Brunei’s Strategic Role in Enhancing China-BIMP-EAGA Cooperation

As ASEAN countries become increasingly interlinked economically, East Asian states such as China, Japan and South Korea have assiduously courted these countries with offers of investment, funding and free trade agreements to further strengthen their connections with the region.

Formed in 1994, the Brunei Darussalam, Indonesia, Malaysia, Philippines East ASEAN Growth Area (BIMP-EAGA) has the potential to benefit from these offers. BIMP-EAGA serves as a vital subregional initiative aimed at accelerating socio-economic development in the less developed areas of the Eastern corridors. There are indications that the subregion is gradually gaining significance as its economy has been expanding in recent years. Blessed with natural resources and rich biodiversity in its forests and oceans, BIMP-EAGA possesses abundant resources for renewable energy, which has been driving economic growth for its members. Brunei is uniquely positioned to assert its authority as the only sovereign nation in the subregion promoting the initiative.

Apart from Brunei, the BIMP-EAGA countries include various regional governments: the provinces of Kalimantan, Sulawesi, Maluku, and Papua in Indonesia; the states of Sabah, Sarawak, and the federal territory of Labuan in Malaysia; and the island of Mindanao and the island province of Palawan in the Philippines. BIMP-EAGA focuses on five strategic pillars: connectivity, food production, tourism, environmental sustainability, and socio-cultural and educational initiatives.

Poised for Growth

As the only sovereign government in the subregion, Brunei has positioned itself as the key player in enhancing connectivity to boost the socio-economic aspects of the periphery. Brunei possesses both the potential and motivation to steer the success of BIMP-EAGA, particularly as the country pursues economic diversification outlined in its Vision 2035. There are economic opportunities to link BIMP-EAGA to the Guangxi Economic Corridor in China through the Brunei-Guangxi Economic Corridor (BGEC). For example, the region can contribute to global supply chains with raw materials for finished products. Established in 2014, the BGEC is a flagship project within the Belt and Road Initiative (BRI) that encompasses sectors such as logistics and aquaculture, along with other significant endeavours like the halal food production industry.                            

A landmark outcome of the BGEC has been the formation of the Muara Port Company, a collaborative venture between Darussalam Assets, a government entity in Brunei, and Beibu Gulf Holding Company from Guangxi, China. The primary responsibility of the Muara Port Company is to oversee the operations of Muara Port, the largest harbour in Brunei which handles containerised cargo handling, loading and warehousing. Positioned strategically on the northeastern coast, the Muara Port serves as the primary international trade gateway for Brunei, managing 90 per cent of the country’s import and export trade, excluding oil and gas. The company aims to enhance port efficiency, optimise Brunei’s logistics chain, and ultimately transform the port into a premier global hub. There were plans to expand the handling capacity of Muara port from the current 280,000 twenty-foot equivalent units (TEUs) to 500,000 TEUs, but the expansion has been delayed.

In July 2023, Brunei inaugurated a container shipping route that connects Muara Port with China’s Beibu Gulf Port in the Guangxi Zhuang Autonomous Region. This development represents a significant achievement in promoting trade, enhancing connectivity and creating new market opportunities between Brunei, China and the broader BIMP-EAGA region. The established shipping route is anticipated to expedite the construction of the New International Land-Sea Trade Corridor, facilitating a direct link between ASEAN and the western provinces of China.

While there is a lot of potential in BIMP-EAGA, it has only seen two tangible projects: the Muara-Beibu shipping route and Gallop Air. This could be due to several factors, the primary one being lack of political will in the provinces of Indonesia, Philippines and states in east Malaysia.

China’s growing interest in BIMP-EAGA is evident in a speech by Xi Jinping in late 2020, emphasising the subregion as a key area for China–ASEAN cooperation. The BIMP-EAGA is perceived by China as a strategic partner in its broader regional development agenda, acting as a platform to strengthen collaboration between China and ASEAN. This is underscored by the inclusion of BIMP-EAGA as a pivotal area in China-ASEAN relations, as outlined in the 2019 joint statement on Synergizing the Master Plan on ASEAN Connectivity 2025 and the BRI. His Majesty Sultan Haji Hassanal Bolkiah has welcomed China’s engagement in the subregion by acknowledging the potential role of the BRI in bolstering regional connectivity and augmenting the economic landscape through the framework of BIMP-EAGA. The BIMP-EAGA subregion boasts diverse cultures and pristine beaches and rainforests that can potentially be developed with China’s investment in infrastructure development. Brunei’s strategic positioning and its efforts through the Brunei-Guangxi Economic Corridor (BGEC) provide a platform for fostering collaboration across various sectors such as food security, tourism, environment sustainability and education.

With a majority Muslim population close to 80 per cent, Brunei has the potential to spearhead and develop a halal food supply chain within the corridor to cater to Muslims regionally and globally. The demand for halal products has grown significantly over the past decades. Global spending on such products rose from US$2.29 trillion in 2022 and is forecasted to reach US$3.1 trillion in 2027. Currently, Brunei upholds some of the world’s highest standards in halal food products.

With the establishment of the new Indonesian capital city, the BIMP-EAGA is poised to assume a more significant role in the upcoming decades amidst a rapidly changing geo-strategic landscape.  In 2023, China’s Shaanxi Tianju Investment group, which owns the Brunei-based Gallop Air, signed a deal worth US$2 billion to buy 30 aircraft from the Chinese aircraft manufacturer Commercial Aircraft Corporation of China (COMAC). Gallop Air is poised to make Brunei a regional aviation hub that connects the under-represented and untapped market of the BIMP-EAGA region by providing flights between Kalimantan, cities in China, Southeast Asia and the Southwest Pacific.

While there is a lot of potential in BIMP-EAGA, it has only seen two tangible projects: the Muara-Beibu shipping route and Gallop Air. This could be due to several factors, the primary one being lack of political will in the provinces of Indonesia, Philippines and states in east Malaysia. By leveraging on its strategic position and fostering collaboration across various sectors between China and BIMP-EAGA, Brunei can contribute significantly to realising the shared vision of economic growth, enhanced connectivity, and regional socio-economic development in the subregion.

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