Successful coronavirus containment, loosened restrictions . . .
As of today, Brunei – the smallest country in Southeast Asia by population, with 440,000 – has 141 confirmed cases of COVID-19 and one death. Following its first case on March 9, the Bruneian authorities imposed an international travel ban, restrictions on public gatherings, and closures of mosques and schools. Unlike other ASEAN members, Brunei did not enforce a total lockdown, but rather encouraged all businesses to remain open while maintaining social distancing and practicing hygiene measures. The government also opened the Tempurong Bridge, a major Chinese Belt and Road Initiative project, ahead of schedule to provide essential services and goods to the isolated Tempurong district.
Gloomy economic outlook . . .
Although Brunei is the wealthiest economy in the region due to its oil and gas reserves, the pandemic will have major impacts on its economy. The IMF forecasts Brunei’s 2020 gross domestic product (GDP) growth will be 1.3 per cent, down from an earlier forecast of 4.7 per cent. The country’s oil and gas sector, responsible for over 50 per cent of the country’s GDP, will be hardest hit given the global downturn and decline in the number of infrastructure projects in Brunei. At the same time, Bruneian authorities have taken measures to support its public and private sectors, especially tourism and hospitality. The government will defer payments on loans for six months and will pay 25 per cent of private employees' salaries for three months.
Continued Chinese investment . . .
Even amid the COVID-19 pandemic, China is stepping up investment in Brunei. For example, the Temburong Bridge was built by the China State Construction Engineering Corporation, creating a key corridor for this isolated region. Since the pandemic, no Chinese investment projects have delayed their operations in Brunei, with China’s Hengyi Petrochemical Company continuing oil refinery and other petrochemical industry projects in Pulau Muara Besar and a China-Brunei joint venture continuing to upgrade the Muara Port – the largest port in the South China Sea. We should expect Brunei to continue to play a crucial role in China’s geopolitical strategy, even as the pandemic impacts the promotion of 2020 as a year of tourism between the two countries.
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