Businesses struggle as economic downturn bites
BANDAR SERI BEGAWAN
Businesses in Brunei are feeling the pinch from sharply lower earnings as the slowing economy hurts sales.
During the 12th Legislative Council session, the second minister of finance projected Brunei’s fiscal deficit to hit nearly $4 billion for the 2016/2017 fiscal year as low energy prices continue to weigh on the sultanate’s oil and gas-based economy.
In an effort to combat the economic decline, Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abdul Rahman Hj Ibrahim urged both the private and public sector to minimise wastage and avoid unnecessary spending.
But that won’t improve conditions much for Yusuf Khan, manager of Khan Carpet, who said his company’s revenue from selling imported carpets and wallpaper began dwindling five or six months ago.
The Pakistani national has lived in Brunei for 21 years running his father’s business seven days a week. He said he only sees, at most, two customers per day coming into his shop, sometimes not even buying anything.
“Business has been very, very slow. On average, I’ve been making about $300 per day amounting to around $9,000 per month,” he said.
“After paying the (water and electricity) bills, workers’ salaries and rent for both outlets, I’m left with a net profit of $2,000,” he said.
He said before sales began declining, he could earn up to $150,000 per month as customers would spend around $5,000 per day when they came to his shop.
Aminah Arabain, sales manager of department store Syarikat Usaha Hj Jait Abdullah dan Anak-Anak, said she’s also been struggling to make sales.
“We’ve been forced to pay our suppliers in instalments as consumer spending has slowed a lot,” she said.
She said profits were better in 2014 when she used to earn roughly $1,000 per day and around $900 per day in 2015.
This year, it’s been difficult to even reach $500 per day, she said, attributing it to people cutting back on spending after realising the country’s financial situation.
Sales executive Elinda Oktviani of Myha Boutique in Gadong shared a similar experience.
“Usually we get most of our sales when it’s nearing payday. This month is the lowest we’ve earned compared with the previous months.
“In January, we earned $1,500 which dropped to $1,100 in February and to only $700 this month,” said Elinda, who sells dresses and accessories.
She added that the reason was due to people focusing their spending on more essential things.
“We’ve even brought in new arrivals, yet things still haven’t improved,” she said.
Abdul Hamid Ahmad Ali, a sales executive of Karim Carpet located in The Mall, said despite the busy area around Gadong, “sales have never been this bad”.
“It doesn’t get any busier than this (place). But people just aren’t coming in (the shop) to make purchases anymore,” he said, dispelling the popular belief that increased traffic means increasing sales.
“In 2010, people used to buy 30 units of our wall clocks per day. Can you imagine that? Now we can barely make a sale on the clocks let alone the (more expensive) carpets,” he said, adding that in 2016, the times close to payday compared to other times “have all been the same”.
He said some of his friends selling handbags have recently resorted to closing their outlets as they were unable to sustain them due to the drop in items sold.
Meanwhile, Hj Reimi Rosli, who works in the public sector, said he’s been saving to venture into business.
“Nowadays, a lot of people have been buying head scarves overseas in order to resell them here to try and make a profit, so I’m also planning to do that,” he said, adding that he is trying to also save for the plane trip to Indonesia.
“With the hiring freezes in the country and people being laid off, you never know what’s going to happen,” he said.
He said this generation isn’t like the previous one that had the “go to government after graduation mindset”, but a generation that will start establishing their own businesses.
“There’s no choice for the new generation. There are no jobs for them in the country, and unemployment is steadily rising,” he said.
Fikry Hamdan, who is employed in the public sector, said his company has been employing him through a yearly contract and saw this as an “unstable job”.
He said he’s worried that the government won’t resume his contract so he opted for other methods of income.
“I want to go into the agriculture business, as Brunei lacks it,” he said, adding that he wants to try and grow spinach as the market price for it is “very good”. “My mother is alone now, as my father passed away. I’m desperate to start something, so I’ve been saving 60 per cent of my current pay.”
The Brunei Times