Is capitalism the answer to Brunei’s economic woes?

Reading Time: 3 minutes

brunei-mosque1With Brunei posting a dismal GDP growth of 1.5 per cent in 2012, it is often easy to point fingers at the government authorities for their incompetence. But whatever the consequences, people are not so much affected by this number or even care for it as would global investors, all largely thanks to the “shock absorber” oil and gas.

Believe it or not, GDP growth measures a country’s resilience on the world stage. The higher the figure, the higher the chance that Brunei attracts foreign direct investments that could potentially amount to millions of dollars to help spur job opportunities and economic growth. But until Brunei attains such growth, only a few investors will be willing to put their money here.

What could be the answer to Brunei’s economic woes?

Capitalism. This is a system whose values are based upon the rights of the individual and his property. A system that promotes competition and rewards talent in a marketplace; one which is largely determined by what Adam Smith calls the ‘invisible hand’. Subject to Schumpeter’s “creative destruction”, it is truly a force that needs reckoning especially for Bruneians.

As idealistic a definition this may seem, capitalism is the enabler to great wealth for nations. The system whereupon entrepreneurs could drive their initiatives in an economy without extensive external intervention, whilst steering it towards progress under a design they see fit.

In capitalism too, the individual has a lens geared towards capital accumulation and free trade. Granted autonomy, he is left to fend for himself subject to his abilities and resources which he has at his disposal to render useful services in the marketplace. Whatever the end results may be, unlike the public sector, the individual is ultimately responsible for himself and his enterprise.

Personal initiative under an aura of autonomy will ultimately push forward progress.

Take it from Adam Smith who in the Wealth of Nations said that “The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principal, that it is alone, and without any assistance… capable of carrying on the society to wealth and prosperity.”

He concluded that to enhance the wealth of a nation, every man, consistent with the law, should be “free to pursue his own interest his own way”

However, the authorities here in Brunei Darussalam are too conservative to accept individual autonomy, competition and risk-taking; all wholly tenants of capitalism. The ex-Chairman of the US Federal Reserve, Alan Greenspan, wisely summed this up in his book “The Age of Turbulence”:

“First, competition and risk-taking causes stress, which most people want to avoid; second, many feel deep-seated ambivalence toward the accumulation of wealth… The pursuit of wealth has been deemed unethical, if not immoral, since long before the emergence of the welfare state.”

The Brunei government reflects this attitude with its abrasive stance on foreign companies and individual initiative, which – while well-intentioned to protect the locals from ‘globalisation’ – flanks itself with layers after layers of paperwork that made Brunei one of the most inefficient countries to open a business. As of now it ranks at a disheartening 135th spot.

For instance, to hold a concert in Brunei, an organiser needs to get governmental permission to set it up. This is totally unnecessary and time-consuming compared to other countries who gave greater autonomy to the private individual to conduct whatever it is he or she intends to organise. This form of over-regulation pervades the people living in Brunei.

And we are talking about modernising our economy.

Regardless of Brunei’s shortfall in capitalistic tendencies, I believe the nation can still succeed in its quest for development; or more specifically its GDP growth. By introducing to its intellectuals the ideals of commercialisation and individual autonomy through entrepreneurship and capitalistic literature, an advent of growth could be soon felt in the offing.

With its realisation, I can imagine flocks of investors scrambling to invest in Brunei’s future within the global economy. With them having a stake here, they would then be more willing to extend their resources to us, thus contributing to an economic uplift unprecedented to any rate known to Brunei before this.

Capitalism is key for Brunei’s future; so read about it, discuss about it, apply it.

Recommended literatures

Ayn Rand, Capitalism: The Unknown Ideal

Alan Greenspan, Age of Turbulence

Milton Friedman, Capitalism and Freedom and Freedom to Choose

Joseph Stilgitz, Globalization and its Discontent

Thomas Friedman, The World is Flat

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Reading Time: 3 minutes

With Brunei posting a dismal GDP growth of 1.5 per cent in 2012, it is often easy to point fingers at the government authorities for their incompetence. But whatever the consequences, people are not so much affected by this number or even care for it as would global investors, all largely thanks to the “shock absorber” oil and gas.

Reading Time: 3 minutes

brunei-mosque1With Brunei posting a dismal GDP growth of 1.5 per cent in 2012, it is often easy to point fingers at the government authorities for their incompetence. But whatever the consequences, people are not so much affected by this number or even care for it as would global investors, all largely thanks to the “shock absorber” oil and gas.

Believe it or not, GDP growth measures a country’s resilience on the world stage. The higher the figure, the higher the chance that Brunei attracts foreign direct investments that could potentially amount to millions of dollars to help spur job opportunities and economic growth. But until Brunei attains such growth, only a few investors will be willing to put their money here.

What could be the answer to Brunei’s economic woes?

Capitalism. This is a system whose values are based upon the rights of the individual and his property. A system that promotes competition and rewards talent in a marketplace; one which is largely determined by what Adam Smith calls the ‘invisible hand’. Subject to Schumpeter’s “creative destruction”, it is truly a force that needs reckoning especially for Bruneians.

As idealistic a definition this may seem, capitalism is the enabler to great wealth for nations. The system whereupon entrepreneurs could drive their initiatives in an economy without extensive external intervention, whilst steering it towards progress under a design they see fit.

In capitalism too, the individual has a lens geared towards capital accumulation and free trade. Granted autonomy, he is left to fend for himself subject to his abilities and resources which he has at his disposal to render useful services in the marketplace. Whatever the end results may be, unlike the public sector, the individual is ultimately responsible for himself and his enterprise.

Personal initiative under an aura of autonomy will ultimately push forward progress.

Take it from Adam Smith who in the Wealth of Nations said that “The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principal, that it is alone, and without any assistance… capable of carrying on the society to wealth and prosperity.”

He concluded that to enhance the wealth of a nation, every man, consistent with the law, should be “free to pursue his own interest his own way”

However, the authorities here in Brunei Darussalam are too conservative to accept individual autonomy, competition and risk-taking; all wholly tenants of capitalism. The ex-Chairman of the US Federal Reserve, Alan Greenspan, wisely summed this up in his book “The Age of Turbulence”:

“First, competition and risk-taking causes stress, which most people want to avoid; second, many feel deep-seated ambivalence toward the accumulation of wealth… The pursuit of wealth has been deemed unethical, if not immoral, since long before the emergence of the welfare state.”

The Brunei government reflects this attitude with its abrasive stance on foreign companies and individual initiative, which – while well-intentioned to protect the locals from ‘globalisation’ – flanks itself with layers after layers of paperwork that made Brunei one of the most inefficient countries to open a business. As of now it ranks at a disheartening 135th spot.

For instance, to hold a concert in Brunei, an organiser needs to get governmental permission to set it up. This is totally unnecessary and time-consuming compared to other countries who gave greater autonomy to the private individual to conduct whatever it is he or she intends to organise. This form of over-regulation pervades the people living in Brunei.

And we are talking about modernising our economy.

Regardless of Brunei’s shortfall in capitalistic tendencies, I believe the nation can still succeed in its quest for development; or more specifically its GDP growth. By introducing to its intellectuals the ideals of commercialisation and individual autonomy through entrepreneurship and capitalistic literature, an advent of growth could be soon felt in the offing.

With its realisation, I can imagine flocks of investors scrambling to invest in Brunei’s future within the global economy. With them having a stake here, they would then be more willing to extend their resources to us, thus contributing to an economic uplift unprecedented to any rate known to Brunei before this.

Capitalism is key for Brunei’s future; so read about it, discuss about it, apply it.

Recommended literatures

Ayn Rand, Capitalism: The Unknown Ideal

Alan Greenspan, Age of Turbulence

Milton Friedman, Capitalism and Freedom and Freedom to Choose

Joseph Stilgitz, Globalization and its Discontent

Thomas Friedman, The World is Flat

Do you like this post?
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