| Azlan Othman |
MEMBERS in the World Trade Organization (WTO) are encouraging Brunei Darussalam to accelerate the pace of economic diversification away from its hydrocarbon resources.
In view of the current low world oil prices, Brunei has also been encouraged to reduce remaining restrictions and barriers to foreign direct investment (FDI) and promote a more business-friendly environment so as to increase participation of the private sector in the economy – which remains limited.
This was highlighted in the WTO chairperson’s closing remarks on trade policy review on the Sultanate which was released this week.
To this effect, Brunei indicated that it will establish government-linked companies to serve as catalyst in areas where the private sector has been constrained by lack of access to technology and resources.
Members have praised Brunei for having further simplified and liberalised its trade regime, notably by reducing its average MFN applied tariff from 4.8 per cent in 2007 to 1.7 per cent in 2014.
Despite the global economic crisis, macroeconomic indicators have remained sound during the review period, with low inflation rate, strong fiscal position and current account surplus.
Members appreciated the Sultanate’s strong support for the multilateral trading system, having already notified its Category A commitments under the recent Trade Facilitation Agreement.
At the same time, members took note of Brunei’s active use of regional and bilateral trade agreements to deepen its integration into the global economy.
It was noted that Brunei has never used trade remedy measures, nor was it subject to WTO trade dispute proceedings. Members also encouraged Brunei to address its outstanding WTO notifications.
Brunei was commended for moving ahead with significant legislative and regulatory reforms. These reforms have included strengthening legal frameworks in areas such as business environment, financial services, fisheries and intellectual property.
Brunei was also encouraged to complete additional legislation on competition, while promoting greater transparency of government decision-making on trade policy matters.
Overall, members were pleased with the strategy that is under way in Brunei as outlined in its National Vision 2035, as well as the manner in which open trade and investment regimes formed part of this strategy, as this would allow Brunei to develop and further reduce its dependence on one sector.
The members felt it was important to not lose sight of these medium- and long-term goals, while at the same time keeping markets open, promoting business development, further liberalising the investment regime, providing adequate intellectual property protection and encouraging a more level playing field in the economy between state-owned enterprises and private entities, foreign or domestic.