Competition from Brunei’s infrastructure economy
John Teo 

Borneo, among the world’s largest islands, has no shortage of physical superlatives of both the natural and man-made kinds. There is, of course, Mount Kinabalu, the highest peak in Southeast Asia, and the Mulu Caves, the largest network of underground caverns to be found anywhere.

The man-made type will presumably include Sarawak’s massive dams, Petronas’ Malaysia Liquefied Natural Gas (MLNG) Complex in Bintulu and perhaps the Pan Borneo Highway now under construction that will run the entire length of the island from Sarawak all the way to Sabah.

Less well-publicised but no less mind-boggling is a massive bridge now under construction in Brunei. The Temburong bridge will not just be Borneo’s longest but also possibly the region’s as well. At 30km long and jutting out into the Brunei Bay, it will link up the two enclaves of the sultanate now physically sliced in half by Sarawak’s Limbang district.

Built at an estimated cost of a whopping RM5 bil, the bridge is slated for completion before 2020. When completed, there will be no need for Bruneians to criss-cross Sarawak when travelling from the Brunei-Muara district (the main population centre which includes the capital, Bandar Seri Begawan) to the wilderness that is largely the Temburong district.

That journey now is notorious for the fact that travellers will get half a dozen passport stamps going in and out of the Sarawak-Brunei border points along the way.

And if the bridge is breathtakingly impressive for its scale even right now when it is only about mid-way into completion, less clear is what economic imperatives drive its construction in the first place, even if the political imperative to physically link up the two halves of Brunei may be more easily understood.

Temburong now is noted for its lush virgin rainforests and not much else. Bruneians from the main half of the country will travel into that wilderness primarily to commune with nature. It is not even clear if large-scale nature tourism is the main economic rationale for such a mammoth infrastructure investment or if it is even desirable if it were indeed the key reason for the bridge link.

The natural forest cover in much of the rest of Borneo has already been so much ravaged by over-exploitation and over-logging that largely untouched Temburong is about the only remaining large stand of virgin rainforests left on the entire island.

Will the new bridge spell long-term doom to even that enviable status?

The tiny sultanate rarely ever makes it into the news internationally but a series of recent reports in the Financial Times (FT) highlighted the unaccustomed economic challenges confronting the country and its roughly half a million people, coming with the persistently low oil prices of recent years.

Oil and gas have been the modern mainstay of Brunei’s economy and there has been little need and incentive for its people to economically branch out and diversify even if some government push has been felt on and off over the years.

With oil prices roughly half of what they used to be in the good old days of even a few years ago and no immediate prospect in sight of any major price upswing, Brunei is naturally feeling budgetary pressures as are all the other countries overly dependent on oil revenue. FT, quoting International Monetary Fund estimates, said in a report on Sept 3 that the sultanate’s oil and gas revenue likely fell by three-quarters in the four years to 2015-16!

The generous welfare state that ordinary Bruneians have long been used to and which keeps the mini-state politically harmonious surely cannot be sustained with such revenue shortfalls over any extended length of time.


Upgrading its main port

It is thus not surprising that Brunei is taking perhaps a collective long and deep breath and seeing salvation in a China-like, infrastructure-led economic boom, however incongruous it may seem to compare tiny Brunei with the economic colossus that is China.

Aside from that mammoth bridge under construction, Brunei has in recent years upgraded its international airport and is doing likewise to its main port at Muara. A US$3.5 bil petrochemical complex is also being developed. The last two projects involve some Chinese business interests.

The expansion and future positioning of Muara port bear watching for ports in Sabah and Sarawak, particularly Sepanggar Bay in Sabah and Bintulu in Sarawak. Will the involvement of Chinese interests give Muara an edge over Sabah and Sarawak ports in the hunt for cargo transhipment business in and out of Borneo? Will competition instead of pooling of cargoes between Sepanggar Bay and Bintulu cancel out both their competitive edges and leave any opening for Muara to exploit?

Given the very limited economic bases of Sabah, Sarawak and Brunei even combined, the real economic imperative for all three ought to be to join forces and cooperate rather than to engage in possibly destructive efforts to outdo each other.

But if the building of the Temburong bridge provides any indication, the impulse seems to be to view economic matters narrowly within borders rather than to look into possible win-win propositions from joint economic cooperation.

Brunei, as the only fully independent entity on the entire island of Borneo and with its own national airline to boot, is well-positioned to play a fairly significant economic role vis-à-vis the other parts of the island if it plays its cards well.

The sultanate, for example, will have been quite a good fit for Sarawak which has been seeking to gain greater air accessibility to the rest of the region for many years but with disappointing results.

Time was when Royal Brunei Airlines (RBA) flew to several points in Sarawak, given that the state is an obvious catchment of air passengers to feed into the airline’s regional destinations – if connections are conveniently synchronised and air fares are priced competitively.

As things now stand, RBA has given up flying even to Kuching, removing the last remaining air connection between it and Bandar Seri Begawan.

If Brunei is seriously seeking to chart an economic future away from a dependence on oil and gas, it needs to dust up plausible proposals such as it becoming a regional air hub, in collaboration with Sarawak.

John Teo is based in Kuching. Comments:

This article first appeared in Focus Malaysia Issue 250.