Interview: HRH Prince Al-Muhtadee Billah
To what do you attribute the recent strengthening of ties with the Gulf Cooperation Council (GCC)?
PRINCE AL-MUHTADEE BILLAH: Brunei Darussalam has always maintained warm relations with the members of the GCC, with linkages across several dimensions including politics, culture and religion. On the economic side, we share many similar attributes – we are strong in the energy sector and yet we strive to diversify our economies. Thus, this gives us the opportunity to learn from each other and also to explore ways of contributing to each other’s economic development.
Our ties have continued to grow both politically and economically, with a number of visits at various levels. In 2014 alone, my official visits to the Sultanate of Oman and the State of Kuwait have paved the way for further cooperation in areas such as energy, education and culture, including potential joint investment opportunities in the region. At the same time, we also see ASEAN ties with the GCC member states as another important avenue of cooperation for Brunei Darussalam. We remain committed to fostering a close relationship under this platform, as the synergies between bilateral and regional cooperation will potentially contribute to overall development efforts. We look forward to further expanding our friendly bilateral relationship with the GCC member states.
In terms of the gas trade, how significant is the Sultanate’s partnership with Japan?
PRINCE AL-MUHTADEE BILLAH: 2014 marks the 30th anniversary of the establishment of diplomatic relations between Brunei Darussalam and Japan. Bilateral relations between the two countries continue to be strengthened with the signing of the Brunei-Japan Economic Partnership Agreement, which came into force in July 2008. This agreement not only places emphasis on trade facilitation and energy cooperation, but also recognises the importance of economic, educational and technical development. Brunei Darussalam and Japan are also party to the ASEAN-Japan Comprehensive Economic Partnership Agreement and are part of the negotiations for both the Regional Comprehensive Economic Partnership Agreement and the Trans-Pacific Partnership Agreement.
Our robust economic relationship has existed for more than 40 years thanks to trade in crude oil and liquefied natural gas (LNG). The foundation to the success of our LNG project, Brunei LNG (BLNG), is deeply rooted in the spirit of mutual trust and cooperation between the governments of Brunei Darussalam and Japan, the three participating Japanese companies (Tokyo Electric Power Company, Tokyo Gas and Osaka Gas) and our other international joint venture partners (Shell and Mitsubishi). In 2013 BLNG and its Japanese buyers entered into a further 10-year supply agreement, making this relationship Japan’s longest with any supplier. We believe that all these factors highlight the history of mutual cooperation between Brunei Darussalam and Japan, which provides a strong basis to allow our partnership to continue to strengthen and thrive.
What strategy is Brunei Darussalam pursuing for the creation of a training hub in the country?
PRINCE AL-MUHTADEE BILLAH: Providing the right training and education is a must and is crucial for achieving the goals of Wawasan Brunei 2035, which aims to see Brunei Darussalam widely recognised for the accomplishments of its well-educated and highly skilled people, the quality of life and its dynamic, sustainable economy. To achieve this objective, we aim for Brunei Darussalam to not only become a training hub, but to become one that offers widely recognised, high-standard training and educational institutions.
As part of the Energy Industry Competency Framework and the Brunei Maritime Academy, we have recently implemented several training programmes that seek to train locals for employment in the country’s marine and oil and gas industries. Whilst these training programmes are currently limited in number and open only to locals, I could see them eventually being offered to regional participants. Some of these courses could be held jointly with our neighbours – thereby allowing us to tap into a wider pool of educators and experts.
Indeed, our higher educational institutions, such as the University of Brunei Darussalam and the Institute Technology of Brunei, have been able to attract a good number of foreign students to study at the doctorate, master’s and bachelor’s levels in programmes that include oil- and gas-related subjects such as geology, energy studies, energy systems engineering, electrical and electronic engineering, petroleum and chemical engineering, and environmental studies.
What opportunities for downstream methanol processing are currently under evaluation?
PRINCE AL-MUHTADEE BILLAH: Aside from BLNG, the Brunei Methanol project is an important downstream activity for the country. It is therefore natural for the government to explore the various spin-off opportunities to help further diversify this downstream industry. These spin-off activities are important, as they would provide commercial opportunities for local businesses and create more jobs for locals.
For example, the Energy Department at the Prime Minister’s Office – in collaboration with the Brunei Economic Development Board and PB Petrochemical, a subsidiary of PetroleumBRUNEI – has completed studies on developing further methanol derivatives.
Could Brunei Darussalam become a major centre for Islamic financial services in South-east Asia?
PRINCE AL-MUHTADEE BILLAH: Brunei Darussalam’s strategic location, coupled with its strong Islamic rooting and culture, provide an excellent setting for the growth of the Islamic finance industry. It has been more than 20 years since Islamic finance was introduced in Brunei Darussalam with the establishment of the first Islamic trust fund, Tabung Amanah Islam Brunei. This was followed by the formation of Bank Islam Brunei Darussalam as Brunei Darussalam’s largest bank and flagship Islamic financial institution. Ever since then, there has been rapid development in the Islamic finance industry in the Sultanate, now comprising more than 30% of the domestic market share. The “2014 Global Islamic Finance Report” has predicted that by 2020 Brunei Darussalam will be the first of, at minimum, six countries in the world where Islamic banking and finance will have gained a market share of at least 50% of the respective country’s total financial sector.
The Autoriti Monetari Brunei Darussalam (AMBD), established in 2011, is responsible for regulating all financial industries in the country, both Islamic and conventional, under the authority of the Ministry of Finance. AMBD places great importance on ensuring that the overall Islamic financial industries operate in accordance with sharia principles.
Brunei Darussalam has a comprehensive legal framework regulating the Islamic finance industries, complemented by well-developed sharia principles and strong governance. These are the key components in the development of a strong Islamic financial system, allowing it to gaining public confidence and receive international recognition.
At the same time, Brunei Darussalam has established a close working relationship with international Islamic standard-setting bodies and organisations such as the Islamic Financial Services Board and the International Islamic Financial Market. Brunei Darussalam is mindful of the continuous development of international standards and best practices, and has ensured that its regulatory standards are well at par.
Brunei Darussalam has established a two-tier sharia governance structure comprising: first, the Sharia Financial Supervisory Board (SFSB), which oversees sharia issues at the national level; and second, a number of sharia advisory boards (SABs), which are formed within the respective Islamic financial institutions. SABs will not only ensure that the Islamic products and services are developed in compliance with sharia principles, but also that the principles are endorsed by SFSB.
Read More from OBG
