The OBG said in its latest report the transport industry is expected to help Brunei diversify its economy.

While the single market and production base envisioned by the AEC has not been fully realised, physical infrastructure and its integrity within each individual country were vital in doing so.

“Developments to cross-border roads, power lines, railway and maritime transport will all be crucial in turning the aspiration into a reality and improvements in these areas will boost new and existing value chains and production networks”, OBG said.

OBG highlighted recent progress in aspects of the country’s transport sector, noting areas such as the road network, strategic waterways, air freight and ports as well as the Temburong Bridge megaproject will be important economic contributors in the upcoming future.

“The extent to which the various transport and logistics related initiatives being pursued by the private sector, the government and Asean as a whole will be a boon to the economy remains to be seen,” OBG said. “However, the government appears to be taking the challenge of transforming the sector into a regional powerhouse seriously, as evidenced by the potential drivers for growth it has created in the last few years.”

OBG said foreign investors and the private sector are also beginning to recognise that the transport and logistics sectors are now ripe for investment.

OBG said the coastal highway backbone that runs eastwards from Kuala Belait in the northwest to Muara Port in the northeast is part of the pan-Borneo transport network connecting Brunei to Malaysia and Indonesia.

OBG said Brunei’s position adjacent to the sea lanes of the South China Sea made 209km of its waterways and 161km of its coastline logistically important.

“Under the Kuala Lumpur Transport Strategic Plan 2016-25, Brunei has agreed to contribute to the establishment of an Asean Single Shipping Market and to promote maritime safety, security and strategic economic corridors within Asean,” OBG said. It also noted that under that strategic plan, Brunei will engage in regional maritime transport cooperation to develop strategic maritime logistics corridors within ASEAN.

OBG said Brunei’s recent efforts for airport modernisation, noting that the move to transform the terminal into a passenger and cargo gateway should be an asset with the roll-out of the Asean Open Skies policy and competition between the region airlines increases.

The open skies policy which came into effect in January 2015 has been ratified by Brunei despite concerns of increased competition to the national carrier Royal Brunei, said the report and will see all airline companies from the 10 member-states of Asean to be able to fly freely from their home country to any city within the bloc.