Brunei’s government continues to provide subsidies on rice and sugar

In response to the recent World food crisis, the supply of rice and sugar will remain subsided by the Brunei Government. This is a news report from our national Radio and Televisyen Brunei (http://www.rtb.gov.bn/rtbnews/2008/Mei/160508/story_2.html) yesterday 16th May 2008:

The government of His Majesty continues to provide subsidies on rice and sugar, two of the country’s staple food. At the same time, the government is also footing the subsidy bills for another commodity, petrol.

The Director of Information Technology and State Store, Awang Haji Umar Ali bin Haji Abdullah talked of the subsidy on rice in an interview with RTB. According to him, although Brunei relies on rice supplies from overseas, the increased price of the commodity does not affect its imports to the country. He assured that supplies are sufficient. Prices of the three types of rice supplied through the Information Technology and State Store Department and sold in the country remain unchanged and the government has no plan to increase them. The subsidies extended by the government help alleviate the burden faced by consumers in the wake of rising prices of basic necessities, in particular food items.

His Majesty’s Government currently has a long-term agreement with a major rice-producing firm in Thailand, the Chia Meng Company, a joint-venture concern with His Majesty’s Government. Brunei annually imports 33,000 metric tonnes of Homali or Fragrant rice, Thai White Rice and Glutinous rice from Thailand shipped in containers at an average frequency of twice a month. Another commodity heavily-subsidised by the government is sugar. The country imports some five and a half thousand metric tonnes of refined sugar from Thailand each year.

Although not related to food and other items of sustenance, car fuel or petrol can be regarded as a necessity, and which represents yet another commodity heavily subsidised by the government, so much so that in 2006, the government spent some $210 million in fuel costs subsidy, and $153 million just for the first quarter of 2007, thus showing a stiff increase. Clearly the government incurs huge expenditures in subsidies. According to the Economic Planning and Development Department, with the government’s subsidy scheme particularly for rice, sugar, petrol and LPG gas, the issue of price increases can be handled to the point that the consumer’s price index for Brunei Darussalam remained low compared to other countries.