?What do you know about the Sultanate of Brunei and why is it considered one of the strongest economies in the world
What do you know about the Sultanate of Brunei and why is it considered one of the strongest economies in the world?
The Sultanate of Brunei, also known as the Sultanate of Brunei Darussalam or the Land of Peace, is an Asian country located on the northern coast of the island of Borneo. The Sultanate of Brunei is known for being one of the strongest economic systems in the world, and its official currency is the Brunei dollar. It comes in sixth place on the list of the richest countries in the world.
The question is why is the economy of the Sultanate of Brunei considered one of the strongest economic systems? What are the components and foundations on which it is based? And how were its ruling systems able to achieve this amazing economic prosperity?
Brunei's steel economy:
To say that the economy of the Sultanate of Brunei is a steel economy is neither exaggeration nor bias. According to studies, it is not expected that this country will face any economic crisis in the near future, and by “near” here we mean the coming decades. So what is the secret of the strength of this economic system? What are its foundations and how is it being developed?
The sixth largest economy in the world:
Several statistical studies have been conducted on the richest countries in the world, and the results were close. The annual national income of each country differed relatively between one study and another, but the ranking of countries and their positions did not differ. The first and last places were for Arab countries, as the State of Qatar occupied the first place, while the tenth place on the same list was for the State of Kuwait. As for the Sultanate of Brunei, which is the subject of our topic today, it came in sixth place in terms of wealth, thus surpassing the United States, the United Arab Emirates, Switzerland and Kuwait, respectively. According to those reports that were officially published in more than one media outlet, the Sultanate of Brunei occupied this position, after it became clear that its annual GDP reached 7.52 billion US dollars annually, thus surpassing the income of the country that primarily issues dollar bills, i.e. the United States of America.
Reliance on oil and gas:
The Sultanate of Brunei is not much different from the rest of the ten richest countries in the world. Its strong economy also depends on the oil trade, and the revenues from crude oil and natural gas exports constitute the main source of national income for the Sultanate of Brunei Darussalam. So, what is the rate of production of oil and natural gas in the Sultanate of Brunei? And what is the financial return that it achieves from trading them abroad?
a) Production volume:
The Sultanate of Brunei's production rates of crude oil and natural gas are among the largest in the world, and we would not be exaggerating if we said that they may be the largest ever. The latest documented statistics on the size of the Sultanate's production of these two, which were conducted between January and June of 1997, showed the following results:
Natural gas production rate: 31.76 million cubic feet per day.
Oil production rate: 162.05 thousand barrels per day.
b) Export volume:
The same study monitoring the production of the Sultanate of Brunei during the year 1997 AD, dealt with the volume of its exports and foreign trade of both products, and of course the volume of trade was similar to the volume of production in its enormity. To get to know it more clearly and in more detail, let us look at the following statistical data:
Natural gas export rate: The largest trade relationship of the Sultanate of Brunei with regard to natural gas is the trade relationship that links it to Japan. During the year 1997 alone, the volume of its exports to it exceeded 140 trillion barrels, equivalent to about 82% of the Sultanate’s total natural gas exports.
Crude oil exports: Unlike foreign natural gas trade, Brunei's trade relations related to oil exports are diverse, and its export movement is almost daily. Of its total crude oil production in 1997, the largest portion, estimated at about 40%, went to the Association of Southeast Asian Nations, known as ASEAN. Brunei transported about 59,790 barrels to it daily, while Japan was in second place with 25% of total exports. The remaining percentage of Brunei's oil exports was distributed between Korea, Taiwan and New Zealand, respectively.
Multiple sources of income and growth rates:
The Sultanate of Brunei's steel economy is an accurate expression. It did not acquire this characteristic out of nowhere, or based on a fortune that was brought out for them by chance from the depths of the earth. On the contrary, if it were not for the economic minds that manage this wealth, it would have been lost in vain and the Sultanate of Brunei would have become like any other country. The feasibility study work in this country does not stop, because it always seeks to establish and launch more economic projects. Today, although the Sultanate of Brunei relies on oil as a main source of national income, it no longer relies on it alone. The Sultanate of Brunei always seeks to diversify its sources of income. According to economic studies conducted in the early nineties, the growth rate achieved by the Sultanate of Brunei was estimated at about 5%, which is a very large percentage in the world of money and business. In light of the industrial and commercial boom created by the Sultanate's administration, oil revenues no longer constitute more than 45% of the total income.
Future economic hopes:
Money is the basis of everything for countries. Development in all its forms and types depends on providing the material. Therefore, the Sultanate of Brunei's quest to advance its economy does not stop, despite the great successes and tremendous leaps it has achieved. It is noticeable that the future plans of the Sultanate of Brunei are always ambitious, and it works to develop economic development mechanisms through short-term plans, usually five-year plans. An example of this is the plan that the administration of the Sultanate of Brunei developed during the period between 1990 and 1995 AD, through which it hoped to establish two thousand industrial projects, through which more than 40 thousand job opportunities could be provided, in addition to allocating a large percentage of the total public income to spend on urban projects.
Labor in the Sultanate of Brunei:
The Sultanate of Brunei's ambitious economic plans were hampered by the fact that it did not have enough workers, and that the people of the Sultanate of Brunei itself constituted a very limited workforce. However, the Sultanate overcame this obstacle by opening its doors to foreign workers. It initially began by bringing in groups of trained skilled workers. When this did not suffice and their numbers were less than required, the Sultanate of Brunei established training programs for workers, and brought in workers, whether they were experienced or not. A group of experts supervised the process of training and qualifying them. Today, the Sultanate of Brunei has a large number of trained individuals, capable of accomplishing various tasks in all fields, which makes it likely that it will be able to achieve all its ambitions, as stated in the development plans sponsored by the ruling family there. From all of this, we can conclude that the unemployment rate in the Sultanate of Brunei is 0%.
Debt ratio:
Debts for the state are divided into two main sections: external debts, meaning that countries resort to borrowing from other countries. The largest percentage of countries indebted to this type are the countries of the African continent and developing countries in general. As for the developed countries, they are the creditors of the developing countries, while they often resort to the other type of borrowing, i.e. internal debts, meaning that the state borrows from itself to cover the budget deficit and maintain the strength of its economy. In general, there is almost no country on the surface of the planet that is not indebted. Borrowing in the world of economics is a natural thing, but only two countries were excluded from this rule, one of which was the Asian Sultanate of Brunei, according to official reports monitoring the rates of borrowing of countries. In 2011, the debt rate of the Sultanate of Brunei was 0% or “nothing.” If we are looking for evidence of the strength of the economy of this sultanate and the extent of its prosperity, there is no clearer or stronger evidence than that.
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