Oil-rich Brunei declares sweeping economic reforms<\/p>\n
BANDAR SERI BEGAWAN (AFP): Mindful that its vast oil resources
\nwould run out in 25 years, Brunei on Sunday announced sweeping
\neconomic reforms including plans to impose income taxes, slash
\nsubsidies and set up a regional financial hub.<\/p>\n
Officials said the Asian financial crisis in 1997 had jolted
\nthe tiny Southeast Asian sultanate into realizing it has to shed
\nits almost total dependence on oil and gas revenues.<\/p>\n
\"We are now opening up to the world. We know we lag behind our
\nneighboring countries,\" said Wahab Juned, director-general of the
\nBrunei Economic Council, a private-sector dominated advisory
\nbody.<\/p>\n
He said at a news briefing here the financial crisis was a
\n\"blessing in disguise\" because \"it taught us in many ways in
\nterms of preparing for sustainable growth in the future.\"<\/p>\n
Wahab said estimates show Brunei's oil and gas reserves, which
\nhave brought prosperity to the nation of more than 300,000
\npeople, would last another 25 years.<\/p>\n
Now the sultanate is in a race against time to restructure the
\neconomy before its most precious resources run out.<\/p>\n
Wahab said the government was in the process of introducing
\ntax reforms to widen the revenue base as well as remove some
\nsubsidies.<\/p>\n
Brunei citizens currently do not pay income taxes, there is no
\ninterest on housing loans and health care is free.<\/p>\n
Wahab said an announcements will soon be made for privatizing
\na key government-owned company which he declined to identify.<\/p>\n
On his 54th birthday Saturday, Brunei's ruler Sultan Hassanal
\nBolkiah said his kingdom has established a financial center aimed
\nat making the state a regional hub.<\/p>\n
The Brunei International Financial Center \"is designed to make
\nour nation state as the financial center for monetary sector,
\nbanks, security and insurance,\" he said.<\/p>\n
Deputy Finance Minister Selamat Munap said the financial
\ncenter would borrow features from international financial centers
\nin Singapore and Bahrain.<\/p>\n
Five legislations relating to international banking and trusts
\nwere already in place, and regulations on insurance licensing,
\nsecurities and mutual funds would be ready by year-end.<\/p>\n
\"It's about time for us to be more pragmatic about
\nrequirements,\" Wahab said Sunday. \"We need to do things which are
\nnormal for every country to do in terms of managing assets
\nbetter. We don't want to be caught by surprises,\" he said.<\/p>\n
Brunei's gross domestic product is forecast to grow 3.0
\npercent this year, virtually unchanged from 1999. The annual
\npopulation growth rate is faster at 3.1 percent.<\/p>\n
Total GDP value last year was 8.2 billion Brunei dollars
\n(US$4.7 billion).<\/p>\n
The economy is forecast to grow between 4.4-4.5 percent in
\n2001. Wahab declined to give figures on the government's foreign
\nreserves but stressed that Brunei's financial position \"is still
\nstrong.\"<\/p>\n
The country was rocked by scandal in 1998 following a battle
\nroyale between Sultan Bolkiah and his flamboyant brother Prince
\nJefri Bolkiah, who was accused of squandering billions of U.S.
\ndollars from a firm managing Brunei's petrodollar investments.<\/p>\n
Brunei hopes to bolster its international image when it hosts
\nthe Asia Pacific Economic Cooperation (APEC) summit in November.<\/p>\n
The summit gathers the leaders of 21 Pacific rim economies,
\nincluding US President Bill Clinton, Chinese leader Jiang Zemin
\nand the prime ministers of Japan and Australia.<\/p>",
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