---------------------------------- 1990s -----------------------------------
With little industrial development, the Bruneian economy began to slow down in 1990s. Increasing emphasis on MIB as a state ideology has also resulted in the banning of alcohol, nightclubs, public celebration of Christmas, and commercial pig farming in 1991. The period also marked a critical time for Brunei; Singapore per capita GDP had grown dangerously near Brunei, while other ASEAN states like Malaysia, Indonesia and Thailand were waking up from their economic slumber.
Brunei 1990s: modern high-rise over capital
Realizing the mistake of not taking part in industrialization earlier on, and being aware that the country might fall behind if industrialization still doesn't take place, the 1991-1995 Brunei's NDP called for industrial promotion and expansion. A number of industrial estates were identified, this include those in capital Bandar Seri Begawan and the Beribi industrial estates, with factories focusing on furniture, pottery, tiles, cement, chemicals, plywood, glass, textiles, food and electrical.
Brunei's push for industrialization came 40 years late. It was something Singapore had done in the 1950s. By that time the wages in Brunei were already considered too high, the industrial base too limited, and technological edge too low to compete with larger neighboring state in terms of scale and cost (ironically, this was the exact concerns in Singapore during the 1960s which led it to shift into high-tech industrial platform)
Moreover, bureaucratic difficulties, poor coordination between government departments, and lengthy approval process deterred foreign investments, which mean the country couldn't count on foreign multinationals unlike Singapore to develop its underdeveloped industrial sector. The country must proceed on its own instead.
Brunei then began a period of 'state-led construction growth' (similar to Singapore's 1960s 'stated-led industrial growth'), initiated a plethora of construction phases and plans across the entire country, leading to the 1990s construction boom to diversify from an oil-reliant economy to one that is service- and tourism-oriented (it was also what Dubai did since 2000) The restriction on foreign workers were temporarily relaxed to allow large-scale projects and landmarks to be constructed, among them were a theme park, a magnificent hotel, and a giant power station.
Singapore 1990s: rich, robust and modern
All these however, was abruptly disrupted in the Asian financial crisis 1997-98. It is not clear if Brunei could have achieved a similar kind of development like in Dubai shall the construction plannings were to be continued. Soon after the construction spree took off, Dubai enacted a law in 2002 that allows non-nationals of the UAE to own property, leading to an inflow of foreign professionals and real estate boom. This was not seen in Brunei, who remains staunchly opposed to foreign ownership.
The Asian crisis shattered Brunei's economy, wiped out half its foreign reserves it never recovered from, and put it to sleep. After that, the country seemingly lost its ambition and economic direction, which would later saw it descended into the slowest-growing economy in the region by next decade.
Singapore had became an exciting place in the 1990s, it had advanced into NICs (Newly Industrialized Country), and was regarded as the land of opportunities. The island had also matured to become the third most important financial center in Asia after Tokyo and Hong Kong. The development and industrialization of Singapore was so rapid at this time it warranted the needs of land reclamation to accommodate new industries. In 1960, the size of Singapore was 581.5 sq km, this had been expanded to 710 sq km in 2011. The country is in progress of adding another 20 sq km of lands from sea.
Singapore overtook the UK by GDP per capita in 1990, all done without natural resources
Explosive industrial growth also mean that the country, in a sudden, found itself having not enough skilled labors. The city-state sweetened its immigration policies; highly-educated foreign talents from anywhere around the world choosing to work in Singapore, would be granted fast-paced PR (Permanent Resident) The huge inflow of top talents gave Singapore a highly competent labor force. In 1996, Singapore was ranked by the World Economic Forum as the most competitive economy in the world. Business Environment Risk Intelligence has rated Singapore's workforce as the best every year since 1980.
An extremely skilled workforce further strengthened its high-tech manufacturing and domestic competitiveness. The country had bred a new generation of local entrepreneurs who successfully competed with and took back the Singaporean economy from foreigners, not by affirmative acts but meritocracy. In 1980, foreign firms contribution to the economy was 73%, but in 1998, Singaporean-owned companies contributed 55% to the economy.
The Asian financial crisis put Singapore into recession, but the government immediately worked out a solution to allow for a gradual 20% depreciation of the Singapore dollar, to bring forward in advance government programs such as the Interim Upgrading Program and other construction related projects, pre-emptively agreed to CPF cuts to lower labor costs, and made no attempt to directly intervene in the capital markets, allowing the Straits Times Index to drop 60%. In less than a year after crisis, the Singaporean economy fully recovered and continued on its growth trajectory.
By the end of 1990s, Singaporean firms are ready to go global. The country signed 13 Free Trade Agreements in order to expand its external trade ties, and advised local companies to go regional. The companies would later be among the largest investors in China, Vietnam, Cambodia, Myanmar and Indonesia.
---------------------------------- 2000s -----------------------------------
Even though the Sultanate did not witness social unrest as seen in neighboring Malaysia and Indonesia at the height of financial crisis, by 2000s, Brunei began to focus on social consolidation and Islamization to preserve 'stability and harmony'. Since 2000, the country's economic stagnation was confirmed, which would led it to become the ASEAN economic laggard later on.
If we adjust the GDP per capita to inflation, Bruneians are actually richer in the late 1970s than now
Singapore GDP per capita adjusted to inflation revealed that Singaporeans today are 4 more richer than in 1970s, compare that to the Bruneian charts above
The 1990s drive for industrialization did not create a thriving manufacturing industries like that of Singapore. Manufacturing in Brunei had never accounted for more than 3% of GDP (it occupied approximately 27% of the Singaporean GDP, 13% of Dubai GDP and 1% Bruneian GDP as of 2011) The government however, refused to accept that it failed on what others succeed (Malta, Luxembourg and Iceland, 3 countries having the closest population to Brunei, for instance, their manufacturing industries accounted for 18-27% while Brunei a mere 1%)
Brunei continues to make attempts for manufacturing, such as partnering with Heidelberg on cement production, Alcoa on aluminum smeltering, and finally the high profile Sg Liang SPARK project with Mitsubishi/Itochu to produce Methanol.
One of the challenges for Brunei though, is the failure to secure consecutive follow-up investments. In its pursue for a strong semiconductor industry, Singapore attracted its first silicon wafer plant in the 1980s, since then this is followed by investments from many other corporations and the island now has 14 silicon wafer plant, 20 semiconductor assembly and test operations center, and about 40 integrated circuit design centres, making it currently the world #2 silicon wafer producer after Taiwan. In Brunei, follow-up investments from other companies after the first, is rare.
Throughout 2000s, Brunei had also tried to expand into service industries such as offshore financial banking, and tourism, with little success. Efforts was also made in food & agriculture, however, the food sufficiency target has not been reached as of 2011. Recognizing that its industries could not compete without a higher level of technologies, Brunei established the iCenter, with aim to nurture the country's technical skills. This is however, again, 40 years late. It was what Singapore had done in the late 1960s.
SPARK - another project attempted to industrialize Brunei
Malaysia and Thailand, whose industries are getting more sophisticated and capital-intensive (i.e. the 1980s Singapore) possess a far advanced industrial technologies estimated 20 years ahead of Brunei, and while Indonesia and Vietnam, the 2 newly emerging economies, are considered low-tech, they have huge production base which Brunei couldn't possibly match.
The 2000s was a period of great economic leap for Singapore. Its diversification into service industries materialized. Singapore had became the medical hub for Southeast Asia, its technological and communication hub, with 50% market share of the region's datacenter capacity. The country's engineering feat is now world's renowned, being responsible for 70% market of global offshore rig construction and 20% of the world's ship repair market. The Port of Singapore surged to be the world's busiest (until it was overtaken in 2009 by Shanghai)
One of the challenges Singapore faced, is the increasing sophistication of industries in neighboring states such as Malaysia and Thailand, who are likewise getting more high-tech. By late 2000s, the computer peripheral industries had been largely lost to Malaysia who is able to produce it more cheaply, and electronics suffered decline, prompting Singapore to identify new industries to support its economy.
Port of Singapore at night
Tourism, biotechnology and gambling were decided. After 40 years ban on casino in Singapore, the prohibition was reversed, perhaps seeing how much surplus and development gambling industries had brought Macau. Singapore set a new tourism goal of 15 million visitors by 2015 (the figure had reached 13 million in 2011) The country aggressively promote and develop its biotechnology industry, investing hundred of millions of dollars were into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore. As of now leading drug makers, such as GlaxoSmithKline (GSK), Pfizer and Merck & Co., have set up plants in Singapore.
The country became a developed country in 2006. Singapore was hit by the global financial crisis 2008-2009 but again quickly rebounded. By the end of the decade, more than 3,000 multinational corporations (MNCs) from the United States, Japan, and Europe are investing in Singapore, in almost all sectors of the economy.
---------------------------------- 2010s -----------------------------------
By mid-2000s, Brunei has a new national vision, the 'Wawasan 2035 Negara Zikir', which called for a pure Islamic economy by 2035. Rapid Islamization then proceed, which include a compulsory Islamic studies for non-Muslim students. The central focus is on the 'Brunei Global Halal Brand', however it is not known how this would generate further revenues for the country. The 'Brunei Halal' actually humored Malaysia and Indonesia, with the two having a stronger Halal Brand and are among the biggest food producer in the Muslim world, but did not seek a global Halal authority like Brunei.
Brunei 2010s - lagged behind Kuching and Kota Kinabalu
The country enacted a sudden credit card regulations in 2009, and in 2012 closed foreign property ownership through PA (Power of Attorney), with all laws being retroactive. This spooked investors and confirmed the fears of third world irregularities, the exact character Singapore promised investors in 1960s it would not be, leading to mass industrialization.
While the state concentrated on development towards building a knowledge-intensive economy, it seems to allow and ignore the continuation of brain-drain and skill outflow from the country. Upon its independence, one of the government's most important priorities is to encourage the development of Brunei Malays as leaders of industry and commerce. Participation of local Malays is required on tendering for contracts with the government or Brunei Shell Petroleum. The ethnic implementation on economic policies effectively deterred foreign talents inflow. In addition, a huge proportion of the country's Iban and Chinese population are denied citizenship, making them stateless.
With their future unsecured and not wanting the same nationality woes for their descendants, the Chinese, an economically active group in Brunei especially in the private sector, flee the country, taking with them their capital and skills to nations like Singapore, Australia and Canada. In 1960s, the ethnic Chinese accounted for 26% of Brunei's population, this had fallen to 18% in 1990s, and yet another plunge to an estimated 11% in 2010. By 2011, Brunei has 20,992 stateless population, amounted to 5% of its population. It is unclear if a knowledge economy could be fulfilled if the country is not willing to even embrace such percentage of its domestic-born population, exacerbating skilled labor shortages.
ASEAN business survey 2012
The rest of ASEAN seemingly have the same views and sentiment on Brunei's economic environment, now stagnated and slowest-growing in the region. In April 2012, the Lee Kuan Yew School of Public Policy (LKY School), the National University of Singapore, and the Singapore Business Federation (SBF), in association with the ASEAN Business Advisory Council, conducted a survey among businessmen, investors and executives across various industries from all ten ASEAN member economies. The survey asked them which ASEAN countries they and their businesses would invest in.
In the survey, Indonesia was ranked the most favored investment destination to its ASEAN peers, while Brunei the least favored. While Bruneians may have different views, the ASEAN business communities are perceiving it as a nation in decline.
Running into 2010s, Singapore has increasingly focus on knowledge and innovation-intensive activities, with R&D now a cornerstone of the country’s economic development. In hope to maintain its wide technological edge, by 2012 Singapore will be spending $8.8 billion in R&D, with the 9 other ASEAN states combined will spend $8.5 billion. Malaysia will spend $3.2 billion, Indonesia $2.4 billion, Thailand $1.5 billion, Vietnam $0.8 billion, Philippines $0.5 billion while Brunei $0.03 billion.
60 years of good governance and efficient economic planning is bearing fruit for Singapore. In 2010, the economy of Singapore overtook Malaysia, a country 5 times more populated and whom expelled it from the Federation nearly 50 years ago. But the greatest prize is perhaps, the GDP overtaking of rival Hong Kong, a dream Singapore harbored since independence.
Industries in Singapore now include electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences & biotech, and entrepot trade. Its innovative yet steadfast form of economics that combines economic planning with free-market has given it the nickname the Singapore Model. Strong export-oriented economy now provide more than enough revenues to purchase natural resources and raw goods which it does not have, a far cry from when it was still a poor and insecure state in the 1960s.
Again reviewing the export statistics, by 2011, the Singaporean (5.2 million population) exports was $409 billion compared to Brunei (0.47 million population) $10.7 billion, a sharp turn from 1960, it is now clear which country is way ahead of another.
Source:
http://www.pbs.org/wgbh/commandingheights/...g_economic.html
http://emergenteconomics.com/2012/03/12/718/
http://www.guidemesingapore.com/blog-post/...es-in-singapore
http://www.sedb.com/edb/sg/en_uk/index/abo.../the_2000s.html
http://www.nationsencyclopedia.com/Asia-an...re-ECONOMY.html
http://books.google.com.bn/books?id=z1cpiE...tsec=frontcover
http://library.thinkquest.org/C006891/reclamation.html
http://www.nationsencyclopedia.com/Asia-an...am-HISTORY.html
http://findarticles.com/p/articles/mi_hb02...ag=content;col1
http://www.ats-sea.agr.gc.ca/ase/5674-eng.htm