Brunei Darussalam, the country situated in the very centre of Southeast Asia has so much to give in the region. Not so much of its petrocurrency as many would think of but in terms of human potential, Islamic finance, and location as a trading hub. These are some of the top three identified industries that could ultimately contribute to our nation’s economic growth and ultimately the nation’s survival.
But is the nation too complacent with oil money than to develop leaders to head on these projects effectively? If we were to ignore the calls of these actions, what then would be the consequence?
Let’s look back in history at a time when Spain was at its dynastic height in the 15th Century. Their ascent to power were fueled by the discovery and exploitation of Silver and Gold in South America. Nothing seem to slow their growth down in their ever-extending conquest of nearby land and sea. Every neighbour with similar intent seem to be terrified of their wealth and power.
One of the neighbours was the Dutch. Once a colony to Spain, they rebelled and fought against the invading Spanish kingdom. Under the call for independence, they saw that the only way to beat the Spanish was to focus in economic growth.
From this philosophy came the financial innovation that would one day dominate and shape the world we live in today. It was during these crisis that they invented the Stock Exchange(Amsterdam Exchange), Joint-Stock Holdings Company(Dutch East India Company) and the Central Bank(Bank of Amsterdam).
With these tools, the Dutch were able to finance their wars effectively and conduct trade across the Asian peninsula profitably. It was a key instrument in sustaining its economy and building the wealth of the nation.
When the war came to an end, the Dutch emerged victorious. Not because the Dutch won the war but because the Spanish lost it.
It began with Spain’s tendency to finance everything with money. In raising up an army and purchasing weapons in their conquests, they utilized gold and silver as their main source of exchange. This method became the anathema for the economy because 1) their expenditure effectively devalued the gold and silver metals 2) it pushed prices of basic necessities up the ceiling 3) this leads to the weakening of the kingdom’s military and political prowess in the process.
The result was devastating. From 1600-1650 the monarch accumulated deficits and produced continous internal strife that ultimately defaulted the country not once, not twice but 16 times and thus dethroned the ruling body of its time.
On another hand, the Dutch continued to thrive and built themselves into a super-economic entity that rivalled that of Great Britian during its imperial height. Through the mercantilism exchange, the Dutch became wealthy and powerful. It is in this state that also gave birth to liberalism.
The illustration only serves as a case study on how damaging it is for nations spend its way out of trouble. This philosophy is still with some of our senior leaders today, unfortunately.
So how can we, Bruneians move from here?
One thing for sure everyone needs to learn the importance of innovation in this global age; not simply utilizing oil and gas as an all-out solution. We need to remember these resources are just tools for the end goal.
What is the end goal then? To make Brunei Darussalam into a country which can promote commercial value in niche industries such as Islamic finance, commerce and trade, and human potential. (More will be expanded in these subjects in later writings)
Equally important question: what is not the end goal? Relying too much in petrocurrencies in solving our problems instead of utilizing our people’s innovative capacity to build new lines and methods to serve a greater lot to the public through enterprising and creative projects.
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