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Small Enterprise Development and the 'Dutch Disease' in a Small Economy: The Case of Brunei

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  • Heeks, Richard

Abstract

Following hydrocarbon (oil/gas) discoveries and price rises, a number of small developing economies which had been relatively poor found themselves to be relatively wealthy. However, the existence of significant quantities of minerals with strong export potential has generally been seen as a mixed blessing for national development. All of these small economies have thus adopted conscious policies of diversification aimed at increasing the economic contribution of other sectors. Initial diversification strategies focused mainly on the development of large enterprises. More recently, though, these economies have begun to take a greater interest in small enterprises. This has chimed with growing recognition of the potential impact these enterprises can have on factors such as employment and income generation, income distribution, and technical innovation. This paper therefore investigates issues relating to small enterprise development in small, rich economies, choosing the case of Brunei as the main example for discussion. The material presented derives from a research study conducted from 1995 to 1997, including fieldwork and a survey of enterprises in Brunei. Following the introduction, the paper is divided into five main sections. In the first, some of the benefits and costs of a bobming minerals export sector are summarised. In the second, typical responses (in the form of so-called "resource-based industrialisation" and other large-scale initiatives) are investigated; and the need for small enterprise-based diversification is argued. In the third, the state of small enterprise development in Brunei is described. The fourth section analyses the current constraints to the creation and expansion of small firms in Brunei, particularly those constraints that relate to the economic domination of hydrocarbons in a small economy. Finally, conclusions are drawn about the future of small enterprise-based diversification strategies in this small economy.

Suggested Citation

  • Heeks, Richard, 1998. "Small Enterprise Development and the 'Dutch Disease' in a Small Economy: The Case of Brunei," General Discussion Papers 30563, University of Manchester, Institute for Development Policy and Management (IDPM).
    • Handle: RePEc:ags:idpmgd:30563
    DOI: 10.22004/ag.econ.30563
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    References listed on IDEAS

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    1. Mead, Donald C., 1994. "The contribution of small enterprises to employment growth in southern and eastern Africa," World Development, Elsevier, vol. 22(12), pages 1881-1894, December.
    2. Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
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    Cited by:

    1. Bernard Owusu, 2018. "‘Doomed by the ‘Resource Curse?’ Fish and Oil Conflicts in the Western Gulf of Guinea, Ghana," Development, Palgrave Macmillan;Society for International Deveopment, vol. 61(1), pages 149-159, December.
    2. Filippo Bontadini & Maria Savona, 2019. "Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-development Backward Linkages?," SPRU Working Paper Series 2019-15, SPRU - Science Policy Research Unit, University of Sussex Business School.
    3. Bloch, Robin & Owusu, George, 2012. "Linkages in Ghana's gold mining industry: Challenging the enclave thesis," Resources Policy, Elsevier, vol. 37(4), pages 434-442.
    4. Aryee, Benjamin N. A., 2001. "Ghana's mining sector: its contribution to the national economy," Resources Policy, Elsevier, vol. 27(2), pages 61-75, June.
    5. Maria Savona & Filippo Bontadini, 2023. "Revisiting the Natural Resource Curse: Backward Linkages for Export Diversification and Structural Economic Transformation," Development and Change, International Institute of Social Studies, vol. 54(2), pages 378-421, March.
    6. Alssadek, Marwan & Benhin, James, 2021. "Oil boom, exchange rate and sectoral output: An empirical analysis of Dutch disease in oil-rich countries," Resources Policy, Elsevier, vol. 74(C).
    7. Fahad Nasser F. Alarjani & Bilal Anwar & Hassan Danial Aslam & Shahid Iqbal & Arslan Ayub, 2020. "A Moderated Mediation Model of Entrepreneurial Self-Efficacy, Institutional Environment, and Entrepreneurial Orientation for SME Development," SAGE Open, , vol. 10(3), pages 21582440209, July.
    8. Roy Bahl & Bayar Tumennasan, 2002. "How Should Revenues From Natural Resources Be Shared?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0214, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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