Brunei faces growing economic headwinds

Significance

Sultan Hassanal Bolkiah, one of the world’s few remaining absolute monarchs, faces a tough challenge to turn around the pandemic-hit economy. Brunei is struggling to make up for declining oil and gas production, long its main source of revenue.

Impacts

• Moves to expand the petrochemical sector will progress slowly.
• Brunei, a rival claimant to China in the South China Sea, will not pressure Beijing over Chinese assertiveness in those waters.
• Substantial changes are unlikely in any aspect of policy.