Brunei's
oil and gas sector needs to be diversified so that its benefits could branch
out to other sectors of the economy, a consultant Wednesday said.
Sasha Lennon, director of SGS Economics &
Planning, said that Brunei lacks linkages between the oil and gas and the other
industries, leading to a small multiplier effect.
SGS Economics, appointed by the Centre for
Strategic and Policy Studies (CSPS) for the Land Optimisation Strategy for
Industrial and Commercial Growth, said that Brunei fares poorly when compared
to neighbouring countries.
SGS' slide shows that 64 per cent of Brunei's
revenues from the oil and gas sector is being contained within the industry
rather than branching out to other sectors of the economy.
In Malaysia, on the other hand, one per cent
is contained within the oil and gas industry, while the other 99 per cent goes
out to other sectors of the economy, while in Australia, around 88 per cent
goes out to other sectors.
"When there isn't many activities to
other industries in the country, it leads to Brunei having a small
multiplier," Lennon explained.
He said that what SGS is suggesting is to
identify seven clusters in line with its strategy on how the optimisation of
land can facilitate foreign direct investment, and ultimately, economic
diversification.
He added: "We made a point the oil and
gas sector needs to be diversified. By promoting other activities in the
services industry or mining, that wealth can be captured locally."
Some of these sectors would be advance
business services like financial, technical or scientific services, and other
possibilities like surveying or mining.
"Another obvious sector is the transport,
communication and logistics. We should see how that sector can be focused on so
that it can potentially serve the oil and gas industries, and other
activities," he said, adding that Brunei needs to embrace its geographical
location.
Lennon said that if Brunei builds on its
petrochemicals sector first, the development of new business and opportunities
will emerge in other areas, like transportation, logistics and so on.
"When you develop those multipliers and
the income is retained in domestic economy, it will then develop more creative
industries and so on," he said.
The SGS land optimising strategy identified
seven future industry clusters, namely: petrochemicals and energy; transport,
communications and logistics; creative industries; advanced business services
and financial services; tourism; education; and biodiversity, food and
pharmaceuticals.
Goh De No
The Brunei Times
Business & Investment Opportunities
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