Concern Over New Business Hours

by Ben Ng
Borneo Bulletin Weekend
Saturday, 26 January, 2008

A proposed move by the relevant authorities to redefine the operating hours of businesses has generated concern among the business community and members of the general public.

Some entrepreneurs are however hopeful that the authorities will reconsider the move, especially in helping the Small and Medium Enterprises (SMEs).

In an official directive made public to business operators this week, restaurants, cafes, convenience stores, salons, supermarkets and gymnasiums have had their operating hours cut short.

The Bulletin learns that at a meeting held in November last year it has decided that all supermarkets will have to be closed by 11pm, restaurants/cafes/eateries by 12 midnight, convenience stores by 11pm, barber shops and salons closed by 8pm, and gyms closed by 9pm respectively. The details of this decision were circulated to business premises early this week.

The move puzzled many, as the "cafe culture" as elsewhere in the region has become one of Brunei's popular pastimes.

"It's certainly a step backwards," said the owner of Brunei's late night cafe.

He also spoke of the Kiulap commercial area, and took it as an example of how the new ruling would affect both business and tourism.

"(Kiulap) is an up-and-coming area. There are two hotels where tourists and business travellers are accommodated. And now, 24-hour cafes or cafes which open beyong midnight can no longer facilitate their needs," he said. So is the case in Bandar and Gadong, he added.

He feels the chances of hotels opening up in-house 24-hour cafes to compensate, is unlikely. "No hotel is going to open up a 24-hour in-house cafe, because of the cost and the uncertainty of the patronage."

Restaurants are allowed in all hotels to operate 24 hours a day, but they will only be allowed to serve hotel guests, and not walk-in diners.

"Certainly, it will affect Brunei's goal of promoting its SME's and foreign investments... because cafe owners tend to be on the whole, very young people who do it not only for the money, but it fits the lifestyle of Brunei," a regular patron at a cafe said.

"So, their enthusiasm and entrepreneurship is dimmed by these kind of restrictions, especially now that everywhere in the world, even Australia - which was restricted before - is making efforts to open up till the early hours of the morning."

Another young customer who was surfing the net on his laptop said cafes and coffee shops serve a purpose for the young people who gather there to exchange intellectual ideas.

"I think it will do tremendous harm, first of all, to the economy of the country, secondly to the image of the country. Business investment will suffer and businessmen will be left wondering why they suddenly slapped on this rule," he added.

The proposed move will definitely affect business, said the Operational Director of a popular cafe in the Gadong commercial area, especially on weekends.

"I think this will definitely affect the local SME's," he said, "especially people who have gerai's and sell food late at night."

"We don't know the reason for why they're doing this. I just don't understand," he said.

If the demand is there, it would be logical to open till late, he said. "This is business."

"But 12 midnight? We feel it's a bit too early, especially for cafes. There is a demand. People want to stay out late on the weekends, to watch football or just unwind. So we don't understand why they are enforcing these rules," he continued.

"I don't know what benefit it will bring either. It will probably force cafes to operate illegally at late hours of he night." The only entertainment that is currently available in Brunei he said, were "basically cafes and restaurants. Where else can you gather? For a place that has limited entertainment, the cafe scene is very important."

He feels the move will "definitely bring a negative impact". "It's not a progressive move if we want to be on par with the rest of the world. We're definitely going backwards, not forwards," he said.

Programmes to Curb Unemployment in Brunei

There are several programmes being run by government agencies to address the unemployment problem. In addition, there are restrictions on the employment of foreign workers through a quota system for certain jobs such as account clerk, storekeeper, book-keeper, security officer, driver, attendant and watchman.

The programmes are:

Apprenticeship Scheme for Graduates. This programme is financed by the government. Under this scheme, there's a work attachment in a private and public company for six months, after which the trainees can be employed as full-time workers. These trainees are given an allowance of $700 (for degree holders) and $500 (for diploma holders) for the period of six months.

The Skill Training in Skill Industry and ICT. This is a short-term programme for youths with secondary 3-diploma qualifications. This scheme secures the commitment of employers of supermarkets to employ locals on a permanent basis through contract of agreement between employers and employees. The latter are trained as salesmen/salesgirls, cashiers and shop assistants. This initiative has proven to be successful as the locals feel that they have a secure job and improved their welfare where previously no such contract existed.

The Youth Development Programme. This programme provides training for school dropouts and unemployed youths. The two-year programme includes vocational training and personal development and work experience.

Apprenticeship training scheme under the Department of Technical Education. This programme trains school-leavers and the programme includes skills training, on the job work experience and possible employment. With the current rapid changes in technology, an apprenticeship offers an enriched technical education, which provides an excellent base for school-leavers to learn skills in actual situation and at the same time attend classes at a technical education institution.

Business Incubator Programme, The Business School. The programme has been designed to cater Vocational Technical Education and Training (VTET) graduates who have acquired the skills and competencies in various Technical and Vocational fields. Those skills could provide a useful and sound foundation for them to venture into business world and hopefully one day becomes successful young entrepreneurs.

LiveWIRE. Introduced by Brunei Shell Petroleum in 2001, this programme is aimed at helping youths in the 18-30 age group, particularly those without jobs to become successful entrepreneurs. The programme involves two schemes.

The Business School Students at the LiveWIRE Business Awards 2007

Source: Azlan Othman, Borneo Bulletin, Tuesday, 3rd May 2005

Brunei's Economic Structure and Macroeconomic Performance

Brunei Darussalam (372,000 inhabitants) became independent from Great Britain in 1984. As a result of sizeable deposits of oil and gas, the country enjoys a high per capita income (USD 14,903) and is one of the richest in the region. Its population enjoys high subsidies and pays no taxes.

Brunei’s economy is based on the hydrocarbon industry. The country is the third largest oil producer in Southeast Asia and the fourth largest producer of liquefied natural gas (LNG) in the Asia-Pacific region. Hydrocarbon products account for 90% of exports, over 85% of government revenues and nearly 50% of GDP.

Despite all its wealth Brunei’s future is not free of troubles. Oil reserves are expected to run out in 2015 while its gas reserves will last for only 10 years longer. Brunei reduced its oil production (from 240,000 barrels per day to 200,000 b/d) to prevent a premature exhaustion of its oil fields. Therefore GDP growth (2.6% in 2005) was far less vigorous compared to other major oil exporting countries who all benefited from high oil prices.

It is projected that for 2006 and 2007, an even more restricted export policy will somewhat temper economic growth to 2% per year. Next to hydrocarbon products, Brunei’s only other export product of some importance (accounting for some 5% of exports) is timber. Despite the country’s extensive forests, the availability of this natural resource is in the end also finite. Brunei’s main export markets are Japan (38% of all exports), South Korea (14%) and Australia (11%).

The country imports nearly all of its food requirements. A government-owned cattle farm in Australia that is slightly larger than Brunei itself supplies the country’s beef. Additionally, Brunei has to import also nearly all of its machinery and transport equipment. Singapore (33%), Malaysia (21%) and Japan (7%) are Brunei’s main providers for import products.

Though wealthy, Brunei faces the immense problem to build a sustainable non-oil economy. As long as the oil reserves last (at least for another decade), the country has sufficient financial resources to support the government’s policy of heavily subsidising basic and luxury goods. However, investors still remain reluctant to invest in Brunei because of the small local market, its restricted political freedom and its inflexible public sector.

Source: Brunei Economic Report, Economic Research Department, Country Risk Research, March 2006 (RABOBANK)