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Cablegate: Brunei Textile Bust May Be Leveling Off

VZCZCXRO7546
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBD #0304 2850133
ZNR UUUUU ZZH
R 120133Z OCT 07
FM AMEMBASSY BANDAR SERI BEGAWAN
TO RUEHC/SECSTATE WASHDC 3983
INFO RUCPDOC/USDOC WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS BANDAR SERI BEGAWAN 000304

SIPDIS

SENSTIVE
SIPDIS

STATE FOR EEB/TPP/ABT (GACLEMENTS)
STATE PASS USTR FOR CAROYL MILLER, BARBARA WEISEL
USDOC FOR COMMERCE/ITA/OTEXA/MARIA D'ANDREA

E.O. 12958: N/A
TAGS: ECON ETRD KTEX BX
SUBJECT: BRUNEI TEXTILE BUST MAY BE LEVELING OFF

REF: A) STATE 114799 B) 06 BANDAR SERI BEGAWAN 501

1. (U) Continuing the trend reported in ref B, Brunei's
textile/apparel industry has declined significantly since the
expiration of global quotas in January 2005. The number of
textile/apparel manufacturing companies has been reduced to just a
handful. Total textile exports in 2006 were just over USD 80
million, less than half of the 2005 total.

2. (SBU) Government industrial promotion agency sources believe that
the textile industry may have bottomed out in early 2007 and could
stabilize at current production levels. They cite the difficulties
of doing business in countries like Burma, and the political
stability of Brunei as driving a limited return of some sewing
operations to Brunei.

3. (SBU) Oil and natural gas production is and will remain Brunei's
main industry and primary source of export revenue. Although the
GoB is attempting economic diversification initiatives in areas such
as halal food production, aquaculture and light industry, there have
been few success stories outside of the short-lived textile boom.
These successes will be few and far between as long as the GoB
decision-making process to allow and/or support new industrial
projects remains slow and top-down driven.

4. (U) In response to ref A, post provides Government of Brunei's
statistics for 2006, and first quarter 2007 where available. All
statistics are converted at an average exchange rate of US$1 =
B$1.54.


Total industrial production
---------------------------
2006 - USD8.7 billion
Jan-Mar 2007 - USD 1.68 billion

Total textiles and apparel production
-------------------------------------
2006 - USD80.52 million

Textile/apparel share of host country imports and exports (2006)
--------------------------------------------- ----
Textile/apparel share of imports 5.37%
Textile/apparel share of exports 1.73%

Exports in textiles and apparel to the U.S. (2006)
--------------------------------------------- -----
USD98.11 million

Total manufacturing employment
------------------------------
28, 392 (2005 Labor statistics)

Total textiles and total apparel employment
-------------------------------------------
18,508 (2005 Labor statistics - Manufacturing, mining & quarrying
category)


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