The Economic Activity of Brunei Darussalam

Probably, among the who’s who in the international jet set scene are the members of the Bolkiah family, the royal family of Brunei. They are indeed a fixture in such high profile parties because they can readily afford to be there as the income of the Sultanate of Brunei as a country goes directly to the coffers of the royal family.

Currently, Brunei is the third largest crude oil producer in the whole of Southeast Asia at the pace of 180,000 per day. Although, this may appear small peanuts to Kuwait’s oil production of about 2 million barrels per day, Brunei has the fourth largest production of LNG (liquefied natural gas) in the world.

Try visiting the country, probably, one thing one will not miss there is the presence of many vehicles with the international brand, Shell Petroleum’s logo, attached to it. Shell is Brunei’s partner in its oil production, exploration, extraction and everything else related to oil.

However, surprisingly, income from oil and its derivatives just account for just over 50% of GDP.  One may get the feeling that the country is very much driven by its oil economy but Brunei has other substantial sources of income aside from oil and LNG exports.  What most don’t know is that, the economic managers of Brunei have been very forward looking. The government of Brunei is constantly on the lookout for high yielding investments and business opportunities. Like for example, right now, the government of Brunei owns and manages a cattle-raising farm in Australia that may be bigger than Brunei itself. The government invested in this venture so that it won’t have to worry about importing beef and to secure a source of food for it’s population. Brunei is also a primary institutional customer of investment bankers who sells bonds, stocks and equity placements. So, at the moment, it is not purely oil that is whetting the economy of this Southeast Asia’s powerhouse but well thought out international investments as well.