunei Darussalam: Praise and Pointers

9 October 2009

Brunei Darussalam's economy has received somewhat mixed reviews in two internationally recognised reports, having been rated by the World Economic Forum (WEF) as the number one country globally in terms of macroeconomic stability but also well down the rankings when it comes to ease of conducting business.

In the latest WEF Global Competitiveness Index (GCI), released on September 9, Brunei Darussalam's economy climbed seven rungs up the ladder from its position of 39th last year out of the 133 countries assessed, beating regional powerhouses such as India, Thailand and Indonesia.

Brunei Darussalam's unrivalled performance in the area of macroeconomic stability was a result of its large budget surplus cited by the report, which was assessed as being equivalent to one-third of its GDP, the fourth highest in the world; the high level of savings, rated second; and controlled inflation, which at 2.7% was the sixth lowest globally.

Overall, Brunei Darussalam recorded an improved showing in nine out of the 12 categories or pillars assessed by the WEF, while falling back slightly in three, infrastructure, goods market efficiency and technological readiness. Significantly, the study said that the Sultanate was continuing to do relatively well in all the categories that matter the most given its stage of development.

According to Pehin Yahya Bakar, the minister of industry and primary resources, Brunei Darussalam's climb up the rankings was due, in part at least, to the co-operation between government ministries and other relevant stakeholders in the business community towards improving the various pillars of competitiveness in the midst of the many difficulties and challenges that the country is facing.

The WEF too referred to those difficulties, saying that Brunei Darussalam faces enormous challenges in its efforts to diversify its economy away from its dependence on oil and gas as its foundation. In particular, it cited the need to bolster competition in the goods market, higher education, technological readiness, business sophistication, financial markets, and innovation in order to make the economic environment more conducive to doing business.

"Addressing and overcoming these challenges is a condition that must be met to further widen the economic base beyond oil and gas, which together account for half of Brunei Darussalam's GDP," the report said.

This need to further improve the business climate was noted by Dato Paduka Timothy Ong, the acting chairman of the Brunei Economic Development Board (BEDB), who described the report as a useful tool to assess what additional measures had to be taken.

"The overall ranking is good news but we should use it as an opportunity to review areas and scope for improvement," he said in an interview with the Brunei Times on September 10. "This means that the country is in a very strong position to implement the current National Development Plan."

Underscoring the need for a further opening up of the economy and maintaining the pace of reform in order to achieve this objective was the World Bank's latest "Ease of Doing Business" study, which was also released in early September, and saw the Sultanate fall back two places to 96th out of the 183 countries covered by the report.

One area that the report highlighted where reforms were needed was in the time it takes to start a business, with the 18 separate procedures taking a total of 116 days, compared to the regional average of 8.1 steps and 41 days.

According to Fauziah Dato Talib, a member of the APEC business advisory council and managing director of consultancy firm IQ-Quest, Brunei Darussalam should be able to streamline its bureaucratic processes, as has been done in other regional countries.

"If we analyse these areas, we can improve, and these are low-hanging fruits, such as cutting down processes for businesses to better serve the public," said Fauziah told local media on September 10.

However, while Brunei Darussalam may have slipped slightly in the rankings, this is not a sign that it has become harder to conduct business in the Sultanate, rather that other countries have picked up the pace of economic reforms, in part prompted by the global recession. There were a record number of reforms enacted in the past year, a reflection of governments' understanding of the need to facilitate the doing of business in troubled times.

While Brunei Darussalam may have fallen back slightly in the overall rankings, it showed a strong improvement in one important category, implementing reforms to reduce the tax burden on entrepreneurs, including reducing the time devoted to dealing with taxation processing and the number of payments required to be made.

Though further measures need to be taken to strengthen the country's business environment, as well as to broaden the base of the economy, Brunei Darussalam's fiscal and political stability will allow it to build on already well-established foundations.