DEVELOPMENT LINKAGES OF BRUNEI DARUSSALAM’S COFFEE AND TEA SECTOR: GLOBAL AND REGIONAL VALUE CHAIN PERSPECTIVES

Abstract

The development of agriculture and agrifood-based products is at the forefront of Brunei Vision 2035, Brunei Darussalam’s most aggressive economic drive to date. One such instance of agri-food production is locally made coffee and tea products, which is taking place in the country despite the limited amounts of domestic raw materials available. The presence of this sector in the market, therefore, warrants further investigation. This case study uses Michael Porter’s Value Chain Analysis (VCA) and Gereffi’s Global–Regional Value Chain (GRVC) theory to analyze Brunei’s coffee and tea Micro, Small, and Medium Enterprises (MSMEs) by mapping and tracing the origins of inputs; identifying local and regional value-adding processes; and pinpointing firms’ strategies towards building their capacities and capabilities. The aim is to establish the competitiveness of this sector against regional and global well-known brands. As such, this paper highlights inter-firm linkages of coffee and tea production in Brunei and positions Brunei’s firms in Shih’s GVC smiling curve, relative to its partners based on levels of value-addedness and functional complexities. While limited to conventional coffee and tea producers, this study provides a starting point in the hybrid use of VCA and GRVC to understand local–regional development linkages that exist in small national economies like Brunei Darussalam which are necessary for firms to remain competitive. It also contributes to policy learning and knowledge enrichment for the government, consumers, and industrialists alike, by highlighting the lessons gained from this sector’s experiences.