Brunei’s strategic role in promoting China-BIMP-EAGA cooperation

Brunei has the potential to drive economic growth in the eastern part of ASEAN. So far, however, actual gains from BIMP-EAGA have lagged behind its potential.

As ASEAN countries become increasingly economically interconnected, East Asian countries such as China, Japan and South Korea are eager to offer investment, finance and free trade agreements to further strengthen their ties with these countries.

Formed in 1994, the Brunei Darussalam, Indonesia, Malaysia, Philippines East ASEAN Development Area (BIMP-EAGA) has the potential to benefit from these incentives. BIMP-EAGA serves as a key sub-regional initiative aimed at accelerating socio-economic development in the less developed areas of the Eastern Corridors. As its economy has expanded in recent years, there are signs that the sub-region is gradually gaining importance. Blessed with natural resources and rich biodiversity in its forests and oceans, BIMP-EAGA has abundant resources for renewable energy, which drives economic growth for its members. Brunei is uniquely positioned to assert its authority as the only sovereign nation in the sub-region to promote the initiative.

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

Ready for development

BIMP-EAGA diagram. Source: https://bruneibebc.com/about/what-is-bimp-eaga/#google_vignette

As the only sovereign government in the sub-region, Brunei plays a key role in promoting connectivity to enhance the socio-economic aspects of the neighbourhood. Brunei has both the energy and drive to drive BIMP-EAGA’s success, especially as the country pursues economic diversification as outlined in its Vision 2035. There are economic opportunities to link BIMP-EAGA with China’s Guangxi Economic Corridor via Brunei-Guangxi. Economic Corridor (BGEC). For example, the region can contribute to global supply chains with raw materials for finished products. Established in 2014, BGEC is a flagship project in the Belt and Road Initiative (BRI), which includes sectors such as logistics and aquaculture and other significant initiatives such as the Halal food manufacturing industry.

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A major result of BGEC was the creation of Muara Port Company, a joint venture between Brunei-based state-owned Darussalam Assets and Beibu Gulf Holding Company from Guangxi, China. Muara Port Company’s primary responsibility is to oversee the operations of Muara Port, Brunei’s largest port, handling container cargo handling, loading and warehousing. Strategically located on the northeast coast, Muara Port serves as Brunei’s primary international trade gateway, handling 90 percent of the country’s import and export trade, excluding oil and gas. The company aims to improve port efficiency, improve Brunei’s logistics chain and ultimately transform the port into a premier global hub. Muara Port’s handling capacity was planned to be expanded to 500,000 TEUs from the current 280,000 twenty-foot equivalent units (TEUs), but the expansion has been delayed.

In July 2023, Brunei opened a container shipping line connecting Muara Port with China’s Beipu Gulf Port in Guangxi Zhuang Autonomous Region. This development represents a significant achievement in enhancing trade, improving connectivity and creating new market opportunities between Brunei, China and the wider BIMP-EAGA region. The established shipping lane is expected to speed up the construction of a new international land-sea trade route, facilitating a direct link between ASEAN and China’s western provinces.

Although BIMP-EAGA has a lot of potential, it has seen only two concrete projects: the Muara-Beibu shipping line and Gallop Air. This may be due to a number of factors, the primary being lack of political will in states in Indonesia, the Philippines and East Malaysia.

China’s growing interest in BIMP-EAGA was evident in Xi Jinping’s speech in late 2020, emphasizing the sub-region as a key area for China-ASEAN cooperation. BIMP-EAGA is realized by China Strategic partner It serves as a platform for strengthening cooperation between China and ASEAN in its broader regional development agenda. This is underscored by the inclusion of BIMP-EAGA as an important part of China-ASEAN relations, as outlined in the 2019 Joint Declaration on ASEAN Connectivity 2025 and Master Plan Integration on BRI. His Majesty Sultan Haji Hassanal Bolkiah BIMP-EAGA welcomes China’s engagement in the sub-region by recognizing the potential role of BRI in strengthening regional connectivity and increasing economic landscape through the framework. The BIMP-EAGA sub-region has diverse cultures and pristine beaches and rainforests that could be developed with China’s investment in infrastructure development. Brunei’s strategic positioning and its initiatives through the Brunei-Guangxi Economic Corridor (BGEC) provide a platform to foster cooperation in various sectors such as food security, tourism, environmental sustainability and education.

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With a majority Muslim population close to 80 percent, Brunei could develop a halal food supply chain to feed Muslims regionally and globally. The demand for Halal products has increased significantly in the last decades. Global spending on such products rose from USD 2.29 trillion in 2022 and is projected to reach USD 3.1 trillion in 2027. Currently, Brunei maintains the highest standards in the world for halal food products.

With the establishment of the new Indonesian capital, BIMP-EAGA is poised to assume a more significant role in the coming decades amid a rapidly changing geostrategic landscape. In 2023, China’s Shaanxi Tianju Investment Group, which owns Brunei-based Gallop Air, signed a US$2 billion deal to buy 30 aircraft from Chinese aircraft manufacturer Commercial Aircraft Corporation of China (COMAC). Gallop Air is poised to develop Brunei as a regional aviation hub connecting the under-represented and untapped market of the BIMP-EAGA region by offering flights between cities in Kalimantan, China, Southeast Asia and the Southwest Pacific.

Although BIMP-EAGA has a lot of potential, it has seen only two concrete projects: the Muara-Beibu shipping line and Gallop Air. This may be due to a number of factors, the primary being lack of political will in states in Indonesia, the Philippines and East Malaysia. By enhancing its strategic position in various fields between China and BIMP-EAGA, Brunei can make a significant contribution to realize the shared vision of economic growth, enhanced connectivity and regional socio-economic development.

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