Due to its extensive resources of oil and gas and small population, Brunei is among the world’s richer countries. The oil and gas sector dominates the economy and generates the bulk of export earnings and government revenues. Brunei is vulnerable to fluctuations in world prices: the slump in oil prices was largely responsible for negative growth in the 1980s.
The economy and social infrastructure have been developed through a series of national development programmes. During the 1990s, the emphasis was on social services and public utilities. This continued into the 2000s, together with diversification of manufacturing and encouragement of private investment, including foreign investment. Major projects include a gas pipeline, a power plant, upgrade of the international airport, development at the port of Muara, and an industrial park with a methanol plant that began production and exports in mid-2010.
As the regional economic crisis of 1997–98 receded, the government announced plans to encourage fuller private-sector participation in public enterprises to promote foreign investment – including, for the first time, allowing foreigners to own land in Brunei – and for the country to become a regional trade and services centre.
The economy benefited from high global energy prices in the early 2000s, with little inflation. It slowed in 2007 (with a growth rate of 0.2 per cent) and, in the strongly adverse climate of the world economic downturn, shrank in 2008 (–1.9 per cent) and 2009 (–1.8 per cent) before returning to steady growth in 2010–14, when energy prices were buoyant, before they declined sharply in 2014.
The oil and gas sector contributes about two-thirds of GDP and the major part of exports. Average daily oil production in 2013 was 135,000 barrels. Estimates of oil and gas reserves are rising with new offshore discoveries. Reserves of oil were estimated in January 2014 to be 1.1 billion barrels, and of gas, 300 billion cubic metres.