National Development Plans: Summary1

I am going to share with you the finding of a little exercise I did at the beginning of my research. After reading all of Brunei’s National Development Plans, cover to cover, I made a matrix (which I must say is not an easy exercise!) of each RKN/NDP’s objectives, strategies, finance allocations and the targeted economic projects/industries to be developed.

Today, I am going to show you the list of targeted industries/projects beginning from the third National Development Plan (as the first two mere talked about physical infrastructure). The aim of this is to sort of reflect, remind ourselves and see how far we have gone to achieve any of the targeted projects. If we have, how successful was it? If we haven’t then the question we should ask is why? (Unfortunately I do not have the data to measure the achievements).

NOTE: ALL of these can be found in the published National Development Plans!

(Apology for the untidy presentation and BEST VIEWED using FireFox!)

3rd NDP (1975-79)
1. Rice production
2. Agriculture: sweet corn, yellow beans and high protein cattle grass.
3. Livestock: meat and eggs.
4. Castor oil plant
5. Tree crops: pineapple plantations and palm oil estates
6. Fisheries: marine fish
7. Forestry: establishment of a Kraft Pulp Paper Mill and a timber complex.
8. Other mineral resources: development of gravel in Temburong, silica sand in Tutong and coastal terrace clay and ceramic clay in Jerudong.
9. Tourism: Construction of hotels.
10. Oil and gas: Ammonia and Urea plants
Agro based industry: sago processing plant

4th NDP (1980-84)
1) Rice production
2) Livestock production: goat farm, cattle breeding.
3) Uplands crop: maize, soya beans, cowpeas for animal feeds
4) Fisheries: fresh water fish
5) Forestry: timber production
6) Other minerals: Silica land in Tutong (with reserves of 20 million tons), sand mining and pottery/tile industry based on coastal terrace clay and ceramic clay
7) Agro industries: vegetable oil, castor oil, animal feed, leather works, oil-palm, fruit juice and puree factory, orchard growing for export, coconut oil extraction and fibre factory

5th NDP (1986-90)
1) Agriculture and livestock industry:
• Rice, Tropical Fruits, Vegetables, Cattle, buffalo and goat, Chicken and Eggs
2) Fisheries:
• Marine fish, Aquaculture: freshwater and brackish water, Fish meal
3) Forestry:
• Using swamp forest product for plywood, Fibre-board factory using woodchips from the sawmill factories
4) Manufacturing:
• Food processing: canning and packaging,
• Furniture
• Potteries and Tiles
• Textiles: high value added types of garments using modern and traditional technologies
• Cement factory to grind imported clinker
• Precast concrete factory
• Chemicals and dyes
• Plywood and Wood paneling
• Glass from silica sands in Tutong

5) Tertiary Industry: Banking and finance, Insurance, Maintenance services

6) Financial Centre
7) Trade Centre
8) High value-added, non-labour intensive industries
9) Bio industry

6th NDP (1991-1995)
1) Industry
• Industrial sites to be developed in 3 districts
• Identified industries are:
o Mini steel plant
o Light-weight aggregate
o Dairy milk
o Glass
o Pre-cast
2) Agriculture:
o Rice
o Hydrophonic vegetables
o Eggs and poultry
o Local fruits and production of seedlings
o Horticulture
o Buffaloes and goats

3) Forestry: Rattan plantation for furniture industry
4) Fisheries: Marine fish

7th NDP (1996-2000)
1) Oil sector:
• Plan to develop the oil and gas industry into downstream activities including:
i. Ammonia/Urea
ii. Methanol
iii. Export Oriented Refinery
iv. Other Petrochemical such as plastics and paints

2) Primary Sector:
• To produce 7% of rice requirements;
• To maintain the self-sufficiency level of egg production;
• To meet 70% of local chicken needs;
• Increase production of vegetables, plants and ornaments and livestocks;
• Aquaculture projects tp produce high values species for export

8th NDP (2001-2005)
1) Oil and gas sector:
• Oil and gas downstream activities

2) Industry
• Value-added industry such as food processing
• Export specialized services such as engineering, Islamic banking, law, economy, accounting, architecture and estate management.
• Manufacturing: Construction materials and equipment, garment and furniture.

3) Primary Sector
• Agriculture targets:
 3% of rice requirement
 To meet 94% of vegetable needs
 To meet 47% self-sufficiency in fruit production.
 Increase production of ornamentals horticulture industry.
• Livestock industry:
• Broiler industry to meet 100% self-sufficiency
• Poultry production to maintain 100% self sufficiency level.

• Fishery sector:
• Production of rostris prawn
• Production of other fish species such as mud crab, golden snapper and barramundi cod.

4) Tourism and Trade
• Develop more eco-tourism destinations.
• Promotion of cottage industry such as:
• Traditional food, Weaved cloths, Rattan furniture, Plaited products, Malay Cap, Sculptures and carving, Woodwork, Silverware, Brassware, Malay dagger, Boats
5) Banking, Finance and Insurance
• To become an international financial centre through BIFC

6) Other promoted sectors:
• ICT for k-ekonomy; Transhipment activities.

Personally, I believe there is nothing wrong for us to come up with ‘new ideas’ for new projects each year, but we need to supply our ‘ideas’ (especially the fancy ones) with some strategies and plan of execution I suppose. Otherwise, it will just be another list in the non-exhaustive yet-to-be-achieved projects.

I have done the basic dirty work of compiling this list. For anyone out there who is thinking of pursuing a Masters degree and/or a PhD, I hope this is of some use to you. (Panjang amal). This could be used as a basis of developing a research question, I think.

Salaam.

A Blessing in Disguise, right?

These days almost on daily basis we read about the impending recession that will happen in the UK and the US which will affect many-many countries whose economies depend on the demands from these countries. Those, coupled with the increasing global food prices and the skyrocketing oil price, mean doom and gloom for the world economy.

Then I thought are we lucky or what? This is what I think, for some blessing-in-disguise sort of luckiness, all of the world events may probably have little effects on us. Thanks to oil, we have not been producing anything else which means we will not be affected by the fall in world demand of anything, well..except oil. As long as oil price goes up, then we haven’t got anything to complain. Our economy will continue its growth. Our inflation stays low (thanks also to oil money that have been used to subsidise our cost of living). And if there will be a recession, we will actually stand to gain. A world recession will push the prices of all goods (including food) downward. Since we import almost ALL of our needs, then we can continue not producing anything and buy from abroad, which in fact will become cheaper.

And then we all can continue growing… without development.

And of course, if only oil never runs dry.

Salaam.

Happy Birthday

Happy 62nd Birthday to our beloved His Majesty Sultan Haji Hassanal Bolkiah.
Thank You very much for your kindness and generosity to us.
May you be blessed with good health for many years to come.

Life After Oil

I was reading the post made by Brunei Resources on ‘Life Without Oil’. He suggested that Brunei should either decrease government spending and/or increase our tax base, which in economics term is what we call ‘contractionary fiscal policy’. This policy is usually applicable to an economy that has a budget surplus, which thanks to the soaring oil price, is actually the case for Brunei. But if you take the oil effect, Brunei’s budget will not be as handsome as it is today.

The effect of a contractionary fiscal policy will be a reduction in the aggregate demand which is not exactly the right prescription for a country that has little economic activities. Having said that however does not mean that the government should just spend all its income. It should be mindful of what it is it’s spending on. What we want is productive spending (and I agree with Mr. BR, this does not include subsidy). Spending that can stimulate the non-oil economy. And we want lots of this. Being a small economy (defined as having a small population) is not without its problem. And for that reason I personally think we need a strong government support (while it is still able) to help the economy as much as it can.

But the question of life after oil is still unanswered.

To answer this, we need Ricardian’s Theory of Comparative Advantage which says that we should produce and specialize in the production or services in which we have comparative advantage. What? You may ask. I say, look around us. We are so fortunate to have plenty of sun, land and sea, which I believe are extremely under-utilized. With a bit of hard work, I’m sure Brunei can develop its comparative advantage. If Singapore, an island that has an extremely limited natural resource can become one of the Asian’s dragons or Liechtenstein with a population of about 34,000 people and equally has a limited amount of natural resources can become one of the highly industrialising economies, then so can Brunei!

Life without oil will not be the end of the world as long as we do something about it. And we should start NOW. The current generation must help the future generation in the transition of oil to non-oil economy. Any ‘rentier’ habit has to be removed from the current system and the mindset of all Bruneians. With the right attitude, the right mind and the right policy Brunei could and should thrive. There must also be a strong will both from the government and the people and of course, some hard work too.

Salaam.

Battle of the Schools, Revisited.

I received many comments for my post on schools in Brunei a few months ago. While I do not doubt that parents’ involvement in their children’s education is imperative, I still believe that schools and teachers equally play an important role. I also agree that at the end of the day, it is the children’s own efforts that determine their achievement and those who have ‘the brain’ will make it anywhere. Although I do not think this is fair.

It still appears to me that most parents (including myself) do not really have a concrete reason why we send our children to a private school than to a government school. We assume we know the reason. We assume that by paying more, our children will learn more. Often, our choice of school is influenced by words of mouth. When we see or hear children of our friends or relatives are doing well in a particular school (which is almost always a private school), we assume our children will also be doing well in the same school. Now, if this is true (i.e. a private school is better) then those children who have able parents will almost certainly get better education. What about those children whose parents cannot afford to send them to a private school?

But the question remains, do we really know that a private school is better than a government school? Does the money we spend worth the quality of teachings our children are receiving?

Generally, we do not know the real performance of a school, the performance of the students, let alone the performance of the teachers. We do not know whether school A is better than school B. I remember when my husband and I went for school-hunting a few years back. We went to a few schools and all we were given was a few forms to fill along with the fee schedules. There was no information on the performance of the school or any information why we should choose that school. In the end, I had to rely on words of mouth, which is not an informed decision.

Here in the UK for example, we have the Office for Standards in Education (OFSTED). Every school is inspected and assessed. In the comfort of my chair I get to read reports about all of the schools in the area which are published in their website. Every school that I visited also gave me a copy of this report.

Now, this is what I call a transparent system that leads to an informed choice which we are sadly, lacking. Now, I don’t know the content of the Ministry of Education’s SPN21, I hope transparency is also one of the agenda. It will not only help parents make the ‘right’ decision, it will also ensure the quality of our schools, be it private or government. And most of all, it can ensure that every child receives a good quality education.

When all schools are assessed and results made public, naturally every school will want to be the best and want to improve their past performance. This will not only benefit the children and the parents but will surely benefit the entire education system. Who knows, if the government schools prove that they are better than the private schools, parents don’t even have to fork hundreds of dollars each month. And that will be sweet indeed…

Salaam.

Life-long Learning in Brunei

There will be 2 exciting international conferences to be held in Brunei:

1. Brunei International Halal Market Conference on 16-17 August 2008;
2. International Conference on Economics of Higher Energy and Food Prices: Future Scenarios and Implications for Developing Economics on 7-8 January 2009.

So, do take these opportunities. Attend, learn and don't forget to ask questions :)

Salaam.

Brunei and Oil Love Affair

My friend Roger Lawrey talks about Brunei's diversification.
I couldn't agree more.

Salaam.

Road to Diversification

There has been another ‘exciting’ development in Brunei’s quest to diversify its economy (or I hope it is what we are doing), and that is Brunei wishes to be the ‘city in the garden’. Is this just a mere statement or is this a real project with plans and strategies already being formulated? If it is a real project, I would love to know and maybe contribute ideas but if it isn’t, then Brunei better do something about it because you can’t just announce to the world that you want to be something and not do it and expect the world to forget.

The thing about us in Brunei is that we love to make fancy headlines: ‘halal branding’, ‘heart of Borneo’, 'Kingdom of Unexpected Treasures', ‘service hub (ShuTT)’, ‘ICT park’, ‘offshore financial centre’, ‘Brunei Inc. (or something like that)’, just to name a few. Please don’t take me wrong, I’m not saying that we shouldn’t do this or we cannot dream big but I have yet to see the end products.

I think the main reason why we have not achieved anything in relation to these ‘fancy’ projects or actually ANY project is that there is a lack of detailed plan and strategies. Even if there is one, it is never shared with the public let alone debated. Even worse it is sometimes not even shared among the relevant agencies. As a result the public, including the private sector, do not understand, never mind contribute, and therefore the project is not appreciated and supported.

Take for example ‘halal branding’. Seriously, I don’t fully understand what is it that we want to do? What is our objective? Can it create massive employment? Can it increase food production? How much resources are we devoting? What is our problem? Why does it take so long? How can we help? Do we mean to say that ‘Brunei Halal’ is better that ‘Malaysia Halal’ or ‘Thailand Halal’? Because believe me, when I go to a shop abroad I only look for ‘Halal’ products. Taste and packaging play a more important role in my decision to buy a particular halal product.

I am no expert but I think it is high time that Brunei goes to the basic of development and economic diversification. Instead of devoting our energy and resources to fancy projects, wouldn’t it be better to concentrate in the actual production? I for one want to hear plans for massive agricultural production or fishery or any kind of manufacturing. It sounds boring but it is what we most need to survive. Do remember that we only have 25 years to turn our economy around. And that is not a very long time.

Salaam.

Reality Bites....in Miri

Somebody sent me a link to a blog post by one of our Sarawakian friends. For the benefit of those who do not have a Multiply account, here it is:

MONEY WITH A DIMINISHING VALUE by Zaidil

There is a sudden change in atmosphere in Miri city after the fuel price hike. There are less cars on the road. The shopping centres are less crammed and worst of all... there are not that many happy faces around. From what I sensed, it is just the beginning. The experts predicted that the trend is likely to continue that way for quite some time. So what do we do?

Nothing much I am afraid. If you are an optimist, you will say - work harder so that you can earn more to compensate for the diminishing value of the currency. At the rate the price of goods is increasing you have to earn at least 2 times what you earned a month ago in order to maintain the same level of lifestyle.By the end of this year, you have to earn 4 times what you earned in April. This week Abdullah has just announced that if you work in the govt, you are allowed to do a part time business. Wonder how will that affect the already inefficent govt agencies?

On the other hand, if you are a pessimist, you will start looking for scapegoats and punchbags to put the blame on.

The situation is however not all gloom and doom. The bright side of it all is that there is a lot less road accidents ever since the price hike was annunced and people started to use the public transport more. Actually last sunday was the first time that I went to Boulevard supermarket without anyone ramming my butt with the trolley. I had the entire supermarket for myself.

Another positive development is that people started to think of growing their own vegetables and rice which I think is not a bad idea at all. Myself, I am thinking of digging the document bag to search for that land title which my grand father left more than a decade ago. With a bit of luck the cockroaches have not been so hungry to savour the land title and I might be able to harvest my own Bario rice. Oh do I have to fly to Bario to grow Bario rice!!

We should be grateful that Brunei still maintains the fuel subsidy (I don't know when will that last though, and I'm not sure whether it is the most sensible and rational policy). Nevertheless, I'm sure Brunei is also affected by the policy change in Malaysia. Perhaps this effect will probably even bigger than an effect of a reduction in Brunei's fuel subsidy.

Too bad for a country that depends on too much import.
But that's reality. And reality bites.

Salaam

Oil Price

I received an email today asking my view on the current issue of the current global oil price hike and the possible 'answer' to the crisis. It has been in my head the whole day today and I'd like to share you my reply to the email. I also believe that as an oil producing country ourselves (albeit small), this issue concerns us. I would also love to hear other views.

Below is the content of the email:

Dear Freakonomist,
I'm Raiza, an ordinary person who wonders alot on what on earth is gona happen to the world when the oil price hits US$200/ barrel which in turn would give a spiralling effect to the worlds economy wreaking havoc the global financial market. Understanding that you believe there is an economic explanation to everything intrigues me and leads me to email you on the following issues. I humbly request for your opinions and explanations.

What has been bothering me lately is the fact that inflations are occuring in most countries, Brunei is of no exception. I strongly believe that one contributing factor to this is the disturbing rise in oil price.

There are several excuses to the rise in oil price:
1) The global demand for oil is rising.
2) The dollar continues to fall to record lows.
3) And, OPEC refuses to raise production levels, insisting US recession will lower.

Today's newspaper mentions despite the Jeddah Summit where policy makers gathered to have emergency energy talks and that Saudi agreed to increase production by 200,000 barrels to 9.7 million per day, the oil price continues to rise. The rise in oil price this time is blamed on possible terrorist activities in Nigeria. If this is true then yes this would choke oil supplies hence demands on oil can not be answered fully.
Unless... more explorations are done which will mean more huge investments are needed. The story on the energy crisis seems to go on and on and no apparent favorable explanation to resolve the said crisis.

My question now is what are all the possible 'solutions' that can help the world to return to its stable state in the short-term and medium-term? Going green is one but this surely will cost us time! I hope to hear from you soon.

This is my reply:

Thanks so much for reading my blog. If I know the answer to your question then, I wouldn’t be sitting here at home and writing this :).

Nevertheless, this is what I think:

1. I don’t think there is an ‘easy’ solution to the current global crisis because as you clearly point out, there are several reasons to the rise in the oil price. Addressing one or trying to do so without solving the others, does not guarantee that the issue will be resolved, as is the case to the Saudi’s agreement to increase oil production (i.e. oil price remains high).

2. The US needs to strengthen its dollars but that would mean at the expense of the US economy, which as we speak, is ailing. A stronger dollar may worsen their Balance of Payment, which would not help their economic health. But a continuous weak dollar will surely be followed by a continuous increase in the oil price.

3. And then there is a problem of increasing global demand. Now, the ‘economically’ right thing to do is for all governments in the developing countries (where oil demand is high and growing) to remove any oil subsidy. If the domestic oil prices in these countries reflect the international price, then demand for oil will surely go down. But this is (as you can imagine) not without a great cost.

4. Another factor that’s causing the increase in price, if I may add, is the work of the commodity index buyers and speculators. Now, this needs to be stopped.

Without doing all of the above then sadly, it may be true that the only solution to the energy crisis is an actual global recession.