OBG talks to Dato Ali Apong, Deputy Minister, Prime Minister’s Office, and Chairman, Brunei Economic Development Board (BEDB)

Dato Ali Apong, Deputy Minister, Prime Minister’s Office, and Chairman, Brunei Economic Development Board (BEDB)

Interview: Dato Ali Apong

What strategies are being implemented to increase the access of small and medium-sized enterprises (SMEs) to international markets?

DATO ALI APONG: As Brunei Darussalam’s domestic market is small, it is vital for local SMEs to expand beyond the Sultanate. To help, the BEDB has introduced the Promising Local Enterprise Development Scheme (PLEDS), aimed at building SME competency and providing networking opportunities, mentoring and financial assistance to enhance their ability to venture abroad. Since its launch in 2011, PLEDS has assisted the transformation of several local companies in sectors ranging from processed food and beverages to educational services and hydrocarbons. To further strengthen promising local enterprises, the BEDB has also established the PLEDS Investment Fund, a venture capital fund intended to finance companies that have export potential and are highly scalable. The BEDB is also working on initiatives to provide local enterprises with country- and market-specific insights along with a special “go-to-market” strategy. In terms of market access, the BEDB is already leveraging on industrial visits and international exhibitions arranged through the Ministry of Foreign Affairs and Trade and the Ministry of Industry and Primary Resources, in addition to collaboration with various ASEAN trade and investment promotion centres. However, greater access to market information, including tariff and non-tariff barriers to entry, as well as government-endorsed lists of potential SME partners would further enhance the opportunity for local enterprises to expand beyond the Sultanate’s shores.

What further role can the private sector play in supporting Wawasan Brunei 2035?

DATO ALI: One of the key objectives of Wawasan Brunei 2035 is to create a dynamic and sustainable economy. The private sector will play an important role in achieving this by, for example, providing employment and training opportunities for locals, changing business mindsets to help ensure good governance, upgrading systems to become more innovative and investing in research and development (R&D) to ensure long-term competitiveness. While it is important to improve the business landscape, support from sectors such as banks and foreign companies based in Brunei Darussalam would also help SMEs navigate the complexities of cross-border trade and expansion into new markets through knowledge transfer, credit and services.

How can locals be encouraged to enter the workforce in sectors that have high demand?

DATO ALI: For a country with small population, sourcing adequate human resources remains a major challenge. In its quest to provide the necessary labour pool, Brunei Darussalam has been investing heavily in human resource development by equipping the local workforce with the relevant skills and expertise to serve both public and private sectors. Various schemes have been introduced not only to incentivise locals to join the private sector, but also to assist them in developing their skills. This includes schemes such as the Human Capacity Building in the Private Sector scholarship, a fund to allow private sector employees to upgrade their academic and professional qualifications; the Technical and Vocational Education Scholarship Scheme for students to pursue their studies in local private technical and vocational institutions as well as Training and Employment Scheme that equips locals with relevant skills and prepares them for employment. It also gives them monetary incentive to complete at least a twoyear employment contract with their employers.

In addition, the significance of the new national education system, SPN21, developed by the Ministry of Education (MoE), has been able to equip locals with the necessary skills and expertise to navigate the challenges of the new millennium by providing scholarships to citizens in all areas of skills and expertise both locally and overseas. The 10th National Development Plan (RKN10) has allocated BN$250m ($195m) for the Human Resources Development (HRD) Fund, complementing the MoE’s scholarship fund, with the aim to help expedite the generation of well educated and skilled people in line with Wawasan Brunei 2035.

How can R&D be commercialised in the Sultanate?

DATO ALI: Under the RKN10, Brunei has allocated 1% of its GDP (BN$200m, or $156m) towards R&D activities in Brunei Darussalam. Through a series of stakeholder consultations conducted by the BEDB and the Department of Economic Planning and Development, five potential research clusters have been identified to ensure long-term economic competitiveness. They are energy, sustainable environment, health care/health sciences, food security and information technology. In an effort to encourage companies to undertake R&D activities in Brunei Darussalam, a cost-sharing fund known as Brunei Research Incentive Scheme (BRISc), was recently introduced to provide incentives to finance research projects undertaken by both local and foreign companies. It is hoped that BRISc will also help attract foreign multinational corporations to begin R&D here. This is being pursued under the longer-term objective of encouraging additional investments in manufacturing or services in the Sultanate. Besides R&D funding, the implementation of the Patents Order and the establishment of the Patent Registry Office in 2012, have together provided an enabling environment conducive for commercialisation, thus allowing innovators to protect and push their innovation in generating new growth areas in our economy.

Increasing productivity is one of the themes of the new five-year plan. Where specifically can Brunei Darussalam improve upon this?

DATO ALI: RKN10 gives priority to exploring approaches of increasing productivity through knowledge and innovation. The HRD Fund will continue to provide employee development programmes and schemes that will strengthen the local human capacity not only in the public sector but in many parts of the private sector.

What more can be done to make the Sultanate’s bankruptcy law more attractive to entrepreneurs?

DATO ALI: The BEDB recognises that a robust bankruptcy regime is an integral component of the ecosystem for developing entrepreneurship. In cooperation with the attorney general’s office and the judiciary, the BEDB is exploring bankruptcy reforms on the pre-existing bankruptcy framework to provide entrepreneurs with a sense of understanding, certainty and direction in the event where entrepreneurs may find themselves in adverse financial situations. The key objectives behind the proposed reforms are to provide entrepreneurs and the public with the awareness that tools exist within the law to either assist in financial recovery or proceed with bankruptcy, allowing genuine entrepreneurs a “fresh start” upon discharge of bankruptcy. This will help create a positive risk-taking environment.

Besides the effort to strengthen the private sector, what steps have been taken to enhance foreign direct investment (FDI) inflows?

DATO ALI: Given the significance of FDI in creating vibrancy in the local economy, the government has remained focused on implementing relevant policies and programmes to achieve a sustainable competitive advantage for attracting more FDI. To date, the introduction of various well-designed incentive schemes has been able to help boost investment activities, mainly in the export-oriented manufacturing and services sector. Over the last few years, its effective policies and programmes have helped Brunei Darussalam to secure a number of FDI projects. These currently include the establishment of a $600m methanol plant by the Brunei Methanol Company ( jointly based out of Japan and Brunei Darussalam), a $19m halal pharmaceuticals manufacturing plant by Viva Pharmaceuticals ( Canada), a $102m multi-purpose training centre by CAE (Canada) and Strategic Development Capital (Brunei Darussalam) and a $4bn integrated refinery and an aromatics cracker plant by HengYi Industries (China).

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The Report: Brunei Darussalam 2013

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