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Brunei : Brunei Finance Profile

2015/02/18

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Brunei Darussalam: Developments in Regulatory Reform


Key features of Brunei Darussalam’s regulatory reform

Strengthening competitiveness and enhancing productivity in the public and private sectors have always been acknowledged as significant to the development of Brunei’s economy. Since the early 1990s, the gradual introduction of market liberalisation and privatisation has changed the structure of Brunei’s economy and triggered further reforms to be initiated and undertaken.

Currently, there is no specific, central agency in Brunei with responsibility for reviewing and undertaking regulatory reforms. All agencies are mandated to undertake necessary regulatory reforms to raise productivity and improve performance in the public and private sectors. This helps to ensure continuous evolution that will align Brunei’s development with world trends. Regulatory reviews are as well undertaken by sector-specific regulators and agencies concerning issues within their jurisdictions.

Legislation, policy and principles

The Brunei economy is guided by a long-term development framework, a 30-year plan that follows a National Vision. The National Vision or the Wawasan Brunei 2035 aims to create a country with highly educated and skilled people; one that provides for a high quality of life and one that supports a dynamic and sustainable economy. Embedded within the framework is the “Outline of Strategies and Policies for Improvment(OSPD)” that is intended to guide ministries and government bodies towards the succcess of the 2035 National Vision.

Part the strategies and policy directions included in the OSPD, the “Institutional Development Strategy” particularly provides for a strong foundation for the reform schedule in Brunei. Under this strategy, the policies include:

Ensuring a modern legal system that is clear in its provisions and application, and a judiciary system that ensures independence, fairness and impartiality (Policy Direction #26);

Introducing regulatory frameworks in line with international best practices (Policy Direction #27);

Building a modern and effective civil service that facilitates national improvment(Policy Direction # 28);

Streamlining government procedures and regulations to enable prompt decision making, provision of high quality public services and minimisation of “red-tape” (Policy Direction # 29);

Creating new institutions such as an independent ombudsman to ensure accountability in the public and private sector (Policy Direction #30); and

Ensuring that the economic policy is well planned and implemented part the key government agencies and all others involved (Policy Direction #31).

In addition, other policy elements that support the reform schedule can as well be observed in other strategies of the OSPD, specifically those that highlight the need for measures to enhance productivity and competitiveness. These include:

Promoting national competitiveness through policies that encourage productivity, economic openness and competition (Policy Direction # 12);


2009 APEC Economic Policy Report

Privatising those services currently provided by the public sector that are best undertaken by the private sector (Policy Direction # 16); and

Promoting good governance in both public and private sectors with particular emphasis on honesty and accountability to ensure public confidence and trust (Policy Direction # 23).

In addition, international surveys and indices such as the “World Economic Forum-World Competitiveness Index”, the “World Bank-Relieve of Doing Business Survey” and the “United Nations Development Programme (UNDP) – Human Development Index” further spur efforts to improve areas where rankings for Brunei require further enhancements. Furthermore, involvement by multi-lateral agencies such as the IMF, WTO, APEC and ASEAN in rolling out regular policy reviews for Brunei have as well played a major role in creating better awareness for the reform schedule.

Objectives of regulatory reform
To provide its people a bright and prosperous next, Brunei must be able to adapt to world changes and all that these entail by way of innovation and bold planning. Efforts to change the private sector aim at improving competitiveness within and beyond the local market while allowing for a additional productive, transparent and conducive environment for businesses. Similarly in the public sector, frequent reviews of current operational and administrative systems, inclunding process and procedures, are aimed at improving the in general standard and performance of the civil service so as to create better standards of governance, better efficiency in service delivery inclunding better transparency and accountability.


Mechanisms and institutions to oversee regulatory reform

Institutions

Several bodies within Brunei play a role in raising and managing reforms:

The Civil Service Reform Committee was formed in November 1991 and is chaired by the Prime Minister’s Office. The committee is tasked with overseeing the development of a civil service that is competent, effective, responsive, progressive, innovative and dynamic. It is responsible for reviewing, introducing and monitoring reform initiatives in the civil service as a whole.

In 2007, the Steering Committee for Public Service Delivery (Jawatankuasa Pandu Pemberian Perkhidmatan Kepada Orang Ramai oleh Agensi-agensi Kerajaan) was formed and co-chaired by the Prime Minister’s Office. Part its responsibilities, the committee is mandated to address issues and problems that lead to poor services delivery by the civil service inclunding to facilitate integrated coordination part relevant government agencies involved. Under the purview of this committee as well, the Change Management Committee was established in April 2008 with the responsibility, part others, to suggest, coordinate and facilitate initiatives towards streamlining and improving business processes.

Under the responsibility of the Management Services Department (MSD), various initiatives geared towards enhancing a culture of excellence and innovation in the performance of the civil service are supported. These include initiatives such as the Civil Service Excellent Award (CSEA) and the Quality Control Circle (QCC) Programme. These efforts not only enable the Government to adapt to environmental changes but as well to continuously strive to improve the quality of services rendered to the public. Furthermore, the department is responsible for developing the Client’s Charter and in ensuring that all government agencies adhere to their individual charters in good faith.

The Ministry of Industry and Primary Resources plays a major role in co-ordinating reform efforts, particularly in facilitating a conducive environment for businesses in the private sector. The Ministry initiated Brunei’s participation in the “World Bank - Relieve of Doing Business” study and plays a major role in disseminating the results of the study inclunding in highlighting issues to be addressed by the relevant government agencies and stakeholders.

The Ministry of Finance plays a major role in introducing, implementing and reviewing amendments to the country’s financial policies, rules and regulations with a view to enhancing transparency and accountability inclunding encouraging investment into Brunei.

The Department of Economic Planning and Development is the major agency responsible for the formulation of the Long-Term Development Plan (LTDP) for economic and social policy and planning for the country. The LTDP as well emphasizes on the monitoring and evaluation of strategies, policies, programs and projects particularly through the system of key performance indicators (KPI).


Awareness, support and transparency
The OSPD provides a clear foundation for regulatory reform towards achieving sustainable economic increase and in promoting economic efficiency. Its publication and dissemination in 2007 has further increased awareness for the reform schedule in Brunei. Furthermore to ensure an adequate and appropriate level of public acceptance, support and transparency, a number of consultations were held, such as with other government agencies, grassroot leaders, students inclunding with business associations.

In addition, the introduction of the Clients’ Charter in 1995 as well provides an avenue for the public to submit their complaints and grievances relating to the quality of service given by the civil service, with the Management Services Department holding the responsibility as a “complaint centre”.

Commitment in terms of time and resources at the highest levels of government as well further strengthen the mobilisation of reform efforts, both in the public and private sector.


Improving the quality of regulation

Regulatory tools, systems and processes for improving the quality of new regulations (Flow and Stock)

Brunei Darussalam understands the importance of systematic regulatory review, and acknowledges the benefits that can be gained from using regulatory tools such as Regulatory Impact Analysis (RIA).

In the absence of a centralised authority responsible for regulatory reform, Brunei is currently dependent on the strengths and capabilities of individual government agencies to conduct thorough research and undertake appropriate reform measures that would enable the economy to be additional effective, efficient and innovative.


Future challenges and lessons learnt in promoting regulatory reform

Lessons learned in promoting regulatory reform and major evolution in the completed five
years

Even in the absence of a central agency for regulatory reform, evolution has been promising. There are new bodies specifically tasked with overseeing and reviewing reforms in the private sector, taking a lead particularly from international surveys such as the Relieve of Doing Business Study. The relieve of starting and registering a business in Brunei is part the issues that being looked at instantly.

Part the notable reforms undertaken to date is reform of the telecommunication sector with the corporatisation of the national telecommunication agency in Brunei (Jabatan Telekom Brunei) as a new company – Syarikat Telekom Brunei Berhad (TelBru Sdn Bhd) with result from the 1st April 2003. With the corporatisation of the national agency, additional competition was injected into the sector resulting in a wider availability of choices and a reduction in prices, particularly in the cellular mobile segment. Other reforms include the amendment of the Land Code (Strata Title) Act, gazetted in 2009, which allows for the validity of property ownership to be extended from 60 years to 99 years and as well enable property owners to own space in a multi-level building.

From completed experiences, the synchronisation of roles and responsibilities is an significant element in ensuring increased competitiveness and that desired objectives are met. Issues may sometimes cut across a number of different agencies and stakeholders and thus may lead to duplication in resource allocation. Improved coordination can help avoid the development of regulations that are contradictory or unsupportive of economic development.

Top management support for reforms is as well crucial to ensure successful implementation and enforcement. It is Brunei’s experience that reforms may take a long period of time and may require multiple consultation exercises with the public in order to ensure broad acceptance of any new changes.

Future challenges

In view of Brunei’s small and incomparable economy, strong emphasis has been placed on the need to develop a competitive edge. Brunei sees the development and efficient functioning of the market and the private sector as a crucial undertaking that needs to be considered adequately and appropriately.

The need for continuous and positive reviews of regulations, particularly those that may help streamline government procedures and reduce the burden on businesses, will further assist towards achieving this objective.

Developing a additional coordinated system for regulatory reform reviews should as well be considered. Efforts to think beyond periodic reviews should be translated into actions. Public support through regular consultations and awareness building is as well significant in ensuring transparency and to avoid unnecessary regulations. Reviews should be conducted both prior and subsequent to the implementation or removal of any regulations so that enforcement of any existing or new regulations can add price to the process in its entirety.

Moving forward, Brunei Darussalam acknowledges that there is still a lot to be done in developing a proper regulatory reform policy. In the meantime, Brunei believes in the need to instil the right mindset to support positive reforms and to develop a stronger foundation for the regulatory reform process.