BEB Q3 2008

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Brunei Darussalams GDPcontracted by 2.2 percent, year-on-year, in Q3 2008. This brought the

cumulative 9 months growth to 3.3 percent, compared to the same period last year. The oil and gas sector

contracted sharply, by 7 percent, in Q3 2008.

In the monetary sector,bothbroad money supply (M2) and narrow money supply (M1) grew by more

than 20 percent in Q3 2008. However, total loans disbursement to business sector increased only by 8.7

percent. Loans to deposit ratio (LDR) edged down to 41.1 percent in September 2008, from 50.1 percent in

September 2007.

Fiscal surplusin Q3 2008 was recorded at BND 2.8 billion. Revenue went up sharply by 71.1 percent on

the back of high oil prices, while expenditure was down by 25.1 percent.

Inflation in Q3 2008 was recorded at 3.1 percent, year-on-year. On a year-to-date basis (January-

September 2008) inflation was recorded at 2.2 percent. Inflation in the food and non-alcoholic beverages

items was the primary reason behind such a pressure.

External Trade statistics showed that the cumulative 9 months surplus in 2008 had reached almost

BND8 billion, driven by high oil prices (hence, oil revenues). In Q3 2008, Japan and Indonesia remained the

dominant export market, accounting for almost 64 percent of the total export.

OutlookData seems to indicate that the full 2008 picture will be mixed. Growth is expected to have gone

down sharply. Full year inflation for 2008 is expected to have been higher than the target rate of between 1-2

percent. Meanwhile, Brunei Darussalam is expected to have recorded surpluses in both the trade and fiscal

accounts.

Highlights in this issue

Brunei Economic Bulletin Editorial TeamEditors Director General, JPKE

Economic Expert, JPKE

Directors, JPKE

Assistant Directors, JPKE

ContentLayout and Design Md Azry Hj Tahir

Hj Mohammad Haimi

Yarmin@Yamin

BRUNEI ECONOMIC BULLETIN

September 2009olume 6 - Issue 3

Contents:

Real Sector and

Output

2

Monetary 8

Consumer Price

Index

18

External Trade 21

Oil and Gas 26

Outlook 29

Special Article I 30

Special Article II 39

Public Finance 12

Contributors Dr Adrian Panggabean

Asnawi Faisal Hj Kamis

Pg Metussin Pg Hj Tuah

Dk Norhanidah Pg Hj Masshor

Ruzanna Hj A Buntar

Norhasnizan Hj Abd Razak

Mohammad Noorul Aiman Hj Jaman

Rokiah Kesut

Ministry of CommunicationDEPARTMENTOF ECONOMIC

PLANNINGAND DEVELOPMENT

PRIME MINISTER'S OFFICE

BRUNEI DARUSSALAM Q3 2008 ECONOMIC REVIEW

OUTLOOK AND RECENT ECONOMIC DEVELOPMENTS

Agriculture Department, Ministry of

Industry and Primary Resources

Hjh Mariah Hj Yahya

Awang Gemok Hj Ghani

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Overall PerformanceThe economy of Brunei Darussalam contracted by 2.2 percent year-on-year (year-

on-year) in Q3 2008, after a 2.8 percent year-on-year contraction in Q2 2008

(Table 1.1). The countrys Q3 2008 constant price GDP dropped from

BND2,985.2 million in Q3 2007 to BND2,918.4 million in Q3 2008. Meanwhile,

GDP at current prices increased to BND5,720.2 million from BND4,527.5 million

in Q3 2007 and BND5,131.5 million in Q2 2008. GDP growth, on a quarter-on-

quarter (q-o-q) basis (non-seasonally adjusted) improved with a 5.2 percent growth

compared to a 3.9 percent contraction in Q2 2008. This brought the cumulative 9-

months year-on-year growth to -3.3 percent in 2008, compared to -0.4 during the

same period in 2007.

GDP by expenditureThe growth drivers in Q3 2008 were gross fixed capital formation, government

consumption expenditure and personal consumption expenditure (Table 1.2 and

Table 1.6).

Gross fixed capital formation expanded by 11.7 percent in Q3 2008, lower than the

12.1 percent in Q2 2008. This was largely due to a moderation of investment in the

construction sector from 7.3 percent in Q2 2008 to 3.2 percent in Q3 2008. On the

other hand, investment in machinery and equipment grew from 18.6 percent in Q2

2008 to 21.8 percent in Q3 2008.

Government consumption expenditure grew by 6.2 percent year-on-year, up from

0.4 percent in Q2 2008. This was on the back of a 6.1 percent increase in the total

government spending in wages and Other Charges Annually Recurrent, from

BND723.7 million in Q3 2007 to BND767.2 million in Q3 2008.

Meanwhile, personal consumption expenditure expanded by 5.5 percent year-on-

year, also an improvement from the Q2 2008 growth of 0.4 percent.

These expansions were offset by the fall in the export of goods and services and the

expansion in import of goods and services.

Export of goods and services declined further by 8.7 percent, following a 9.7

1.Real Sector and Output

Page 2

Brunei Darussalams economyshrank by 2.2% year-on-year inQ3 2008

Brunei Economic Bulletin

Table 1.1: GDP Q3 2008 vs. GDP Q3 2007 and GDP Q2 2008

Q3 2007 Q2 2008 Q3 2008

Growth in Q3 2008(%)

year-on-year

quarter-on-

quarter

GDP at Current Prices(BNDMillion)

4,527.5 5,131.5 5,720.2 26.3 11.5

GDP at 2000 Constant Prices(BNDMillion)

2,985.2 2,774.2 2,918.4 -2.2 5.2

Source: Department of Economic Planning and Development, Prime Minister's Office

The main growth drivers wereinvestment, government

consumption and personalconsumption.

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percent drop in Q2 2008. This was driven by a further contraction in the export of

goods by 9.6 percent, after a 12.6 percent drop in the last quarter. Export of

services also contracted by 2.5 percent in Q3 2008, down from a 12.1 percent

expansion in Q2 2008. Contributing to the decline in the export of goods was thedrop in the crude oil export by 19.4 percent from 164,077 barrels per day in Q2

2008 to 132,203 barrels per day in Q3 2008. Further, production of garments also

fell by 4.1 percent from 523,990 dozen in Q3 2007 to 502,565 dozen in Q3 2008.

However, export of LNG grew by 4.8 percent from 1,012,803 MMBtu per day to

1,060,973 MMBtu per day, during the same period.

Import of goods and services improved by 56.5 percent in Q3 2008, up from 4.2

percent in Q2 2008. This was mainly attributed to a double-digit growth of imports

of goods (79.9 percent year-on-year in Q3 2008 from 5.0 percent year-on-year in

Q2 2008). On the other hand, import of services declined by 0.6 percent year-on-

year in Q3 2008, from 2.6 percent growth in Q2 2008. The sharp increase in the

import of goods was mainly attributed to a jump in the level of import of high-

speed diesel fuels from BND21.7 million in Q3 2007 to BND608.3 million in Q3

2008.

GDP by production

The oil and gas sector shrank by 7.0 percent year-on-year in Q3 2008 (Table 1.3).

This was due to the fall in both the Oil and Gas Mining and Manufacture of

Liquefied Natural Gas (LNG) sub-sectors by 9.0 and 0.7 percent year-on-year,

respectively. The oil and gas sector made up 72.8 percent of Brunei Darussalams

nominal GDP in Q3 2008.

Page 3

Volume 6 - Issue 3

However, these were offset by thecontraction in export and increase

in import

Table 1.2 : GDP by expenditure (Q3 2008)

GDP atCurrentPrices

(BNDMillion)

GDP at 2000Constant

Prices(BNDMillion)

RealGrowthRates

(% y-o-y)

TOTAL GDP 5,720.2 2,918.4 -2.2

Personal consumption expenditure 1,044.2 1,052.1 5.5

Government consumption expenditure 960.6 941.3 6.2

Capital formation 846.5 737.4 11.7

Gross fixed capital formation 847.3 738.3 11.7

Construction 425.4 370.1 3.2

Machinery and equipment 421.9 368.2 21.8

Change in stocks -0.8 -0.9

Net exports of goods and services 2,130.2 -669.7

Exports of goods and services 4,392.7 1,570.0 -8.7

Exports of goods 4,094.2 1,357.5 -9.6

Exports of services 298.5 212.5 -2.5

less: Imports of goods and services 2,262.5 2,239.7 56.5

Imports of goods 1,766.0 1,826.3 79.9

Imports of services 496.5 413.5 -0.6

Statistical discrepancy 738.8 857.4


In terms of production, the oil andgas sector fell by 7.0 % year-on-

year

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The production of crude oil fell by 11.7 percent year-on-year, from 190,570 barrels

per day (bpd) in Q3 2007 to 168,213 bpd in Q3 2008 (Table 1.4). This was due to

the less than satisfactory production level of the oil wells. Similarly, the production

of natural gas fell by 3.0 percent year-on-year, from 1,241 MMscf per day in Q3

2007 to 1,204 MMscf per day in Q3 2008. The production of LNG dropped by 1.1

percent year-on-year, from 1,045,870 MMbtu per day in Q3 2007 to 1,033,951

MMbtu per day in Q3 2008.

The non-oil and gas sector improved by 2.6 percent year-on-year in Q3 2008

compared to a 0.7 growth recorded in Q2 2008. The government services recorded

an increase of 0.5 percent year-on-year in Q3 2008, slower than 0.8 percent year-


Page 4

GDP atCurrent Prices(BNDMillion)

GDP at 2000Constant Prices

(BNDMillion)

Real GrowthRates

(% y-o-y )

Oil & Gas Sector 4,161.9 1,404.0 -7.0

Oil and Gas Mining 3,561.7 1,035.8 -9.0

Manufacture of Liquefied Natural Gas (LNG) 600.2 368.3 -0.7

Non-Oil & Gas Sector 1,558.3 1,514.4 2.6

Government Services 566.1 543.6 0.5

Private 992.2 970.8 3.8

Vegetables, Fruits & Other Agriculture 7.7 9.5 18.6

Livestock and Poultry 12.3 14.4 11.6

Forestry 1.9 1.9 78.2

Fishery 10.9 9.0 -17.5

Manufacture of Wearing Apparel & Textile 21.3 29.7 -4.2

Other Manufacturing 16.5 16.8 6.8

Electricity and Water 30.0 22.6 0.6

Construction 176.1 163.4 2.8

Wholesale and Retail Trade 141.6 145.6 -2.5

Water Transport 38.4 47.0 24.7

Air Transport 38.6 27.2 8.1

Other Transport Services 14.8 19.8 12.7

Communication 73.9 76.0 2.1

Finance 129.9 117.9 0.5

Real Estate & Ownership of Dwellings 108.7 107.4 3.1

Hotels & Restaurants 12.5 11.1 1.9

Private Health and Education Services 22.1 21.2 -1.1

Business Services 106.4 99.1 11.1

Domestic Services 13.0 12.3 1.4

Other Private Services 15.6 18.8 25.6

Gross Domestic Product 5,720.2 2,918.4 -2.2

Indicators for the oil and gassectors all showed negative growthrates

Table 1.4 : Oil & Gas Sector (Q3 2008)

Growth rates(% y-o-y)

Oil & Gas Mining Value Added (VA) -9.0

LNG Manufacturing VA -0.7

Oil & Gas (VA) -7.0

Crude oil production -11.7

Natural gas production -3.0

LNG production -1.1


By contrast, the non-oil and gas

sector grew by 2.6 % year-on-year, with both the governmentservices and private sectorregistering positive growth

Table 1.3 : GDP by production (Q3 2008)


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on-year growth in the previous quarter. Meanwhile, the private services registered

an expansion of 3.8 percent year-on-year, an improvement from the growth of 0.7

percent year-on-year in Q2 2008.

The Vegetables, Fruits & Other Agriculture sub-sector recorded a growth of 18.6

percent year-on-year in Q3 2008 after growing by 26.7 percent year-on-year in Q2

2008. The growth was due to the increase in the production of vegetables and cut

flowers.

The Livestock and Poultry sub-sector continued to grow by recording an 11.6

percent year-on-year increase in Q3 2008, after registering a growth of 5.1 percent

year-on-year in the previous quarter. The increase production of broiler chicken

was one of the factors in that growth.

The Forestry sub-sector maintained its double-digit growth in Q3 2008 at 78.2

percent year-on-year, up from 51.1 percent year-on-year in Q2 2008. This was

mainly driven by the expansion in forestry output such as Bakau poles.

The Fishery sub-sector fell further by 17.5 percent year-on-year, following a year-

on-year contraction of 17.1 percent in the Q2 2008. It was the aquaculture industry,

specifically prawns, which contributed to the decline.

The non-oil and gas manufacturing sub-sector are the combination of the

Manufacture of Wearing Apparel & Textile and Other Manufacturing sub-sectors.

In Q3 2008, the Manufacture of Wearing Apparel & Textile sub-sector contracted

by 4.2 percent year-on-year on the back of lower garment production from 523,990

dozens in Q3 2007 to 502,656 dozens in Q3 2008. This was comparatively better

than the fall of 38.0 percent year-on-year recorded in Q2 2008. For the Other

Manufacturing sub-sector, the Q3 2008 positive year-on-year growth of 6.8 percent

was an improvement from Q2 2008 performance of 6.0 percent year-on-year

contraction. One factor that contributed to the growth was the increase in the

production of sawn timbers.

The Electricity and Water sub-sector went up by 0.6 percent year-on-year in Q3

2008 after growing by 0.2 percent year-on-year in Q2 2008. The production ofelectricity grew by 1.0 percent year-on-year in Q3 2008. This was offset by a 0.2

percent drop in water consumption.

The Construction sub-sector rose by 2.8 percent year-on-year in Q3 2008 after

falling by 1.0 percent year-on-year in Q2 2008. Imports of construction materials

such as sand, cement and stone & gravel went up in Q3 2008 year-on-year.

By contrast, the Wholesale and Retail sub-sector went down by 2.5 percent year-

on-year after a growth of 3.2 percent year-on-year in Q2 2008. The drop coincided

with a 9.4 percent year-on-year fall in personal loans from BND2,766.0 million in

Q3 2007 to BND2,506.0 million in Q3 2008.

Volume 6 - Issue 3

Page 5

The main contributors to realGDP growth were the

Construction (0.1 pp),

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The Water Transport sub-sectors performance improved further with a growth of

24.7 percent year-on-year, after growing by 12.1 percent year-on-year in Q2 2008.

The Air Transport sub-sector registered a growth of 8.1 percent year-on-year in Q3

2008. This was partly driven by the increase in the number of air passengers. Thepositive growth was an improvement after recording a contraction of 11.5 percent

year-on-year in the previous quarter. Other Transport Services sub-sector grew by

12.7 percent year-on-year compared to a growth of 38.2 percent recorded in Q2

2008. Similarly, the Communication sub-sector also registered a positive year-on-

year growth of 2.1 percent in Q3 2008. In Q2 2008, the sub-sector expanded by 6.2

percent year-on-year. Two indicators of the growth were the increase in the volume

of postal articles handled as well as the increase in the number of Brunet and e-

Speed subscribers.

The Finance sub-sectors experienced a growth of 0.5 percent year-on-year,

following an expansion of 12.3 percent year-on-year in Q2 2008. Income from bank

charges went up by 4.7 percent year-on-year, from BND15.7 million in Q3 2007 to

BND16.4 million in Q3 2008. Bank loans and advances grew by 2.0 percent year-

on-year.

The Real Estate and Ownership of Dwellings sub-sector recorded growth of 3.1

percent year-on-year in Q3 2008 after growing by 1.1 percent in the previous

period. Total mortgages rose by 18.2 percent year-on-year from BND958.0 million

in Q2 2008 to BND1,132.0 million Q3 2008.

The Hotel and Restaurant sub-sector grew by 1.9 percent year-on-year in Q3 2008

after registering a contraction of 5.1 percent year-on-year in the previous quarter.

This was in part due to the increase in the occupancy rates of major hotels from

about 37 percent in Q3 2007 to about 41 percent in Q3 2008. Further, the number of

air passengers grew 18.8 percent year-on-year in Q3 2008.

Private Health & Education Services contracted by 1.1 percent year-on-year in Q3

2008, an improvement from the previous quarters contraction of 4.1 percent.

Business Services sub-sector recorded growth of 11.1 percent year-on-year after

falling by 4.8 percent year-on-year in Q2 2008. Both the Domestic Services and

Other Private Services sub-sectors grew by 1.4 and 25.6 percent year-on-year,respectively.

Contribution to growth in real GDP

The oil and gas sector continued to pull down the overall real GDP growth by 3.5

percentage points (pp) in Q3 2008 (Table 1.5). This was mainly due to the poor

performance of the Oil and Gas Mining sub-sector, which reduced GDP growth by

3.4 pp. The Manufacture of LNG sub-sector cut down growth by 0.1 pp. In the

previous period, the sub-sector contributed positively by 0.7 pp.

The non-oil and gas sector prevented GDP growth from sliding down further by

contributing 1.3 pp to the overall GDP growth. This was an improvement of 0.4 pp


Page 6

and Business Services sub-sectors (0.3 pp)

Water Transport (0.3 pp)

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contribution growth in Q2 2008. Business Services sub-sector contributed 0.3 pp to

the overall growth compared to a negative 0.4 pp in the Q2 2008. Water Transport

sub-sectors pushed up growth by 0.3 pp, also an improvement from the previous

quarter of 0.1 pp growth contribution. Another sub-sector which performedrelatively well was construction, which contributed 0.1 pp to growth. In Q2 2008,

the contribution to growth was negligible.

Contribution to growth in total demand

In Q3 2008, total domestic demand continued to be the main contributor to growth

in total demand with 4.4 pp contribution (Table 1.6). Meanwhile, external demand

(export of goods and services) continued to offset the growth in total domestic

demand (shaved off 3.5 pp from growth) in Q3 2008.

Consumption expenditure was the main driver of growth within domestic demand

in Q3 2008, contributing 2.6 pp. Meanwhile, gross fixed capital formation

contributed 1.8 pp. Within consumption expenditure, both personal consumption

expenditure and government consumption expenditure contributed 1.3 pp each to

overall demand growth in Q3 2008.

Meanwhile, investment in machinery and equipments continued to be the main

contributor to growth within gross fixed capital formation, while, investment in

construction contributed 0.3 pp.

Volume 6 - Issue 3

Page 7

Q2 2008 Q3 2008

percentage points

TOTAL DEMAND -2.6 0.9

Total domestic demand 1.5 4.4

Final domestic demand 1.5 4.4

Consumption expenditure 0.2 2.6

Personal consumption expenditure 0.1 1.3

Government consumption expenditure 0.1 1.3

Gross fixed capital formation 1.3 1.8

Construction 0.5 0.3

Machinery and equipments 0.9 1.5

Changes in stocks -0.0 -0.0

External demand -4.1 -3.5

Source: Department of Economic Planning and Development, Prime Minister's Office.

Table 1.6: Percentage contribution to total demand growth at 2000 constant prices

Growth contribution(percentage points)

Q2 2008 Q3 2008

TOTAL GDP -2.8 -2.2

Oil & Gas Sector -3.2 -3.5

Oil and Gas Mining -3.8 -3.4

Manufacture of Liquefied Natural Gas (LNG) 0.7 -0.1

Non-Oil & Gas Sector 0.4 1.3

Business Services -0.4 0.3

Water Transport 0.1 0.3

Construction 0.0 0.1

Table 1.5: Contribution to GDP growth at 2000 constant prices of selected sectors (by Production)

Source: Department of Economic Planning and Development, Prime Minister's Office.

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Money supplyMoney supply in Q3 2008 expanded at a faster rate compared to Q2 2008 (Annex

1). Broad money (M2) increased by 23.2 percent year-on-year, compared to 11.6

percent year-on-year in Q2 2008. This translated to an increase in the stock of M2

from BND12,936.6 million at end of September 2007 to BND15,937.6 million at

end of September 2008. The expansion was attributed to an increase in fixed

deposit which rose by 31.3 percent year-on-year, from BND7,393.4 million to

BND9,703.5 million. Savings and others also rose by 3.9 percent year-on-year,

from BND2,603.9 million to BND2,706.6 million.

Narrow money (M1), an indicator of transaction balances, was up by 20.0 percent

year-on-year, from BND2,939.4 million to BND3,527.0 million due to

accumulation of demand deposits (Chart 2.1 and Annex 2.1). M1 growth of 20.0

percent in Q3 2008 represented a sharp increase compared to the Q2 2008 growth

of 7.9 percent year-on-year.

Assets and liabilities

Overall, the banking systems total assets recorded an increase of 20.4 percent from

BND15,480 million (end-September 2007) to BND18,632 million (Annex 2.2).

This was attributed to several factors. First, investment abroad through the banking

system rose by 41.0 percent from BND6,681.0 million to BND9,417.0 million.

Second, loans and advances increased by 2.0 percent from BND6,081.0 million to

BND6,200.0 million. Third, other investments was up by 12.9 percent from

BND1,251.0 million to BND1,412.0 million.

Meanwhile, investment in Brunei Darussalam rose of around BND32.0 million invalue from BND278.0 million to BND310.0 million and other assets also increased

from BND1,030.0 million to BND1,146.0 million during the same period.

2.Monetary Development


Page 8

Broad money (M2) increased by23.2% andnarrow money (M1) upby 20.0%

Chart 2.1: Money Supply

Source: Ministry of Finance

Banking assets rose by 20.4%.

Deposits registered growth of24.3%

0.00

2000.00

4000.00

6000.00

8000.00

10000.00

12000.00

14000.00

16000.00

18000.00

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

BNDmillion

M2 M1 Fixed deposit saving

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On the liabilities side, the total deposits registered an increase of 24.3 percent from

BND12,141.0 million at end of September 2007 to BND15,093.0 million at end of

September 2008. While time deposits rose by 31.3 percent from BND7,393.0

million to BND9,704.0 million, demand deposits grew by 25.1 percent fromBND2,144.0 million to BND2,682.0 million.

Savings growth was slower in Q3 2008 compared to Q2 2008. Savings rose by 4.8

percent, year-on-year this quarter compared to 4.0 percent year-on-year in Q2

2008. Other liabilities increased by 11.9 percent from BND2,472.0 million to

BND2,765.0 million. On the other hand, liabilities due to bank in Brunei

Darussalam decreased by end of September 2007 from BND303.0 million to

BND241.0 million by end of September 2008. Meanwhile, liabilities outside

Brunei Darussalam declined from BND563.0 million to BND532.0 million during

the same period.

Loans and advances

Gross private sector financing through the banking system grew by 2.0 percent to

BND6,201.0 million by end of September 2008 from BND6,081.0 million by end

of September 2007 (Annex 2.3). Total loan disbursement to business sectors

increased by 8.7 percent from BND2,357.0 million to BND2,563.0 million. Loans

to consumers were down by 2.3 percent from BND3,724.0 million to BND3,638.0

million during the same period. By end of September 2008, contributions of loans

to businesses and consumers to the total loans and advances were 41.3 and 58.7

percent compared to 38.8 percent and 61.2 percent by end of September 2007,

respectively.

The increase of total loans and advances were contributed by the increase in loans

and advances to economic sectors such as transportation (rose by 6.4 percent from

BND950.0 million by end of September 2007 to BND1,011.0 million); general

commerce sector (by 9.5 percent from BND547.0 million to BND599.0 million);

construction (by 5.7 percent from BND494.0 million to BND522.0 million);

professional services (by 25.4 percent from BND71.0 million to BND89.0 million);

agriculture sector (by 12.9 percent from BND31.0 million to BND35.0 million);

manufacturing sector (by 21.3 percent from BND230.0 million to BND279.0

million) and mortgage (by 18.2 percent from BND958.0 million to BND1,132.0million) during the same period.

Loans and advances to other sectors registered a downtrend. Loans and advances to

the credit and finance sector decreased by 17.6 percent from BND34.0 million to

BND28.0 million. Personal loans decreased by 9.4 percent from BND2,766.0

million to BND2,506.0 million. The ratio of total loans and advances to total

deposits (Loan-to-deposit ratio) by end of September 2008 declined to 41.1 percent

compared to 50.1 percent by end of September 2007. In other words, the banking

sector in Brunei Darussalam was flushed with funds.

Volume 6 - Issue 3

Page 9

Gross private sector financingthrough the backing system grew

by 2%. Loans to deposit ratio(LDR) was down to 41.1% in

September 2008 from 50.1% inSeptember 2007.

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Non-performing loans (NPLs)Total NPLs in the banking system rose by 5.8 percent from BND611.2 million by

end of September 2007 to BND646.6 million by end of September 2008 (Annex

2.4). NPL based on 60-90 days classification registered an increase of 105.8 percent

from BND33.9 million in September 2007 to BND69.7 million in September 2008

(Chart 2.3). The 91-120 days NPLs classification rose by 114.1 percent from

BND16.9 million to BND36.2 million. Meanwhile the above 120 days classification

declined by 3.5 percent, from BND560.4 million to BND540.7 million in the same

period.

Ratio of the total NPL to total loans outstanding in September 2008 was 10.4

percent compared to 10.1 percent in September 2007 (Chart 2.4). The 60-90 days

NPLs classification in September 2008 recorded a ratio of 1.1 percent compared to

0.6 percent in September 2007. The 91-120 days classification registered a ratio of

0.6 percent compared to 0.3 percent in the same period. Meanwhile, the ratio of the

above 120 days classification in September 2008 was 8.7 percent compared to 9.2percent in September 2007.

Ratio of the total NPLs to total deposits was 4.3 percent compared to 5.0 percent

during the same period.


Page 10

Chart 2.3: Non-performing loans, September 2008


NPL rose by 5.8%.

Ratios of the total NPL to loanoutstanding was 10.4% in

September 2008.


Chart 2.2: Direction of loans and advances (share), end September 2008

1% 1%11%

40%

20%

24%

3%

A gri cu lt ur e C re di t a nd F in an ce

Manufactur ing Transport at ion

Const ruction Genera l Commerce

Professional Services

69%

31%

Personal Loans Mortgage

0

100

200

300

400

500

600

Sep Dec Mar Jun Sep

2007 2008

BNDmillio

60 - 81 days 91 - 120 days > 120 days

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Volume 6 - Issue 3

Page 11

Chart 2.4 : Ratio of non-performing loans to total loans


0

2

4

6

8

10

12

Total NPL 60-90 days 91-120 days >120 days

Sep-07 Sep-08

%

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Overview

In Q3 2008, total revenue was recorded at BND3,878.1 million, up from

BND2,266.6 million in Q3 2007 (Table 3.1and Annex 3.1). The total expenditure,

on the other hand, was down to BND1,070.9 million in Q3 2008 from BND1,430.6

million in the same quarter last year. This brought a fiscal surplus of BND2,807.2

million in Q3 2008 (Annex 3.2and Chart 3.4).

The bulk of revenue was generated from the oil and gas sector (Table 3.1). In Q3

2008, the revenue from the oil and gas sector was BND3,658.9 million (94.3

percent). Meanwhile, the non-oil and gas sector revenue contributed BND219.2

million (5.7 percent) to the fiscal coffer. In comparison, the oil and gas sector and

non-oil and gas sector contributed BND2,089.9 million (92.2 percent) and

BND176.8 million (7.8 percent) to the total receipts in Q3 2007, respectively.

Total revenues and expenditures accumulated for the first 9 months of 2008

amounted to BND9,860.6 million and BND4,303.2 million, respectively. There has

been a significant jump in total revenues compared to BND6,149.2 million

registered during the same period in 2007 mainly attributed to the increase in prices

of oil and gas. On the other hand, total accumulated expenditures remained

relatively stable compared to BND4,406.9 million registered during the same period

in 2007.

Total revenue reached 67.8 percent of GDP in Q3 2008 compared to 50.1 percent of

GDP in Q3 2007 (Table 3.1). The oil and gas revenue surged to 64.0 percent of

GDP compared to 46.2 percent of GDP in Q3 2007 as oil and gas revenues

remained very high. The non-oil and gas revenue stood at 3.8 percent of GDP

compared to 3.9 percent of GDP in the same period in 2007. This showed that the

governments revenue had benefitted substantially from the high energy prices.

However, the lower ratio for the non-oil & gas revenue compared to a year ago

indicated that the countrys non-oil & gas industry had not grown over the last one

year.

3.Public Finance


Page 12

Total revenue increased by 71.1percent year-on-year, while total

expenditure down by 25.1percent. Surplus surged 235.8percent.

Total revenue reached 67.8% ofGDP in Q3 2008 compared to50.1% of GDP in Q3 2007.

Table 3.1: Revenue


2007 2008 2008

Q3 Q4 Q1 Q2 Q3 (Jan-Sept)

Total revenue (BNDMillion) 2,266.6 2,635.4 3,203.4 2,779.2 3,878.1 9,860.7

Oil and Gas revenue (BNDMillion) 2,089.9 2,359.1 2,663.3 2,606.4 3,658.9 8,928.6

Non-Oil and Gas revenue (BNDMillion) 176.8 276.3 540.1 172.8 219.2 932.1

Oil and Gas revenue (% of total revenue) 92.2 89.5 83.1 93.8 94.3 90.5

Non-Oil and Gas (% of total revenue) 7.8 10.5 16.9 6.2 5.7 9.5

Total revenue (% of GDP) 50.1 48.1 63.2 54.2 67.8 61.9

Oil and Gas revenue (% of GDP) 46.2 43.1 52.6 54.2 64 56.1

Non-Oil and Gas revenue (% of GDP) 3.9 5.0 10.7 3.4 3.8 5.9

Surplus (% of GDP) 18.5 22.9 23.4 30.5 49.1 34.9

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Government revenue

Total revenue comprised of tax and non-tax revenue (Table 3.2). Tax revenue

accounted for 70.2 percent of the total revenue in Q3 2008 (Chart 3.1). Thisincluded taxes on net income and profits, taxes on international trade and taxes on

goods and services The non-tax revenue accounted for the remaining 30.1 percent

and comprised of property income, administrative fees and charges and other non-

tax revenue.

Tax revenue

Taxes on net income and profits increased by 76.6 percent year-on-year from

BND1,512.1 million in Q3 2007 to BND2,669.6 million in Q3 2008 (Table 3.2).

This was mainly attributed to the surge in global oil prices that had made the

corporate taxes from oil and gas production to rise sharply. Corporate tax receipts

from oil rose 76.6 percent year-on-year from BND1,510.7 million Q3 2007 to

BND2,668.3 million in Q3 2008.

Taxes on international trade (comprised of import duties and export taxes) rose by

22.9 percent from BND29.1 million in Q3 2007 to BND35.8 million. Taxes on

tobacco were down by 8.0 percent from BND4.5 million to BND4.2 million.

Meanwhile, taxes of motor vehicles increased by 22.6 percent from BND15.8

million to BND19.4 million.

Taxes on goods and services, comprising of licenses on financial companies and

others, as well as excise duties increased by 19.6 percent from BND3.9 million in

Q3 2007 to BND4.7 million in Q3 2008.

Volume 6 - Issue 3

Page 13

Tax and non-tax revenue, formed69.9 and 30.1 percent of the total

revenue in Q3 2008, respectively

Chart 3.1: Share of tax and non-tax revenue of total revenue


Taxes on net incomes up by 76.6%year-on-year; taxes on

international trade rose by 22.9%year-on-year; and taxes on goodsand services increased by 19.6%

year-on-year.

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Q3 Q4 Q1 Q2 Q3

2007 2008

Tax revenue Non-tax revenue

%

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Non-tax revenueOverall, the non-tax revenue rose by 61.9 percent year-on-year from BND721.5

million in Q3 2007 to BND1,168.0 million in Q3 2008 (Table 3.2and Chart 3.2).

In Q3 2008, the non-tax revenue contributed 30.1 percent of the total revenue. Non-

tax revenue, comprised mainly of the property income from the oil sector (oil and

gas royalties and dividend paid by oil companies). The contribution of the oil and

gas royalties increased by 53.8 percent from BND233.3 million in Q3 2007 to

BND358.8 million in Q3 2008. Payment of dividend rose by 73.5 percent from

BND410.7 million to BND712.5 million, during the same period.

Meanwhile, the property income from the non-oil and gas sector (other royalties,

rent and interest and others) was up by 147.0 percent from BND12.7 million in Q3

2007 to BND31.4 million in Q3 2008.

Another component of the non-tax revenue is the administrative fees and charges on

sales of goods and fines, which recorded an increase of 0.5 percent (from BND63.9

million in Q3 2007 to BND64.2 million in Q3 2008). This was due to a decline in

receipts from telecom and utilities fees and charges from BND40.8 million to

BND35.8 million. Meanwhile, other non-tax revenue increased from BND 1 million

in Q3 2007 to BND1.1 Million in Q3 2008.

The remaining component of the non-tax revenue, other non-tax revenue, showed a

marginal increase of only BND0.1 million during the same period.


Page 14

Table 3.2: Tax revenue BND Million

Source : Ministry of Finance

Non-tax revenue rose by 61.9%and contributing 30.1% to total

revenue

2007 2008 2008

Q3 Q4 Q1 Q2 Q3 (Jan- Sept)

Taxes on net income and profits 1,512.1 1,681.7 1,741.8 1,787.7 2,669.9 6,199.1

Taxes on international trade 29.1 36.0 33.2 32.5 35.8 101.5

Taxes on goods and services 3.9 5.6 4.7 3.9 4.7 13.3

Total tax revenue 1,545.1 1,723.3 1,779.7 1,824.1 2,710.1 6,313.9

Property income 656.6 833.0 1,161.1 890.3 1,102.7 3,154.1

Administrative fees and chargeson goods and fines

63.9 78.1 261.6 63.6 64.2 389.4

Other non-tax revenue 1.0 1.0 1.0 1.0 1.1 3.1

Total non-tax revenue 721.5 912.1 1,423.7 954.9 1,168.0 3546.6

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Expenditure

The total expenditure recorded a decline of 25.1 percentfrom BND1,430.6 million

in Q3 2007 to BND1,070.9 million in Q3 2008 (Table 3.3and Annex 3.2). It stood

at 18.7 percent of GDP in Q3 2008 compared to 31.6 percent of GDP in Q3 2007

(Table 3.3). The decline was attributed to a sharp drop in charged and Other

Charges Special Expenditure (OCSE).

Page 15

Chart 3.2 : Non-tax revenue


Expenditure was down by 25.1percent year-on-year. It stood

at18.1% of GDP in Q3 2008compared to 31.6% of GDP in Q3

2007.

Chart 3.3: Expenditure


Table 3.3: Fiscal Spending


Particulars2007 2008 2008

Q3 Q4 Q1 Q2 Q3 (Jan-Sept)

Total expenditure (BNDMillion) 1430.6 1380.1 2019.5 1212.8 1070.9 4303.2

Current expenditure (BNDMillion) 1069.2 1190.0 1584.3 1081.1 874.4 3539.8

Capital expenditure (BNDMillion) 361.4 190.1 435.2 131.7 196.6 763.4

Total expenditure (% of GDP) 31.6 25.2 39.9 23.6 18.7 27

Current expenditure (% of GDP) 23.6 21.7 31.3 21.1 15.3 22.2

Capital expenditure (% of GDP) 8.0 3.5 8.6 2.6 3.4 4.8

Volume 6 - Issue 3

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

Q3 Q4 Q1 Q2 Q3

2007 2008

Oil & gas sector Other Administrat ive fees and charges Other non-tax revenue

BND '000

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

Q3 Q4 Q1 Q2 Q32007 2008

BNDmillion

Current Capital Total Expenditure

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Current expenditure

On a year-on-year basis, the current expenditure was down by 18.2 percent from

BND1,069.2 million in Q3 2007 to BND874.4 million in Q3 2008 (Table 3.3). This

was due to a decrease in charged expenditure by 69.0 percent from BND345.5

million to BND107.1 million (Annex 3.2). Meanwhile, wages & salaries and

OCAR increased by 3.0 percent from BND388.4 million to BND400.2 million and

by 9.5 percent from BND335.2 million to BND367.0 million, respectively. Current

expenditure accounted for 81.6 percent of the total expenditure in Q3 2008

compared to 74.7 percent in Q3 2007

In Q3 2008, current expenditure stood at 15.3 percent of GDP compared to 23.6

percent of GDP in Q3 2007 as charged expenditure dropped while wages & salariesand OCAR grew (Annex 3.2).

Capital expenditure

Capital expenditure as a proportion to total expenditure fell to 18.4 percent

compared to 25.3 percent in Q3 2007. Capital expenditure comprised of OCSE and

development expenditure, which in total declined by 45.6 percent from BND361.4

million in Q3 2007 to BND196.6 million in Q3 2008 (Table 3.3).

OCSE had declined by 74.7 percent year-on-year from BND228.0 million to

BND57.7 million during the same period. Meanwhile, development expenditure

grew by 4.1 percent from BND133.5 million to BND138.9 million.

In Q3 2008, capital expenditure dropped to BND196.6 million (3.4 percent) of GDP

compared to BND361.4 million (8.0 percent) of GDP in Q3 2007 as OCSE

decreased sharply while development expenditure remained relatively stable (Table

3.3).

Fiscal balance

The fiscal balance in Q3 2008 recorded a surplus of BND2,807.2 million, an

increase of 235.8 percent from BND836.0 million in Q3 2007. This was attributed

to a 71.1 percent increase in revenue in combination with a 25.1 percent decrease in

expenditure. The fiscal surplus rose to 50.1 percent of GDP in Q3 2008 compared

to 18.5 percent of GDP in Q3 2007 as the oil and gas revenue remained very high

while the non-oil and gas revenue remained relatively stable (Table 3.1, Chart 3.5

and Annex 3.2).


Page 16

Capital expenditure declined year-on-year by 45.6% as a result of

higher RKN projects spending andlower OCSE spending.

Fiscal surplus reached 49.1% ofGDP in Q3 2008 compared to

18.5% of GDP in Q3 2007.

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Page 17

Chart 3.4: Fiscal position


Chart 3.5: Public finance


-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

Q3 Q4 Q1 Q2 Q3

2007 2008

BNDmillion

Total revenue Total expenditure Budget surplus/ deficit

Volume 6 - Issue 3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2007 2008

%ofnominalG

DP

Revenue (%of GDP) Expenditure (%of GDP) Fiscal Balance (%of GDP)

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Page 18

The average consumer price index in Q3 2008 was recorded at 105.9 (Table 4.1

and Chart 4.1). This translated to an average year-on-year inflation rate of 3.1

percent. On a year-to-date basis (January to September 2008), general prices have

gone up by 2.2 percent.

Price pressures from Food and Non-Alcoholic Beverages contributed 1.5

percentage points to the overall CPI inflation in Q3 2008 (Table 4.2). Five other

4.Consumer Price Index

Table 4.1: CPI Q3 2008 Key figures


Average inflation rate in Q3 2008 was3.1 percent, year-on-year drivenmainly by higher index of Food and

Non-Alcoholic Beverages as well asMiscellaneous Goods and Services

No Major Groups

Weight(%)

Index % Change

Q32007

Q22008

Q32008

Q32008/

Q22008

Q32008/

Q32007

Overall Index 100 102.7 105.1 105.9 0.8 3.1

IFood and Non-AlcoholicBeverages

28.8 104.2 107.9 109.6 1.6 5.2

II Clothing and Footwear 5.6 89.1 92.6 90.0 -2.8 1.0

IIIHousing, Water, Electricity andMaintenance

8.8 96.7 96.8 97.2 0.4 0.5

IVHousehold Goods, Servicesand Operation

8.6 93.1 95.3 95.4 0.1 2.5

V Transport 22.5 107.0 108.5 109.5 0.9 2.3

VI Communication 5.5 88.3 88.2 88.1 -0.1 -0.2

VII Education 4.7 98.0 98.1 98.0 -0.1 0.0

VIII Medical and Health 1.0 101.6 102.7 102.6 -0.1 1.0

IX Recreation and Entertainment 8.1 121.1 124.6 127.1 2.0 5.0

XMiscellaneous Goodsand Services

6.4 107.4 111.5 111.3 -0.2 3.6

Chart 4.1: CPI and year-on-year change


104.6

105.9

105.1

103.6

102.7102.7

102.2

-0.6

1.2

3.1

2.32.3

0.4

0.2

100

101

102

103

104

105

106

107

Q107 Q2 07 Q3 07 Q4 07 Q108 Q2 08 Q308

Index(2002=100)

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Y-O-Y%Change

CPI %Change

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groups of commodities contributed to inflation in Q3 2008. They are: Transport;

Recreation and Entertainment; Miscellaneous Goods and Services; Household

Goods, Services and Operation; and Clothing and Footwear.

Recent developments in the CPI

The increase in CPI in Q3 2008 was primarily led by a 5.2 percent increase in the

index of Food and Non-Alcoholic Beverages (Annex 4.1). Higher prices were

recorded for Cooking Oil (40.8 percent); Noodle (30.3 percent); Flour (17.1

percent); Cocoa-Based and Other Beverages (11.0 percent); and Milk (7.9 percent).

The Food/Drink Away from Home sub-group of indices increased by 5.5 percent,

year-on-year.

Prices in the Recreation and Entertainment group also contributed significantly to

the price pressure. On the Recreation side, upward pressure on prices came from

Other Recreations and Entertainments (increased 0.9 percent). On the Hobbies and

Other Miscellaneous Expenditure side, upward pressure came from Holiday

Package Expenses, which edged up 5.4 percent;and Pets and Related Equipment,

which rose by 15.9 percent.

Prices in the Miscellaneous Goods and Services group of commodities also

continued to contribute significantly to the price pressure, coming in at 3.6 percent,

year-on-year. Within this group, Ladies Personal Effects section posted the highest

increase of 16.4 percent, year-on-year. Items within this section include gold and

watch.The cost of Ladies Personal Care also contributed to the upward pressure on

prices, by 6.4 percent.

The increase in prices within the group of Household Goods, Services and

Operation averaged at 2.5 percent. Within this group, all section indices except for

Household Furnishings posted higher prices. Household Operation, which

comprises of items such as washing detergent; plastic bucket; and plugs, registered

the highest increase of 5.0 percent, year-on-year. Meanwhile, Other Household

Services, which comprises of dry cleaning; rubbish collection; and grass cutting

services, rose 4.9 percent.

The 2.3 percent increase in the major group of Transport was mostly due to a 3.1

percent increase in the cost of purchasing vehicles. Another significant contributor

was the cost of airfare, which rose by 6.2 percent, year-on-year.

Volume x - Issue x

Page 19

Table 4.2: CPI growth decomposition analysis Q3 2008 (year-on-year)


Major Groups % Points

Food and Non-Alcoholic Beverages 1.5

Transport 0.5

Recreation and Entertainment 0.4

Miscellaneous Goods and Services 0.2

Household Goods, Services and Operation 0.2

Clothing and Footwear 0.1

Overall CPI 3.1

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The index of Clothing and Footwear rose by 1.0 percent, year-on-year. All the sub-

groups under Clothing and Footwear posted higher indices, and this could be partly

attributed to prices rebounding after the Mid-Year Sales (22 June 3 August).

The index of Medical and Health also increased 1.0 percent, year-on-year. Prices of

Proprietary Medicines and Supplies and Therapeutical Appliances increased 2.1 and

1.7 percent, respectively. However, the price of Medical Treatment fell by 0.7

percent.

Higher prices of Housing Insurance (5.7 percent) and Maintenance and Minor

Repairs (2.6 percent) raised the index of Housing, Water, Electricity and

Maintenance by 0.5 percent.

The only major index that fell in Q3 2008 is for Communication, by 0.2 percent.

This was due mainly to a 1.0 percent fall in the cost of Instruments including

Accessories.

Finally, the index for Education was unchanged. An increase of 0.4 percent in the

cost of School and Other Fees were mitigated by fall in the cost of School

Textbooks and Stationery and Computer and Accessories (1.3 and 0.7 percent,

respectively).


Page 20

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5.External Trade

Overall Trend

Total external trade (defined as exports plus imports) expanded by 45.0 percent

year-on-year in Q3 2008 after a 29.6 percent growth in Q2 2008 (Table 5.1). It

amounted to BND5,303.2 million in Q3 2008 compared to BND3,656.9 million in

Q3 2007.

Total exports grew by 52.7 percent year-on-year in Q3 2008, primarily driven by

higher energy prices (Table 5.2). Imports also grew by another 23.1 percent.

Such development brought the countrys trade balance to BND2,971.4 million in

Q3 2008, an increase of 68.6 percent year-on-year compared to BND1,761.9

million in Q3 2007.

Exports

The Q3 2008 export proceeds of BND4,137.3 million were mainly generated from

three main commodities: oil, LNG and garments.

Oil exports, which accounted for 53.1 percent of the total exports in Q3 2008,

remained Brunei Darussalams leading source of foreign exchange receipts (Chart

5.1 and Table 5.3). Exports revenue from this commodity recorded a surge of 24.9

percent to BND2,194.9 million in Q3 2008 as oil prices continued to rise since the

Volume x - Issue x

Page 21

Table 5.1: External trade


Table 5.2: External trade year-on-year percentage growth


The Size of Brunei Darussalamsexternal trade was up from

BND3,659.9 million in Q3 2007 toBND5,303.2 million in Q3 2008

Higher export receipt was primarilydriven by higher energy prices

The volume of oil export dropped

while the prices of oil shot up

2007 2008

Q1 Q2 Q3 Q4 Q1 Q2 Q3

% change

Exports -14.3 -11.7 -14.2 24.1 34.7 36.8 52.7

Domestic Exports -14.4 -12.0 -15.1 23.7 35.8 37.7 55.5

Re-Exports -13.4 1.5 37.5 45.1 -15.0 -0.3 -43.4

Imports 22.4 10.1 37.5 7.4 12.7 4.0 23.1

Balance of Trade -22.7 -18.2 -28.6 29.6 42.6 49.8 68.6

Total external trade -8.6 -7.7 -4.9 20.7 30.1 29.6 45.0

2007 2008 quarter-on-

quarter

year-on-yearQ1 Q2 Q3 Q4 Q1 Q2 Q3

BND million% change in

Q3 2008

Exports 2,604.5 2,716.3 2,709.4 3,526.1 3,507.0 3,716.5 4,137.3 11.3 52.7

Domestic Exports 2,547.8 2,654.8 2,633.2 3,457.6 3,458.8 3,655.2 4,094.2 12.0 55.5

Re-Exports 56.7 61.5 76.2 68.5 48.2 61.3 43.1 -29.7 -43.4

Imports 689.7 770.0 947.5 758.7 777.2 800.9 1,165.9 45.6 23.1

Balance of Trade 1,914.8 1,946.3 1,761.9 2,767.4 2,729.8 2,915.6 2,971.4 1.9 68.6

Total external trade 3,294.2 3,486.3 3,656.9 4,284.8 4,284.2 4,517.4 5,303.2 17.4 45.0

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first quarter of 2007. The weighted average crude oil price for Brunei Darussalam

was at USD126.2 per barrel in Q3 2008 compared to USD77.4 per barrel in Q3

2007. The total value of oil exports increased year-on-year despite a substantial

decline in oil exports volume. It fell by 19.4 percent (from 164,077 barrels per dayin Q3 2007 to 132,203 barrels per day in Q3 2008).

LNG, the second largest source of foreign exchange receipt (45.2 percent in terms

of share) rose by 125.1 percent to BND1,869.4 million in Q3 2008 from BND830.6

million a year ago (Table 5.3). The increase was attributed to both higher LNG

prices and exports volume. LNG prices stood at USD14.2 per MMBtu in Q3 2008

compared to USD6.0 per MMBtu in Q3 2007. Exports volume grew by 4.8 percent

to 1,060,973 MMBtu per day in Q3 2008 compared with 1,012,803 MMBtu per day

in Q3 2007.

Garments made up around 0.7 percent of total exports (Chart 5.1). Its exports

proceeds declined by 34.2 percent on the back of lower garment production from

523,990 dozen in Q3 2007 to 502,656 dozen in Q3 2008.

The remaining 1.1 percent of Brunei Darussalams total export consisted of re-

export of Food and Beverages and Tobacco, Crude Materials Inedible, Mineral

Fuels, Animal and Vegetable Oils and Fats, Chemicals, Manufactured Goods,

Machinery and Transport Equipment, Miscellaneous Manufactured Articles and

Miscellaneous Transactions. Re-export of Machinery and Transport Equipment

made up of the biggest share at 62.6 percent of the total re-export value.


Page 22

Export proceeds from LNG rose.Both the volume and price of

LNG rose in Q3 2008

Production of garments fell by 4.1percent

Chart 5.1: Percentage distribution of export in Q3 2008


Crude Oil, 53.1%

LNG, 45.2%

Garments, 0.7%Others, 1.1%

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Direction of trade

Brunei Darussalams top four export destinations in Q3 2008 were Japan,

Indonesia, South Korea and Australia (Table 5.4). Altogether, they accounted for

94.0 percent of Brunei Darussalams total export in this quarter. Mineral fuels are

the major export commodities, which accounted for almost 100 percent of the total

export to these countries.

Japan remained the dominant export market for Brunei Darussalam accounting for

41.9 percent of total export, followed by Indonesia (21.9 percent), South Korea

(15.3 percent) and Australia (14.9 percent).

In Q3 2008, Brunei Darussalams export to South Korea expanded by 98.9 percent,

while export to Japan expanded by 86.0 percent, Indonesia by 79.5 percent and

Australia by 51.8 percent.

Imports

Brunei Darussalams total imports in Q3 2008 stood at BND1,165.9 million (Table5.5). Machinery & Transport Equipments, contributed 48.2 percent to Brunei

Darussalams total imports. In Q3 2008, its imports bill stood at BND562.2

million. In comparison, the Q3 2007 figure was BND446.4 million.

Imports of Manufactured Goods in Q3 2008 rose by 34.8 percent, year-on-year.

This group of commodity accounted for 19.4 percent of the total imports. Food and

Live Animals accounted for 10.9 percent of the total imports. The value was

BND127.4 million. Imports of this commodity group increased by 12.5 percent

year-on-year.

Volume 6 - Issue 3

Page 23

In Q3 2008, Japan and Indonesiaremained the dominant export

market for Brunei Darussalam,accounting for almost 64 percent

of total export.

Most of the countrys importcomprised Of Mineral Fuels,Lubricants & Related Materials,

Machinery and TransportEquipments and Manufactured

Goods. These three groups

accounted for almost 82 percent ofthe total import.

Table 5.3: Export by major commodities


Table 5.4: Top four export market


Q3 2007 Q3 2008Share in Q32008 (%)

year-on-year


Q3 2008

Japan 931.2 1,731.9 41.9 86.0

Indonesia 504.6 905.8 21.9 79.5

South Korea 319.2 635.0 15.3 98.9

Australia 405.4 615.4 14.9 51.8

2007 2008quarter-on-

quarter

Year-on-yearQ3 Q1 Q2 Q3

(BND million)

% change in

Q3 2008

Crude Oil 1758.0 2090.7 2337.4 2194.9 -6.1 24.9

LNG 830.6 1332.2 1279.1 1869.4 46.1 125.1

Garments 40.9 34.6 37.5 26.9 -28.3 -34.2

Others 79.9 49.5 62.5 46.1 -26.2 -42.3

Total Exports 2709.4 3507.0 3716.5 4137.3 11.3 52.7

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Page 24

Miscellaneous Manufactured Articles accounted for another 8.0 percent of the total

imports. In Q3 2008, the bill was BND92.8 million. Miscellaneous Manufactured

Articles imports, however, decreased by 17.9 percent, year-on-year.

Accounting for 6.1 percent of the aggregate imports bill was payments for

Chemicals, which, in Q3 2008 amounted to BND71.6 million or grew by 19.7

percent, year-on-year (Chart 5.2).

Table 5.5: Import by commodity section


2007 2008 quarter-on-

quarter

year-on-yearQ3 Q1 Q2 Q3

(BND million)% change in

Q3 2008

Food & Live Animals 113.2 98.7 117.9 127.4 8.1 12.5

Beverages & Tobacco 20.0 17.0 20.7 22.0 6.3 10.0

Crude materials, Inedibleexcept Fuels

4.8 4.0 5.9 6.2 5.1 29.2

Mineral fuels, Lubricants &Related Materials

12.7 6.1 23.6 43.8 85.6 244.9

Animal & Vegetable Oils &Fats

3.4 5.0 4.4 4.4 0.0 29.4

Chemicals 59.8 62.9 66.2 71.6 8.2 19.7

Manufactured Goods 167.9 183.8 208.3 226.4 8.7 34.8

Machinery & TransportEquipments

446.4 330.8 277.0 562.2 103.0 25.9

Misc. Manufactured Articles 113.1 67.1 72.3 92.8 28.4 -17.9

Misc. Transactions &Commodities, n.e.c

6.1 1.8 4.7 9.0 91.5 47.5

Total Import 947.5 777.2 800.9 1,165.9 45.6 23.1

Chart 5.2: Import by major commodity in Q3 2008


Foo d & Live Animals, 10.9%

M achinery & Transport

Equipments, 48 .2%

M anufactured Good s, 19.4%

M isc. Manufactured articles,

8.0%

Chemicals, 6.1%

Others, 7.4%

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Imports Market

Singapore was the biggest source of imports in Q3 2008, accounting for 32.0

percent share. Its imports value increased by 14.3 percent from BND326.4 million

to BND373.2 in Q3 2008. Machinery and Transport Equipment was the majorimport commodity from Singapore.

Peninsular Malaysia fell to the second largest source of imports in Q3 2008 with

15.3 percent share (Table 5.6). Food and Live Animals was the biggest imports

commodity.

The rest of Brunei Darussalams import came from U.S.A (9.9 percent), China (6.5

percent) and Japan (6.0 percent).

Table 5.6: The main source of import


Q3 2007 Q3 2008Share in Q3 2008

(%)

year-on-year


Q3 2008

Singapore 326.4 373.2 32.0 14.3

Peninsular Malaysia 134.4 178.6 15.3 32.9

U.S.A 71.0 114.9 9.9 61.8

China 68.9 75.3 6.5 9.3

Japan 59.4 69.5 6.0 17.0

Singapore, with 32.0 percentshare, was the countrys biggest

source of imports

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Page 26

Crude oil priceThe weighted average crude oil price index of Brunei Darussalam rose by 63.0

percent from 260.6 in Q3 2007 to 424.9 in Q3 2008 (Annex 6.1). On a quarter-on-

quarter (q-o-q) basis, the weighted average crude oil price index of Brunei

Darussalam decreased by 2.1 percent from 434.1 in Q2 2008 to 424.9 in Q3 2008.

In July 2008, the weighted average crude oil price (WACOP) of Brunei Darussalam

was USD142.7 per barrel, which was the highest price ever recorded for Brunei

Darussalam. On a month-on-month (m-o-m) basis, it grew by 5.8 percent compared

to USD134.9 per barrel in June 2008.

The soaring prices in July 2008 were contributed by a meagre Q2 2008 OECD

stock build and tight global distillate balance. Crude disruption in the North Sea,

Nigeria and Iraq were also other contributing factors to the oil price increase.

Prices in August 2008 decreased 13.9 percent (m-o-m) to USD122.8 per barrel. The

average world price of oil (all countries spot price FOB weighted by estimated

export volume) for August 2008 was USD114.0 per barrel. The increase in crude

supplies from OPEC, weaker OECD demand and the first seasonal US Gulf

hurricanes passed without anything more than precautionary shut-ins that had led to

the decrease in oil prices in August 2008.

September 2008 saw a further decline in the crude oil price by 10.5 percent to

USD109.9 per barrel compared to the August 2008 price. The decline was due to a

falling oil demand by the United States and other developed nations amid global

economic slowdown and financial crisis.

As a whole, the WACOP of Brunei Darussalam in Q3 2008 was USD126.2 per

barrel (Chart 6.1). Meanwhile, the average world price of oil for Q3 2008 was

USD115.2 per barrel (Chart 6.2).

6.Oil and Gas

0

20

40

60

80

100

120

140

USD/Barrel

0

2

4

6

8

10

12

14

16

USD/MMBtu

Crude Oil Price 65.0 76.7 77.4 96.5 100.2 128.9 126.2

LNG Price 5.7 5.9 6.0 7.5 10.1 11.8 14.2

Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008

Chart 6.1: Brunei Darussalam's Weighted Average Crude Oil and LNG Price

Source: Petroleum Unit, Prime Ministers Office

The weighted average crude oilprice index of Brunei Darussalam

rose by 63.0 percentyear-on-year

July 2008 marked the periodwhen Brunei Darussalamsweighted average crude oil price

reached USD142.7 per barrel

Crude oil price in August 2008fell by 13.9 percent on a month-on-month basis

Crude oil prices continued theirdownward slide in September

2008

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Crude oil production

The production of crude oil in July 2008 was 161,132 barrels per day (bpd) (Annex

6.3). In August 2008, on a m-o-m basis, the production went up by 10.9 percent to

178,729 bpd but decreased again by 7.9 percent in September 2008 to 164,665 bpd.

As a whole, the average crude oil production in Q3 2008 stood at 168,213 bpd,reflecting a 11.7 percent decrease year-on-year (Chart 6.3). The decline was

contributed by a below satisfactory production level from the existing wells.

Volume 6 - Issue 3

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* Note: Quarterly all countries spot price FOB weighted by estimated export volume.Source: Petroleum Unit, Prime Ministers Office and Energy Information Administration

Chart 6.2: Brunei Darussalam's Weighted Average Crude Oil Price versusWorld's Weighted Average Crude Oil Price*

Chart 6.3: Brunei Darussalam's Average Crude Oil and LNG Production

Source: Petroleum Unit, Prime Ministers Office

40

50

60

70

80

90

100

110

120

130

140

USD/Barrel

Brunei Darussalam 65.0 76.7 77.4 96.5 100.2 128.9 126.2

World 54.7 65.0 71.9 85.2 93.5 117.5 115.2

Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008

150,000

160,000

170,000

180,000

190,000

200,000

210,000

barrels

pe

r

day

800,000

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

1,150,000

M

MBtu

per

day

Crude Oil Production 202,441 190,615 190,570 191,853 192,633 159,811 168,213

LNG Production 1,038,070 950,952 1,045,870 1,050,814 1,096,669 890,684 1,033,951

Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008

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LNG price

LNG price registered a 136.5 percent increase in Q3 2008 year-on-year, from

USD6.0 per million British thermal units (MMBtu) in Q3 2007 to USD14.2 per

MMBtu (Chart 6.1). On a q-o-q basis, LNG price increased by 20.4 percent fromUSD11.8 in Q2 2008.

During this period, two LNG cargoes were sold in the spot market at a higher price

levels reaching USD20.0 per MMBtu, which resulted in the highest cargo value

ever achieved by Brunei Darussalam.

LNG production

LNG production in Q3 2008 was registered at 1,033,951 MMBtu per day (Annex

6.4). This translated to a year-on-year decrease of 1.1 percent (and a q-o-q increase

of 16.1 percent). In comparison, the average LNG production was 1,045,870MMBtu per day in Q3 2007 and 890,684 MMBtu per day in Q2 2008 (Chart 6.3).

LNG price reached USD14.2 perMMBtu in Q3 2008

Two LNG cargoes were sold atUSD20.0 per MMBtu in the spotmarket, which was the highest

cargo value ever achieved inBrunei Darussalam

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Outlook

Volume 6 - Issue 3

Page 29

The economy in Q3 2008 had shown mixed results. In terms of output dynamics,

the implementation of National Development Plans projects had not picked up

pace as expected, therefore limiting the amount of capital expenditure being

injected into the economy. Oil production had been low, amid rising oil prices to

reach a very high level ever seen. Although the high oil prices had been very

favorable to Brunei Darussalam fiscal coffer, the average oil production in Q3 2008

of 168,213 barrels per day (ie, represented an almost 12 percent decline, year-on-

year) had pulled down the countrys overall GDP growth rate.

There were also signs that the banking sector had not been very successful in

channeling funds to businesses. Loan growth had been much lower compared to

growth in savings/deposits, leading to a fall in the loan-to deposit ratio (LDR).

Meanwhile, non-performing loans figure (in proportion to total loan balances) had

stayed at around 10 percent. This not only reflected a banking system that was

flushed with funds (ie, too much liquidity within the banking system), but also weak

lending activity - arguably due to sluggish business environment.

Given the negative growth rate in three consecutive quarters of 2008, it is very

likely that Brunei Darussalams economy will experience a strong negative growth

in 2008.

On the price front, situation had not been particularly encouraging, too. Price pressures continued to build up and resulted in a year-to-date (ie, January to

September 2008) inflation rate of 2.2 percent. This was above the earlier forecast of

between 1-2 percent for 2008.

Going forward, improvement in the implementation rate of RKN projects is

expected. However, low oil production in 2007 is expected to continue through the

rest of 2008. The volume of Brunei Darussalams exports, which consist of

primarily oil and gas, is expected to remain at the level seen in the first half of 2008.

Due to the expectation that global prices of oil will remain above its cost of

production in the remaining quarter of 2008, Brunei Darussalam is expected to

continue yet another year of surplus in both in the current and the fiscal accounts.

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STATUS AND UPDATES ON ICT IN BRUNEI DARUSSALAMOver the decade, ICT in Brunei Darussalam has undergone tremendous changes in

terms of policy and regulatory reforms, a significant increase in the number of ICT

service providers and the provision of ICT services as well as progressive

development of ICT initiatives.

ICT has been identified as one of the key catalysts for sustainable socio-economic

development. The ICT sector was introduced for the first time in the 8th National

Development Plan (NDP) and will be further promoted and prioritized in RKN

2007-2012. The focus will be towards enhancing ICT capacity-building including

infrastructure and human resource as well as full integration in both government

services and business processes. ICT capacity-building will support government

efforts towards achieving a Knowledge-Based Economy (KBE).

ICT progress and development achieved thus far in Brunei Darussalam is described

as follows:-

MAIN INFO-COMMUNICATION TECHNOLOGY PLAYERS

There are currently three telecommunication operators in the country namely

Telekom Brunei Berhad (Telbru), a public limited company wholly owned by the

Government of Brunei Darussalam as the fixed-line service provider, DST

Communications Private Limited, another quasi-government entity offering 3G

mobile phone services and b-Mobile Communications Private Limited, a private

company offering 2G mobile phone services. Below is the list of the current main

ICT players.

Telbru Berhad which provides basic telephony and a range of value-added services

such as leased-line services, ADSL broadband, VoIP and pre-paid calling cards.

DST Group Sdn Berhad, a private company based in Brunei Darussalam which

operates a 3G mobile network and provides some value-added services; VoIP and

internet access via 3G.

B-mobile Communications Sdn Berhad (a joint venture between Telbru Bhd and

QAF Comserve) which operates a 3G mobile network and provides VoIP and

internet access via 3G.

BAG Networks (a joint venture between the Government of Brunei and Accenture,

a global management consulting, technology services and outsourcing company) is

a company that provides IT solutions and services.

IFB was officially formed on August 5th 2007 as an initiative by BAG Networks

Sdn Berhad. IFB is a non-profit, national body dedicated to growing and nurturing

the Information Technology and Communications Industry in Brunei Darussalam.


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Special Article I

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The society is non-sectarian, non-communal and non-political and represented by a

selective number of members of the local ICT industry.

ITPSS Pte4 Ltd, an IT security company, has been appointed as the agencyresponsible for all network security matters with respect to the e-Government in

Brunei Darussalam. It has also been appointed as BruCERT the first national

Computer Emergency Response Team for the country. BrueCERT provides

incident response, prevention, mitigation plans and security training for its

members, national alerting services and advisories, and a central report and

coordination point for security incidents throughout the nation.

BROADBAND

Currently, Telbru and DST are offering broadband services of speeds from 512

kbps to 1Mbps. The 3G technology employed by mobile phone operators (DST andB-Mobile) also enables the public to access the internet of up to 7.2 Mbps.

With the consent of His Majesty the Sultan and Yang Di-Pertuan of Brunei

Darussalam, Brunei Darussalam has agreed to participate in building together the

Asia-America Gateway or AAG submarine cable network linking Brunei

Darussalam to its neighbours in Southeast Asia. The AAGs designed capacity of

up to 1.92 Terabit per second of data bandwidth is tailored to meet the forecasted

explosive growth in bandwidth requirements.

The increased capacity will cater for the new technologies in broadband

applications such as IP, video and other multimedia services. AAG will also

improve internet and e-commerce traffic.

This project represents a strategic investment that will strengthen the security and

safeguard the interest of Brunei Darussalam by ensuring a secure and continuous

communication with the outside world. In other words, it serves as an alternative or

a back-up to the existing submarine cable (South East Asia Middle East West

Europe, SEA-ME-WE3).

It is also in line with the Ministry of Communications mission to provide a safe,

efficient, accessible and secure communications so as to enhance nationalcompetitiveness and quality of life in the Knowledge-Based Economy.

The final completion of the AAG in mid-2009 will enable Brunei Darussalam to

meet the expected growth in the countrys international bandwidth with the

development of various broadband applications such as IP-based data, video and

other multimedia services.

E-GOVERNMENT AGENCY SERVICES (EGAS) PROJECTS

To realize the Ministrys vision: Towards a Sophisticated Society and Excellence

in Communications for Enhancing National Competitiveness and to create aconducive and dynamic environment for sophisticated society, one of the key

initiatives in the ICT area is development and delivery of e-services via e-Mincom

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portal.

Under IS/IT Strategic Plan for e-Government, the Ministry of Communications

has the following missions:

Leveraging on the areas of ICT such as e-Commerce and e-Government to

provide an easy and conducive environment for business to flourish.

Increasing productivity and efficiency in business through better governance.

Focusing on K-economy the direction for all business dealings with ICT

cutting across all sectors i.e. banking, logistics, transportation and governance.

Ministry of Communications

E-Mincom Service PortalAn integrated service portal for hosting business-to-consumer applications

offered by the Ministry and its departments namely Land Transport, Ports,

Marine, Postal Services and Civil Aviation departments.

This portal is also designed to cater for other Ministries or Departments who wish

to embark on their own e-services by riding on the e-Mincom service portal

platform.

The common services and process archetypes include Single Sign-On, Bill

Presentation and Secured Online Payment and integration to banks payment

gateway.

Land Transport Department

Sistem Pengangkutan Darat (SPD)

It assists the department to replace/upgrade/modify/enhance their existing

application and the current computer configuration.

It also introduces new technologies such as issuance of driving licenses, vehicle

registration books/cards and vehicle licenses with MRC/MRD technologies as

well as providing their counter services online.

The system also integrates with the Inspection Station at the Vehicle Inspection

Centre (VIC) for uploads of vehicle data and downloads vehicle inspection

results.

Computerized Highway Code Examination System

It will provide written examinations/tests using computers where the questions

will be randomly selected from the database. Other features will be online

booking of test/examination dates, pre-registered dates of candidates as well as

automated examination results.


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Online Registration Number Tendering

It will provide online tendering of vehicle registration numbers in order to reduce

time spent awarding tenders due to redundancies.

Ports Department

E-Ports (Ports Information System)

The scope of this project is to provide an alternative access point for customers

and port users to conduct activities with the Ports Department via an online

website providing their services online. The objective of the project is to increase

tonnage throughput; to minimize customer turn-around time; to enhance service

quality and security; and to increase revenue.

It will carry out the applications and works for the ports system namely

Conventional Terminal Management System (CTMS) and ContainerManagement System (CMS) as well as building the interface between both

systems to exchange relevant data and integration to the e-Mincom portal.

Marine Department

E-Marine Marine Management System

The purpose of this project is for the supply of an integrated management system

with workflow and online capabilities together with associated implementation

services that will effectively enable the Marine Department to improve its work

practices in relation to its needs, and deliver genuine benefits and savings to the

Marine Department.

The objectives of the project is to improve the maintenance and monitoring of

the Marine Departments activities; to enhance the quality of services delivered;

and to enforce and enhance National oil spillage contingency plan for the

protection of the Maritime Environment. It will cover the maintenance

management of the Marine Assets to provide a better and efficient service to the

customers by providing their services online.

E-Marine Marine Information System

The scope of this project is to provide an online website to allow an alternative

access point for customers to conduct activities with the Department of Marine.

The objectives of this project implementation is to enhance maritime safety

through continuous and effective communication of news, events and

information on marine activities as well as maintaining safety standards as well

as to improve notification of maritime training plans.

Postal Services Department

Counter Automation System

A Post Office Computerized Counter System that supports all the operations of

25 Brunei Postal Services Post Offices which include sale of stock items, postalservices, agency services, telecommunications services, stock and cash

management.

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The system provides adequate resilience and security against tampering of data

as well as generates all necessary reports to reflect the activities of every user of

the system and reports for purposes of managing the cash and stock of every

user and the Post Office as a whole.

Information from the counter system shall be channeled where appropriate to

the Host System such as connectivity to other systems such as Telecom Brunei

(Telbru) mainframes and Data Stream Technology Sdn Berhad (DST) System

and other host agencies.

Web post (W-Post)

This project is a combination of IPS Tracing and Tracking of Mail Items and e-

Post projects, based from the endorsed IS/IT Plan. The scope of this project is

to provide an online website to increase customer satisfaction through providing

another access point online from the available 24-hour online service provided

for customer convenience.

It will feature a sophisticated new file tracking system utilizing a computerized

database and a network of bar code reading and printing equipment, inclusive of

Mail Item Tracking information, Operational Documentation as well as

Dispatch and Consignment Tracking Information.

Civil Aviation Department

E-Airport

The scope of this project is to provide an online website that provides users with

airport information as well as permits and applications relevant to the Civil

Aviations responsibilities via a new Airport Infrastructure System which can

cater for high-availability of connections with a modular architecture providing

much wider area connectivity and standard facilities to process and distribute

data efficiently.

Therefore, the Airport Management System can control the work order processes

for routine maintenance with fast response maintenance and periodic preventive

maintenance. The process can also provide a full range of diagnostic tests and

can expedite work order entry effectively.

Meteorological Web Service

This project will be a supplement to the e-Airport overall project by providing

meteorological-related services and products especially for aviation communities

and other airport users, general citizens and people of Brunei Darussalam,

regional and international customers.

E-Government Bandwidth Services (EGBS)

E-Government Bandwidth Services refers to the outsourcing broadband network

connectivity up to the routers/switches for all ministries and departments

(including its branches and related sites) under the Government of Brunei

Darussalam.

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The Ministry of Communications has been appointed the lead agency for the

EGBS implementation which is fully provided, developed and set up by Telbru

Sendirian Berhad.

E-Government Bandwidth Services (EGBS) provides interconnectivity between

departments and ministries throughout the Brunei Government as well as a single

point of connection to the World Wide Web via e-Government Centre Services

(EGC).

All ministries and departments of the Brunei Government require a total of 929

sites of EGBW connectivity which has been implemented by fiber optic (77%),

copper cable (21%) as well as wireless access (2%). Overall, 90% of these

required sites are now considered operational and ready for connection.

Key milestones in telecommunication regulation2001: The Government of Brunei Darussalam commenced a restructuring of the

ICT industry; three new pieces of legislation were enacted.

The Telecommunication Successor Company Order 2001 transfers all

property, rights and liabilities belonging to JTB to Telekom Brunei Limited

(Telbru) whereby Telbru assumes the role of service provider in place of

JTB. (JTB underwent the process of corporatization)

The AiTi Order 2001 establishes the Authority for Info-Communications

Technology Industry of Brunei Darussalam (AiTi) as an independentstatutory body to regulate, license and develop the local ICT industry and

manage the national radio frequency spectrum.

The Telecommunications Order 2001 confers upon AiTi the exclusive

privilege to operate and provide telecommunication systems and services in

Brunei Darussalam and allows AiTi to grant licenses for the same.

2003: AiTi established as an independent statutory body.

2005: B-Mobile created as a joint venture between Telbru and QAF Comserve.

Granted a license to operate a W-CDMA network and begins operations as

the competitor to incumbent mobile operator DST (and incumbent fixed-

line operator Telbru).

2006: The Telecommunication Order entered into force, giving AiTi full power to

grant licenses; Telecoms Act 1952 repealed. Government

telecommunications department (JTB) corporatized as Telbru, a public

limited company registered under the Brunei Darussalam Companies Act

and 100% owned by the Brunei Government.

2008: Transfer of Authority under the Broadcasting Act (Chapter 180) from the

Prime Ministers Office to the Ministry of Communications.

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ICT SME INNOVATION CENTRE

One of BEDBs current efforts aimed at building an ICT-related industry is the

establishment of the iCentre TM which began operations in August 2007. The

iCentre is an incubation centre with a capacity to host 16 incubates at a time.The management company overseeing the development of the centre also

provides an incubation program which incubates mentorship, training and legal

consultation.

The establishment undertakes the following tasks:

1. Identify and support high potential ICT start-ups

2. Nurture innovative technology ideas into commercial success

3. Facilitate growth in employment, revenue and exports of the ICT start-ups

4. Assist ICT start-ups to secure finance and other support from third parties

(including venture capitalists and private investors).

E-MEDIA UNIT OF THE MINISTRY OF COMMUNICATIONS

Key changes in policy and regulation in broadcasting that has taken place:

On 21st May 2008, the Brunei Government commenced a restructuring of the

broadcasting industry. To this effect, the official transfer of the Broadcasting Act

(Chapter 180) from the Prime Ministers Office to the Ministry of

Communications.

The transfer of the Act will mean that all regulatory functions with respect to

broadcasting such as issuance of the broadcasting licenses, collection of

revenues as well as monitoring and enforcement will now be carried out by the

Ministry of Communications. With the enforcement of this transfer, the public

will only need to deal with one organization.

Government media agencies like Radio Television Brunei (RTB) and the

Information Department are not affected by the transfer and will remain under

the administration of the Prime Ministers Office.

The main aim of the transfer is to monitor the broadcasting and communication

rules as a whole under one supervising ministry (convergence at the Ministrylevel) with better fundamentals and results as well as to improve and expand the

broadcasting industry, including multimedia to be the pride of the nation.

With the goal of allowing the community to utilize Information Technology

including multimedia, to gain competitive advantage through the coordination of

technology and usage model processes not only in the government sector but in

businesses, the private sector, non-government organizations as well as by the

public.

The Ministry of Communications Brunei Darussalam is also in the process of

conducting a review on the current regulatory framework to ensure that it is

always relevant with the evolution of technology and convergence as well as to

improve and expand the broadcasting industry including multimedia.


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FUTURE PROSPECTS

Fiber optics has been rolled out to ministries and business premises to

provide high speed broadband connection. Brunei Darussalam is also looking

into the prospects of deploying fiber optics in delivering high speed

broadband services to households.

There have been plans for a nationwide wireless blanket rollout. The Ministry

of Communications has formulated policy directives on the licensing of

wireless broadband access operators.

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TELECOMMUNICATIONS MAIN POLICY PAPER

One of the Ministry of Communications main tasks is to set out policy direc-

tions on ICT whilst AiTi is the implementing body.

Among the key policy points are:-

i. National Broadband Blueprint

The paper encompasses policy directions to address the crucial need to en-

hance the national ICT infrastructure issues namely on the accessibility and

affordability of the broadband service. It has been endorsed by His Majesty

the Sultan and Yang Di-Pertuan of Negara Brunei Darussalam. Among oth-

ers, the policy directions spelt out are the deployment of a mixture of technol-

ogy to provide broadband service, the engagement of public-private partner-

ship in this deployment and the investment in the AAG to complement inter-

national connectivity.

ii. Wireless Broadband Access

The paper consists of policy directions in spearheading the countrys progress

towards wireless broadband which are:-

To facilitate the provision of wireless broadband access, the Ministry of

Communications shall open up available bandwidth for WBA.

In order to create competition at least two operators shall be awarded the

WBA license.

AiTi the regulator and developer of ICT in Brunei Darussalam has opened uptenders for operating broadband wireless access in Brunei Darussalam and the

rollout of WBA technologies is planned as early as 2009.

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Page 38

Internet penetrationInternet penetration 51.16%51.16%

Broadband penetrationBroadband penetration 3.18%3.18%

Mobile phone subscribersMobile phone subscribers 397,013397,013

Proportion of households with a fixed line telephoneProportion of households with a fixed line telephone 100%100%

ICT LEGISLATION

Below are gazette documents ruling ICT in Brunei Darussalam.

Intellectual Property Laws: The Emergency (Copyright) Order 1999

Trade Marks Act (Cap 98)

Inventions Act (Cap 72)

The Emergency (Layout Designs) Order 1999 and

The Emergency (Industrial Designs) Order 1999

Telecommunications and Regulatory Legislation (See also earlier paragraph)

Telecommunication Order

Telecommunications Successor Company Order

AiTi Order

Broadcasting Legislation

Broadcasting Act

Others:

Electronic Transaction Act

Table 1: BRUNEI DARUSSALAM ACHIEVEMENTS (AS OF DECEMBER 2007)BRUNEI DARUSSALAM ACH

BEB Q3 2008

Documents

Transcript of BEB Q3 2008