Brunei pales in comparison to neighbouring countries

Dear Editor,

A RECENT BT article, based on the Key Indicators for Asia and the Pacific 2010 published by the Asian Development Bank (ADB) stating that Brunei is No 2 in Asia in terms of GDP per capita based on Purchasing Power Parity (PPP), has somewhat painted a rosy picture of the economy. A bit of perspective needs to be put in place in case complacency sinks in.

Over the past few decades, Asia has been growing at rates that the Western world could only envy. Average GDP growth rates for South-East Asian economies from 1987 to 2009 were in excess of 3.9 per cent, with the exception of Brunei recording a modest 1.6 per cent. Brunei's GDP growth in 2009 is in fact -1.8per cent instead of -0.5 per cent reported by ADB. Hence the economy did not actually improve (-1.8 per cent in 2009, -1.9 per cent in 2008). The oil and gas sector, Brunei's main livelihood, declined by 6.9 per cent, 6.3 per cent and 4.6 per cent respectively in 2007, 2008 and 2009. The spikes in crude oil and LNG prices in recent years have helped to reduce the impact arising from lower production and exports of hydrocarbons. Economic growth in Brunei has not really kept pace with population growth. In terms of GDP per capita ranking, Brunei has actually been displaced by Singapore (currently No 1 in Asia 2009). In year 2000, Brunei's GDP per capita was US$43,299 while that of Singapore was US$32,858. Similarly, GDP per capita (based on PPP) growth rates from 1992 - 2008 shows that Brunei pales in comparison to its neighbours. Over this period, other Asean economies grew on average in excess of 4.4 per cent, while Brunei grew only 1.5 per cent.

Assuming constant population growth, PPP and the average growth rates above, a crude calculation places Brunei's GDP per capita in year 2020 at US$58,455 while that of Singapore at US$102,259. These figures may seem improbable to some, but clearly highlights the gradually growing disparity in standards of living between these countries. Over the past decades, the rest of Asean have had impressive growth while Brunei has remained somewhat stagnant. Bruneians are not much better off than they were 20 years back.

Koh Wee Chian