BRUNEI MOVES TO ENHANCE LOCAL COMPETITIVENESS.

The establishment of the Asean Economic Community (AEC) will sustain the growth of Bruneian businesses, helping the sultanate attain its goal of diversifying its oil-dependent economy.Analysts and business leaders interviewed by TheBrunei Times said regional integration will allow most local businesses to access a wider market.This, in turn, will develop the private sector and provide more job opportunities to Bruneians.

According to Dr Mohammad Parvez Imdad, senior economist at the Asian Development Bank, the AEC is predicted to boost the annual income growth of the region by 0.5 to one per cent, and increase the FDI stocks by 28 to 60 per cent.He said Brunei stands to benefit from this, noting that the sultanate has been active in working

towards increased liberalisation of trade and travel restrictions in the region.But the AEC’s gains will only be realized if Brunei implements policy reforms that will make its businesses competitive.

“I’m sure the Brunei government will take care that its institutional strengths are increased, skills and capacities are further enhanced and overall economic competitiveness is expanded,” he said. According to Lisa DP Hj Ibrahim, member of the Asean Business Advisory Council (Asean BAC) for Brunei, “a lot” of local business standards are being raised as the companies gear up to become more competitive under AEC.“That is good for the country in the long term because it improves the other aspects in business such as corporate governance,” she said.Asean BAC Member Fauziah DSP Hj Talib said Bruneian businesses are capable of competing“head on” with their peers in the region.“We’re optimistic that Brunei businesses can compete but they will also need an environment that allows them to compete on a level playing field with other companies,” she said. Asean BAC members have proposed several business-friendly reforms that can sustain growth of local businesses, especially small and medium enterprises (SMEs) which account for over 90 per cent of the country’s private sector.Fauziah said Brunei needs to reduce its processing time for labour quotas so that they will be able to expand their workforce without

affecting their daily operations.“It takes about a month or more (to process labour quotas) which is not good for business.

Businesses need assurances that they will get it so that they can compete,” she said.Lisa DP Hj Ibrahim said companies should be given a buffer that will allow them to increase the number of positions when they bid for larger projects. For example, if a company has seven staff members, it can be given a quota of 10 which will allow the company to have some headroom to scale quicker.“SMEs may lose on a tender (for a project) or may not get it done on time if they have to reapply for quotas to create new positions each time,” she said.

A dedicated agency for SMEs is also needed to address the specific concerns of entrepreneurs.Lisa said this agency can serve as a one-stop administrative centre, keeping SMEs from going through different government agencies just to process papers or work on their concerns. Lisa said such an agency would also make it easier for the government to identify problems that affect SMEs and be able to respond with programmes that are tailored to meet their needs. Such an agency is yet to be established but this has been proposed during the 11th Legislative Council in March 2015.Yang Berhormat Pehin Orang Kaya Seri Utama Dato Seri Setia Hj Yahya Begawan Mudim Dato Paduka Hj Bakar, who was the then Minister of Industry and Primary Resources, said a law creating a body that oversees the development of micro-enterprises was being drafted.The SME body will have authority to handle legislation,finance and be able to hire its own staff. It will also enter into joint ventures or agreements with institutions and organisations that will foster the growth of micro-businesses in the country.

But whatever these plans are, Fauziah said it’s important to consult SMEs prior to their implementation.

“Having a plan on the side without involving the business people will only lead to a plan that does not

meet the needs of the business community,” she said. Lisa said local entrepreneurs also need to know more

about AEC and change their mindset from being afraid of competition to being more opportunistic in a much

larger market.“It is about figuring out how to take advantage in a region with a potential market access to 600 million people while also being ready for competitors,” she said.