The future of the post-oil Bruneian economy is mixed with a streak of optimism and pessimism in the general Bruneian psyche today. Such future brims with optimism because the current younger generation is being equipped in paving Brunei in the tricky waters of the 21st century; pessimism because there are no concrete plans on how to capitalise Brunei towards achieving the maximum amount of effort to sustain itself economically in the post-oil economy. Otherwise Brunei would have been diversified by now, but instead, the economy is still 95% dependent on Oil. It is, therefore, the aim of this article to drive home the message to decision makers today the need to introduce policies to help soften the blow once the Oil runs out. These policies are not necessarily popular nor will it help political score points in the short-run, but it is nonetheless policies that require immediate careful attention if we are ever to prepare Brunei in the post-oil era.n
The first policy that needs to be revived is the re-introduction and re-imposition of income taxes. Reflecting on a society that has been cushioned from hard work and has been spoon fed with welfare their entire lives, such a change may cause an immediate outcry. Nonetheless, it is still a vital policy needed to modernise our national system. To soften the blow, we should consider introducing a flat tax of 1% per year for everyone who is subscribed to TAP and SCP. The reason why 1% must be set is so that we can acclimatise and normalise the mindsets of the Bruneian public to pay their “due share in society”. Such amount can be progressively increased within the next few years once they are used to the system. In addition, it can serve as a starting ground for policy-makers to get a hold on the system. This means building the basic competence for our taxman and tax-related agencies the means to reform, carry out, and enforce the policy through this experimentation-based process. We do not need to look any further for expertise. We can always import professionals from UK, Qatar and Singapore to assist in drawing up the legislation and financial systems in place for the re-introduction and re-imposition of income taxes.
The second policy is to switch mass private motor usage to public transport. The government spent a whopping $400m in 2014 for oil subsidy alone, almost 15% of the national budget of 2016. This notwithstanding the carbon emissions being produced year on year – Brunei was the highest carbon emitter in ASEAN in 2012. The capital invested in the oil subsidy must be channelled towards building the public transport system instead. While the bus transport system is not to London standards or in high demand today, it would be unrealistic to say that Bruneians will continue to use their own cars one day when most of them no longer rely on government hand-outs and support. By then the Bruneian public would be using buses (or tuk tuks), much like its counterparts in this region such as Malaysia, Singapore, and Phillippines. At the same time, Brunei should strive to increase car duties and taxes, as well as to increase the complexities and fees of applying for a driving license so we can achieve the overall policy of switching mass private motor usage to public transport in the country. Such process must be intensified over the course of the next few years.
The final policy for Brunei to succeed is to opt for an ‘open-border’ immigration policy. It is a contentious issue that I know are discussed with hushed voices behind closed doors, but we must face the reality that this is the path forward if Brunei intends to succeed. An open economy that would embrace immigration in the region or the island should be the aim. We can start off by opening our borders to Malaysia and then Indonesia in Borneo, and then gradually in the ASEAN region. A passport-less entry into Brunei may evoke traditional racism by conservatives or the Trumps of our society, but the advantages of immigration tend to outweigh the negatives as it would generally lead to more trade and competition. These factors then contribute towards the improvement of our national productivity and development. Dubai has done the same. Out of its 5 million population, only 300,000 are locals. The other 95% are made up of foreigners. If Dubai can do it, Brunei can too. To those Bruneian Trumps who may be against open immigration, we have to realise that the Puak Kedayan were formerly Javanese skilled rice plantation workers who migrated to Brunei by Sultan Bolkiah the 5th’s orders. These people then integrated into our society and consequently enhanced the performance of our polity.
To conclude, Brunei should take precautions to prepare for a post-oil economy in order for our nation to capitalise on the changing global order. Three policy recommendations include the gradual re-introduction and re-imposition of income taxes, the switching of private motor usage to public transport, and to produce an open-border, passport-less immigration policy to drive up the population and market base in order to prepare the nation for a post-oil era. Either we take these hard steps to carry out these policies with all the resources that has been bestowed by providence today, or we can squander everything that may seem so sweet (i.e subsidy and welfare) in the short-run but would be most damaging to everyone in the long-run.