Have you ever imagined a country without public debt?
In a world filled with budget deficits and mountains of government bonds, Brunei Darussalam stands out as a striking exception.
Sounds impossible, doesn’t it? But it’s true. Brunei is one of the few countries in the world that has virtually no public debt.
Rich in Resources, Smart in Management
According to the latest data from FokusEkonomi and AMRO, Brunei’s debt-to-GDP ratio is only around 2.3%—a remarkably low figure compared to the global average, and even when measured against other ASEAN countries like Malaysia or Thailand, whose ratios exceed 50–60%.
With a population of just around 445,000, Brunei relies heavily on its natural wealth—especially oil and gas—which serves as the main engine of its economy. This sector contributes more than 50% of the country’s GDP and accounts for about 95% of its total exports. An astounding figure for such a small nation.
The massive revenue from energy exports isn’t squandered. Instead, the Bruneian government saves it as fiscal reserves, managed by the Brunei Investment Agency (BIA). These reserves allow the country to fund government operations, development projects, and even economic stimulus programs—without issuing debt.
Brunei’s fiscal strength is further supported by a stable currency—the Brunei Dollar (BND), which has been pegged 1:1 with the Singapore Dollar (SGD) under the Currency Interchangeability Agreement since 1967.
Brunei’s “Zero-Debt” Strategy
Brunei does not issue public government bonds. While other countries borrow to fund their public spending, Brunei simply taps into its “national savings” and uses its foreign reserves. This allows the country to avoid interest payments and fiscal pressure almost entirely.
Even during the COVID‑19 pandemic, Brunei was able to fully cover state expenditures using only internal resources—without incurring new debt. This makes Brunei a rare example of a pragmatic, debt-averse nation.
But Is It Easy to Live Without Debt?
Of course, it’s not that simple. Brunei’s heavy reliance on the oil and gas sector makes it vulnerable to global energy price fluctuations. When oil prices fall, national revenue can take a hit. This is why in recent years, Brunei has experienced economic contractions—even during periods when oil prices rebounded.
However, unlike many other countries that rely on debt to cover shortfalls, Brunei adjusts its spending based on the availability of reserves. This reflects strong fiscal discipline and a conservative approach to budgeting.
Preparing for the Future
Brunei’s government understands that it cannot depend on oil forever. Through initiatives like Brunei Vision 2035 and the Economic Blueprint 2021, it has begun promoting growth in new sectors such as tourism, halal food, information technology, Islamic financial services, and technical and vocational education and training (TVET).
This transformation doesn’t happen overnight. Still, several indicators point to positive results: the non-oil and gas sector has started contributing a larger share to GDP, and economic growth turned positive again in 2023 after a previous decline.
What Are the Pros and Cons?
Brunei’s advantages of having no public debt:
- No burden of interest payments
- Greater fiscal space for stimulus spending
- Long-term economic stability
Challenges it faces:
- High dependence on energy prices
- Risk of depleting reserves if spending is uncontrolled
- Urgent need for economic diversification
A Debt-Free Nation Is Possible—Brunei Proves It
Brunei is living proof that a debt-free economic model can work—if backed by abundant natural resources and wise fiscal governance. But living without debt doesn’t mean living without risk. Long-term resilience still depends on diversification and innovation.
