Brunei Darussalam, a sovereign state on the island of Borneo in Southeast Asia, is a prosperous economy with great potential for private sector development, including through increased support for female entrepreneurs. More...
Brunei Darussalam, a sovereign state on the island of Borneo in Southeast Asia, is a prosperous economy with great potential for private sector development, including through increased support for female entrepreneurs. With a population estimated around 406,200 in 2013, Brunei Darussalam has a GDP per capita of BND55,733 ($40,979) –among the highest in Asia–largely due to its abundant natural resources and small population. The economy’s crude oil and natural gas sector amounts to over half of its GDP and 90% of exports, while employing less than 3% of the workforce. Against this backdrop, the government’s economic agenda emphasizes diversifying the economy beyond these industries while still managing its oil and gas resources.
Until recently, Brunei had put relatively little emphasis on private sector development. Today, the public sector is the main employer and the government has said that it “can no longer adequately absorb the growing numbers of young people wishing to enter the work force each year.” Entrepreneurship remains challenging as reflected in the small number of corporations and SMEs. The World Bank Group’s Doing Business Report for 2015 ranked Brunei Darussalam 101 out of 189 economies surveyed for legal and regulatory conditions pertaining to the business climate. Although ranked 179 in the category of “Starting a Business” in particular, the lowest among the APEC economies, intensive reforms are aggressively being implemented to make starting a business faster and cheaper. Such reforms include recent implementation of an online system for company incorporation, introduction of a BND$300 (US$295) flat rate for company incorporation, and immediate issuance of business licenses, which allows businesses to start operation within one day.
To foster growth in the private sector, the government introduced a Local Business Development Strategy outlined in Brunei Darussalam’s Wawasan (or “National Vision”) 2035. Launched in 2008, this vision includes goals related to a “dynamic, stable economy,” high quality of life, and “accomplishments of its well-educated and highly skilled people.” Recognizing that the local business community is “weak” and unable to create a large number of employment opportunities, the government’s strategy aims at “increasing opportunities for local SMEs and encouraging competitiveness and leadership in business.” It has developed initiatives to promote this work, including micro enterprise development, start-up and growth enterprise development, and internationalization and commercialization support.
Despite operating in a business environment that is challenging, women are active in Brunei Darussalam’s private sector. Women own more than half of the economy’s SMEs, which overall contribute 92% of private sector employment opportunities. According to the World Economic Forum’s 2014 Global Gender Gap report, which measures the relative gaps between men and women across health, education, the economy, and politics, Brunei Darussalam ranks 98 out of 142 economies studied. However, Brunei Darussalam’s “economic participation and opportunity” Global Gender Gap ranking, fares relatively well, at 36th overall. In fact, Brunei Darussalam ranks first in the survey on estimated earned income, indicating income equality between men and women.
More generally, Brunei Darussalam’s commitment to women’s rights is reflected in its commitments to CEDAW, the Beijing Declaration and Platform for Action, the ASEAN Declaration on the Advancement of Women in the ASEAN region, the Declaration on the Elimination of Violence Against Women in the ASEAN Region, and the UN’s Millennium Development Goals, particularly related to women’s rights. As of 2012, women comprised 51.5% of Brunei Darussalam’s civil service. Still, Brunei Darussalam’s Syariah Penal Code Order, enacted in 2013, has been criticized as heightening the vulnerability of women and infringing on their rights. The new law invokes severe penalties, including flogging and stoning, for women who become pregnant outside of marriage, commit adultery, or engage in other behavior delineated by the law as wrongful or indecent.
Brunei Darussalam is a multiethnic society in which Malays make up 66% of the population, Chinese 10%, and other groups 24%. While freedom of religion is guaranteed, Islam is the state religion. Brunei Darussalam is divided into four districts—Belait (population 62,500); Brunei Darussalam-Muara (population 290,500); Temburong (population 8,900); and Tutong (population 44,300). These, in turn, are subdivided into 38 provinces. It is a small economy— 2,226 square miles—and surrounded by the Malaysian state of Sarawak. More than half of the population lives in and around the capital of Bandar Seri Begawan, the economy’s economic hub. In most respects, Brunei Darussalam’s well-to-do economy results in benefits for the population. The government provides free healthcare and free education through university level to citizens and subsidizes rice and housing.
Business networks in Brunei Darussalam, while not plentiful, represent a range of sectors important to develop female entrepreneurs’ opportunities. This includes supporting access to IT e-learning for women and online markets, as well as programs targeting segments of the population, including youth and women. The economy’s outward looking, growth-oriented interest is evident in the regional networks and market connectivity emphasized through several of these initiatives. As with private sector initiatives, business networks are relatively few, as most effort in private sector development is fueled by government initiatives.
Networks that support women’s access to capital and assets:
Networks that support women’s access to markets:
Networks that support strengthened capacity and skills for women in business:
Networks that support women’s leadership, voice and agency:
Networks that support women and innovation and technology:
Brunei Darussalam’s long-term economic growth depends on private sector development, especially diversification beyond the hydrocarbon economy. Reliance on the oil and natural gas industry, which has dominated the economy for the past 80 years, and on the power of the public sector has limited the development of the private sector. Outside of the oil and gas industry, the private sector contributes around 20% to GDP. Given the government’s significant role in the economy and employment, it needs to be involved in rebalancing the economy to put more focus on the private sector. This need is fully evidenced by the government’s host of initiatives supporting entrepreneurship and SME development. Public-private partnerships can be important in this rebalancing act, with private partners bringing expertise and productivity and public partners bringing financing. In recent years, the private sector has seen improvements that make growth more feasible. These improvements include better business registration processes, an electronic customs system, a one-stop shop for preconstruction needs, and reduced tax rates on corporate income and profit.
Still there is vast room for improvement, particularly when it comes to starting a business and registering property. In a 2013 report on the economic outlook for Southeast Asia, China, and India, the OECD noted that in Brunei Darussalam it takes 15 procedures and 101 days to start a business. Meanwhile, property registration can take 298 days. OECD suggests that more business competition would boost productivity, with particular need to focus on telecommunications and banking. It also suggests that improved consumer protection policies should be integrated into wider competition policies.
Initiatives that support women’s access to capital and assets:
Initiatives that support women’s access to markets:
Initiatives that support strengthened capacity and skills for women in business:
Initiatives that support women’s leadership, voice and agency:
Initiatives that support women and innovation and technology:
Recognizing the need to diversify and build the private sector, the government of Brunei Darussalam supports the economy’s entrepreneurial space. The government is largely driven by Wawasan (National Vision) Brunei 2035, launched in 2008. In order to emphasize the common goals of continued economic growth, improvement in the numbers and capacity of SMEs, and entry into global markets, the government declared the 2010-2020 period to be the “Decade to Spur SME Development in Brunei Darussalam.” With the aim of creating opportunities for SMEs and supporting business development, the Wawasan Brunei 2035 includes a local business development strategy which calls for support for SMEs and simplifying the business environment, among other topics.
Brunei Darussalam has four chambers of commerce that focus on SME development: (1) the National Chamber of Commerce and Industry; (2) the Brunei Darussalam Malay Chamber of Commerce and Industry; (3) the Brunei Darussalam International Chamber of Commerce and Industry; and (4) the Chinese Chamber of Commerce.
The government has put emphasis on SME development as a strategy to foster economic growth and alleviate poverty. It has established entrepreneurship awareness and orientation programs for people 18 years old and older and people who are less than 18. The programs for those over 18 address the needs of both aspiring and current entrepreneurs. The programs for those under 18 aim to expose students to the world of business—its opportunities and challenges—and highlight the importance of business in society.
Specific government-support SME development projects include the (1) SMEs Halal Workshop to create and enhance awareness of Brunei Darussalam's Halal sector; (2) national studies such as readiness and needs analysis for local SMEs; and (3) Cluster Development Project is to enhance SME sector competitiveness in primary resources, services, and manufacturing. The government also focuses its entrepreneurial support efforts in building IT capacity. For example, the government hosted a Technology Expo in 2010 attended by high level officials. And, according to a 2013 government report, Brunei Darussalam’s ICT promoters believe the economy has a comparative advantage in creative multimedia such as animation. One constraint in developing Brunei Darussalam’s technology firms is the high cost of accessing ICT infrastructure.
As mentioned in its “Economic Strategy” of the Strategy and Policy Development Outline, the Government of Brunei Darussalam encourages equal opportunities for women in the workforce and in nation building. The Plan of Action Women on Family Institution and Women works to address pertinent issues, particularly to increase efforts for single mothers, women with disabilities, and underprivileged women to attain economic reliance through employment, entrepreneurship, and capacity building. The Plan also stipulates that national legislation and regulations be reviewed to incorporate a gender perspective and women’s rights in the workplace as well as to mobilize technical and financial support for women in need. Additional empowerment programs and their supporting mechanisms are undertaken for the advancement and development of women in the economy. These programs are implemented in close cooperation between government agencies, NGOs, the corporate sector and all stakeholders within the community.
The government’s support for female entrepreneurs is largely through strategies for gender mainstreaming. Her Excellency Datin Paduka Hajah Adina Othman, Deputy Minister of Culture, Youth and Sports, spoke on “Women and SMEs in Brunei Darussalam” at the 1st Joint Ministerial Meeting on Small and Medium Enterprises and Women in 2013. She noted that “in Brunei Darussalam, women have equal opportunities as men in economic participation” and their labor force participation has increased in a number of sectors including consultancy, architecture, legal practice, construction, agriculture, and more. She noted that the government encourages the active participation of women in SMEs through “equal access to the provision of incentives and entrepreneurial support which include financial assistance schemes, access to info-communication technology, business counseling as well as training in the form of workshops, seminars and consultations.” Giving a somewhat different message, in a November 2014 workshop on “Women in Entrepreneurship,” Brunei Darussalam’s Attorney-General, YB Datin Seri Paduka Hjh Hayati POKSDSP Hj Mohd Salleh, noted that women in Brunei Darussalam continue to face challenges and more efforts are needed to support female entrepreneurs.
The government’s approach to mainstreaming gender into its initiatives and services is evident in that, while there are many programs supporting entrepreneurs and the private sector more generally, there are few that directly target female entrepreneurs.