Global Partnership for Economic Development in Brunei, Free Essay in Economics

Brunei, just like many other countries of the world, has gotten into global pacts and partnerships that are aimed to help it develop both economically and technologically for the wellbeing of its citizens. The global partnerships have taken the form of trade agreements between Brunei and other countries of the world which have more economic power and which are capable of influencing the economy of the country through donations, borrowing from them and even grants from different governments. However, the most important aspect of the partnership of Brunei and other countries is the investment by foreign countries in Brunei in the fields such as communication and other technological and Industrial sectors. This paper examines how the global partnerships that Brunei has made are impacting on its economy and their effect on the countrys development, especially economically.

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Brunei is a small yet wealthy nation whose economy whose economy heavily depends on both foreign and domestic entrepreneurs. The most important aspect of the economy of the nation of Brunei is exportation of oil to overseas countries (World Bank Group, 2012). Brunei has formed partnerships with several Asian countries which do not produce oil and these countries import oil from Brunei, something that makes the economy of Brunei to heavily depend on the exportation of oil. The oil sales supplement what is produced domestically by the citizens of Brunei as well as by foreign countries which have invested heavily in this country. Revenue from petroleum export caters for over half of the GDP of Brunei. This clearly indicates how important the external ties that Brunei has made with other countries of the world are. The main importers of oil from Brunei are the members of the Asian Pacific Economic Cooperation (Williams, 2013).

Although the external business ties that Brunei has established with other countries of the world are helping it to develop economically because of the benefit of foreign money that comes in due to the exportation of the oil and natural gas, the government of Brunei and other Brunei leaders are having fears that the economic integration like the one exhibited in the Asian Pacific Economic cooperation will undermine and disrupt the social cohesion of the Brunei citizens. For this reason, the country has reduced its activity in the global economic integration and is now trading carefully with a lot of regard to the effect of the global economic integration to its citizens. However, Brunei as a country is finding itself between a rock and a hard surface due to the fact that it is the third largest oil producer in the South Eastern part of Asia, many countries are likely to come calling at its door to have economic ties and pacts with it so as to be able to benefit through the trade of petroleum and petroleum products which are highly demanded all over the world. In fact, many super economies of the world have decided to seek partnership with Brunei because of its richness in oil. In exchange, these countries have provided technological equipment or resources for the technological and economic growth of the nation. The technical know how as well as entrepreneurial minds continue to flow from different parts of the world to Brunei so as to exploit the resources of the country Kawai, 2005). This is playing very well for Brunei since its economy is growing rapidly for the good of the nationals of Brunei.

One of the global ventures in Brunei is the Brunei Shell Petroleum. This is a joint venture that involves several parties; the Government of Brunei and other group of companies known as the Royal Dutch or Shell Companies. These companies are from different countries which operate under one umbrella of the Dutch Shell group Companies. Brunei Shell group is the main gas as well as oil production company that has continued to sustain the economic development of Brunei and its people. The Brunei Shell Petroleum companies are the only ones which have an oil refinery in the country. For this reason, the companies cater for the demand of the petroleum products of the citizens of Brunei and also the demand outside the country. Since the government of Brunei is part and parcel of the Brunei Shell Petroleum companies group, it reaps a lot from the business. More that 50 % of the sales made by the companies are supposed to be channeled towards economic development in Brunei and this helps in developing the country (Armstrong, 1998).

The policy regarding the economic benefit of Brunei from the business of the Brunei Shell Petroleum companies group has led to the employment of many Brunei citizens. This has gone a long way in improving the lifestyles of many people in Brunei. The Gross Domestic Product for the country has therefore gone higher as a result and this has helped the country to pursue its development agenda and improve the social amenities as well as its services to its population. The oil and gas production companies in Brunei under the umbrella of the Brunei Shell Petroleum are offering employment to the citizens and this has reduced the cases of unemployment in the country. As such, much of the Bruneis resources are being channeled towards the development of the infrastructure that is geared towards increasing production of goods in the country for economic development of the country and according to World Bank (2012), his has made the country to rank highly in the Asian continent as one of the wealthy economies. This is not just in the Asian continent but it is also in the world.

The other global parties that have docked I Brunei for its benefit include the French oil company by the name Elf Aquitaine which became active in the nation of Brunei way back in the 1980s. This company has helped the country to explore its oil deposits and since 1980s, the company has discovered a great potential of oil in Brunei which has left the Brunei citizens and its leadership smiling and becoming a hot cake in the Asian continent for partnership by other countries of the world. As a result, the French oil company has found new partners recently from New Zealand named Fletcher Challenge which are also operating under the French Company concession of exploration of oil in Brunei (Siddique, 2007). The partnership is planning to undertake oil exploration of the country in deep water bodies of the country. If at all some deposits will be discovered, then more and more global parties will continue to be pulled to this wealthy nation of the South East Asian continent. This will continue to mean well for the country and in fact, it is set to enhance its economic growth and speed up the countrys development.

Japan has established a long term agreement with the Brunei in the gas production. Most of the gas production in Brunei is done at the Liquefied Natural Gas Plant abbreviated as (BNG). The plant has been in existence since the year 1972 and is one of the biggest plants that process the natural gas in the world. This is a clear indication that Brunei is faced with great demand for natural gas from all parts of the world which experience deficiency in this very important earth product. In the Agreement that involves the government of Brunei and that of Japan, Brunei is supposed to provide more than five million tones of natural gas through the LNG plant to Japan, particularly to the Japanese company named Mitsubishi. This company has joined hands with the Brunei government and the Shell as well as other parties such as Brunei Cold gas and Bruneis Shell tankers to produce natural gas in the process of refining petroleum and this gas is exported to Japan, which is one of the biggest economies of the world. This means that Japan has pumped a lot of resources into the venture and the biggest beneficiary is Brunei which gets a lot of resources in terms of funds and finished products from Japan at a slightly cheaper coast due to the business agreement that exists between the two nations.

Due to the involvement of super economies like Japan in Brunei, other economies of the world that command a lot of economic power such as the Unites States of America and the United Kingdom have developed interest and are also exploring and engaging in various economic partnerships with Brunei which are geared towards breaking some of the barriers to the trade with outside countries (Williams, 2013). This has led to the opening up of other new markets for the Brunei petroleum as well as other markets. The result has been the enhancement of infrastructural development and economic growth for Brunei due to increased GDP for its people. The interaction with other developed countries has also opened up new opportunities for Brunei citizens in the Diaspora and this has improved the wellbeing of the nations economy.

The oil and gas industry has continued to mean well for Brunei as a county. This is due to the fact that technological advancements in many parts of the world have increased the demand for petroleum products (Kawai, 2005). As a result the partnerships that Brunei has established with the various global economies have significantly and positively impacted on the economic status of this nation and significantly improved the life of its citizens. The long term pact between Brunei and Japan for example has rocked the world and as we speak now, the shell tankers have become a favourite choice for many entrepreneurs engaging in the oil and gas businesses in many parts of the world. This communicates a lot about the economic benefits of the partnerships that Brunei is having with many countries of the world.

In conclusion therefore, the global partnerships for economic development in Brunei are on the rise and will continue rising due to the potentialities that the country has and is continuing to discover which is attracting the attention of so many countries of the globe. This can only mean well but as the leaders of this country say, it may as well undermine the cohesion of its people putting it to endless conflicts.

References

Armstrong, H. W, & Read, R. (1998). Trade and growth in small states: the impact of global trade liberalization. The World Economy, 21(4), 563-585.

Kawai, M. (2005). East Asian economic regionalism: progress and challenges. Journal of Asian Economics, 16(1), 29-55.

Siddique, M. A. B. (2007). Regionalism; trade and economic development in the Asia-Pacific region. Cheltenham, UK: Edward Elgar.

Williams, B. R. (2013). Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis.

World Bank Group (Ed.). (2012). World development indicators 2012. World Bank Publications.