'Be an offshore financial centre to diversify economy'

BRUNEI could explore the possibility of becoming an offshore financial centre to diversify its economy, the visiting Lord Mayor of London said yesterday.

Lord Mayor of London Alderman David Lewis said that Brunei's stable political and good judicial system provided the country with two things that other offshore countries do not have.

An offshore financial centre would bring a great deal of employment, inward investment and financing to the country, the Lord Mayor said during his address at a half-day forum "Seizing opportunities in challenging times", at Universiti Brunei Darussalam (UBD).

"You can make it a real tax haven, you could bring experts in to boost your offshore business and create employment. Of course you would have to build the infrastructure and the regulatory system to do that," he added.

He also expressed optimism that with the stable government and judicial system, the country's efforts of economic diversification will be achieved in 20 to 30 years.

In addition, he emphasised the importance of educating people and bringing in experts as they are 'absolutely vital to any nation's future."

Brunei should also consider public private partnerships (PPP) as an important and innovative way of financing a nation's expansion, he said.

The Lord Mayor noted that Brunei is keen on Islamic finance, similar to London, Malaysia, the Middle East and the Gulf region which are financial centres for Islamic finance.

To be a successful financial centre, he said: "You should not be copying anyone else, you need to be distinctive in the way that companies in the Gulf are trying to be distinctive, not everyone can be a financial centre. You have to pick a particular area, where you can offer expertise that others are not offering."

"You cannot just copy Singapore, and try to be a mini Singapore. You've got to be distinctive. There is absolutely no reason why you should not be distinctive in terms of tax, in terms of what you do," he added.

The Lord Mayor said that Islamic Finance is no longer a religious product, but a global product.

"It is another financial product which helps the world economy goes around. This is the way that we need to look at it," he said, adding that the world market for Islamic products is currently worth an estimated US$700 billion.

"It is something that we think is very sensible with a huge growth area and something which as part of your financial centre, you might want to look at," he said.

Talking on country'splans in diversifying the economy from the oil and gas industry, the Lord Mayor said he was impressed with the country's plan with its ports, and promoting a knowledge-based economy through information communications technology and financial services.

Pointing out the financial crisis as a global problem, the Lord Mayor said: "A coordinated global solution is needed as it is a global problem, it will get worse and would take at least a year before the conditions improve."

When asked what Asean as a regional body can do to lessen the effect of financial crisis, the Lord Mayor told reporters that Japan, one of the world's largest economy, plays an important role in the Group of Eight (G8).

"China can play a big role as well, because they have cash that they can invest in the economy," he said.

With regards to the financial crisis, he said London will remain a strong international centre, as London thrives in its international hub of expertise.

"The reason that London had been successful is because we attract very bright people to London and a nation's strongest asset is not its oil nor gas, but its people," he said.

"We are completely open, transparent, anti-protectionist and pro-competition and that is the future. That is why London for the last 25 years has been successful."

"We open up to make ourself attractive and business friendly. This is my message wherever I go around the world," he added.

The half-day forum was organised by UBD in partnership with the British High Commission in Brunei and Standard Chartered Bank. (RSH1)

The Brunei Times