Infrastructure projects key driver of Brunei GDP rise
Economic outlook: File photo shows a worker at a construction site in Gadong. The ADB Asian Outlook estimates Brunei economic expansion at 2.3% in 2010, a forecast that businessmen say will be partly driven by infrastructure projects. Picture: BT/Rudolf Portillo
Saturday, September 26, 2009
BRUNEI'S ongoing and future national infrastructure projects will contribute a significant part to the Sultanate's 2.3 per cent economic expansion next year as forecasted by the Asian Development Bank (ADB).
In its recent Asian Outlook report, the ADB sees the Brunei gross domestic product growing next year after a dip predicted for 2009.
"With the projects coming in and increased activity in Brunei, it will filter down and there will be spin off businesses. That could be the cause of the increase (in GDP)," said Fauziah Dato Talip, Apec Business Advisory Council member. Most of the business would probably be related to the construction industry as there seems to be an increase in infrastructure works, she added.
"The ADB's forecast of growth is likely to be from the stabilisation of oil prices, and expected high energy demand next year as the global economy starts to recover properly," said Allen Lai, chief executive officer of the Asia Inc Forum. The Brunei methanol project coming online next year will also contribute to Brunei's export receipts, he added.
"As the Brunei Halal brand gets under way, that will also contribute to the diversification of the economy," he added.
One sector that will also be contributing to the increase in national GDP is the tourism and hospitality industry, said director of the Tourism Development Department, Sheikh Jamaluddin Sheikh Mohamed.
"In January (next year) alone, there will be more than 1,500 travel industry experts coming to Brunei for the ASEAN Tourism Forum," he said.
"It will be an excellent platform to showcase Brunei and with 75 media and over 400 buyers (travel industry promoters). The exposure will continue throughout the year with a projected growth in inbound passengers," said Sheikh Jamaluddin. The spillover business will go to the local tour agents, hotels, restaurants and retail outlets, which should see an increase in business for 2010.
"The buyers will come to Brunei to find help to promote Brunei in their magazines, brochures and so on and I think that it will be a good year for Brunei," he said.
The tourism industry contributed $325 million to the annual GDP in 2008 and $318 million in 2007. Statistics from the Department of Economic Planning and Development recorded that in 2008, the total GDP for Brunei was valued at $20.4 billion at current prices.
The department foresees the tourism sector's contribution to total GDP rising seven per cent next year.
However, some in the business community say that GDP growth will only happen if the projects get started on schedule.
"It is easy to come up with numbers and projections but the economic indicators for these numbers are the projects that are slated to happen during that time," said a businessman who wished not to be named. "For instance, if you have a project with 6,000 houses, the spillover effect will be that there will be 6,000 sets of furniture that need to be bought, 6,000 electrical appliances that will be installed and so on, but that is once it is started," he said.
"If the projection is right then that is very good for Brunei, of course, but it is very important to stay on schedule and not re-tender and delay and find new contractors and slow down the projects," he added. Debbie TooThe Brunei Times
In its recent Asian Outlook report, the ADB sees the Brunei gross domestic product growing next year after a dip predicted for 2009.
"With the projects coming in and increased activity in Brunei, it will filter down and there will be spin off businesses. That could be the cause of the increase (in GDP)," said Fauziah Dato Talip, Apec Business Advisory Council member. Most of the business would probably be related to the construction industry as there seems to be an increase in infrastructure works, she added.
"The ADB's forecast of growth is likely to be from the stabilisation of oil prices, and expected high energy demand next year as the global economy starts to recover properly," said Allen Lai, chief executive officer of the Asia Inc Forum. The Brunei methanol project coming online next year will also contribute to Brunei's export receipts, he added.
"As the Brunei Halal brand gets under way, that will also contribute to the diversification of the economy," he added.
One sector that will also be contributing to the increase in national GDP is the tourism and hospitality industry, said director of the Tourism Development Department, Sheikh Jamaluddin Sheikh Mohamed.
"In January (next year) alone, there will be more than 1,500 travel industry experts coming to Brunei for the ASEAN Tourism Forum," he said.
"It will be an excellent platform to showcase Brunei and with 75 media and over 400 buyers (travel industry promoters). The exposure will continue throughout the year with a projected growth in inbound passengers," said Sheikh Jamaluddin. The spillover business will go to the local tour agents, hotels, restaurants and retail outlets, which should see an increase in business for 2010.
"The buyers will come to Brunei to find help to promote Brunei in their magazines, brochures and so on and I think that it will be a good year for Brunei," he said.
The tourism industry contributed $325 million to the annual GDP in 2008 and $318 million in 2007. Statistics from the Department of Economic Planning and Development recorded that in 2008, the total GDP for Brunei was valued at $20.4 billion at current prices.
The department foresees the tourism sector's contribution to total GDP rising seven per cent next year.
However, some in the business community say that GDP growth will only happen if the projects get started on schedule.
"It is easy to come up with numbers and projections but the economic indicators for these numbers are the projects that are slated to happen during that time," said a businessman who wished not to be named. "For instance, if you have a project with 6,000 houses, the spillover effect will be that there will be 6,000 sets of furniture that need to be bought, 6,000 electrical appliances that will be installed and so on, but that is once it is started," he said.
"If the projection is right then that is very good for Brunei, of course, but it is very important to stay on schedule and not re-tender and delay and find new contractors and slow down the projects," he added. Debbie TooThe Brunei Times
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