2015 Index of Economic Freedom

Brunei Darussalam

overall score68.9
world rank39
Rule of Law

Property Rights35.0

Freedom From Corruption60.0

Limited Government

Government Spending63.6

Fiscal Freedom87.0

Regulatory Efficiency

Business Freedom68.3

Labor Freedom96.9

Monetary Freedom76.6

Open Markets

Trade Freedom81.8

Investment Freedom70.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.4 million
  • GDP (PPP):
    • $21.7 billion
    • -1.2% growth
    • 0.8% 5-year compound annual growth
    • $53,431 per capita
  • Unemployment:
    • 3.7%
  • Inflation (CPI):
    • 0.4%
  • FDI Inflow:
    • $895.0 million
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Brunei’s economic freedom score is 68.9, making its economy the 39th freest in the 2015 Index. Its overall score is essentially the same as last year’s, with improvements in freedom from corruption, monetary freedom, and labor freedom counterbalanced by declines in property rights, fiscal freedom, and the management of public spending. Brunei is ranked 10th out of 42 countries in the Asia–Pacific region, and its overall score is higher than the regional and world averages.

Brunei was graded in the Index for the first time in 2014 and continues to perform competitively in most aspects of economic freedom. Relatively high market openness facilitates integration into the global economy, particularly in the oil and natural gas sectors. Macroeconomic stability has been a staple of development, which has been supported by a well-developed legal system, secure property rights, and a commitment to investment.

Improving access to private-sector financing remains critical if the government wishes to diversify away from the oil and gas industry. The small financial sector, largely insulated from the global financial crisis, has seen a boom in Islamic finance in recent years. Streamlined investment rules and regulations would improve openness and encourage economic growth.



The Sultan of Brunei is prime minister, minister of defense, and minister of finance. He is advised by several councils, including a Legislative Council and Privy Council, which he appoints. Imposition of a new Sharia Penal Code, which includes harsh penalties (including death) for a variety of offenses, in 2014 generated widespread international criticism. The oil and gas industry, which accounts for over half of GDP and 90 percent of government revenues, funds a sizable welfare state, and most of the population works directly for the government. Brunei has extremely low manufacturing capacity and imports most of its manufactured goods and food. The government is seeking integration into the global economy as a member of the Trans-Pacific Partnership negotiations.

Rule of LawView Methodology

Property Rights 35.0 Create a Graph using this measurement

Freedom From Corruption 60.0 Create a Graph using this measurement

Human rights concerns arose in 2014 as the government began to implement Shari’ah (Islamic) law in Brunei. Protection of private property is weak. Only citizens of Brunei may purchase land; foreign firms must have a local partner. The constitution does not provide for an independent judiciary, and the sultan wields broad powers. No direct legislative elections have been held since 1962.

Limited GovernmentView Methodology

Brunei has no income tax, and the top corporate tax rate is 20 percent for most companies. The corporate tax rate for oil and gas companies is 55 percent. Other taxes include a social security tax. The overall tax burden is equivalent to 30 percent of gross domestic output. Government spending equals around 35 percent of the domestic economy, and public debt is below 3 percent of GDP.

Regulatory EfficiencyView Methodology

Incorporating new businesses takes more than three months, but there is no minimum capital requirement. Licensing requirements consume 17 procedures and 88 days on average. A supply-and-demand imbalance persists in the labor market. The public sector remains the main source of employment. The government provides large price-distorting subsidies for nearly everything the average citizen needs.

Open MarketsView Methodology

Brunei’s average tariff rate is 4.1 percent. Non-tariff barriers are low, but numerous state-owned enterprises affect trade and investment. There is no foreign ownership of land. The government restricts foreign investment in certain sectors of the economy. The small but growing financial sector is dominated by commercial banks, which remain well-capitalized. Despite some progress, the banking sector lacks competition.

Country's Score Over Time

Bar Graph of Brunei Darussalam Economic Freedom Scores Over a Time Period

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Regional Ranking

rank country overall change
1Hong Kong89.6-0.5
3New Zealand82.10.9
7South Korea71.50.3
8Malaysia 70.81.2
10Brunei Darussalam68.9-0.1
12Thailand 62.4-0.9
15Kyrgyz Republic 61.30.2
21Sri Lanka58.6-1.4
25Pakistan 55.60.4
27Bangladesh 53.9-0.2
29Papua New Guinea53.1-0.8
36Solomon Islands470.8
42North Korea1.30.3
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