Brunei Darussalam

 

Bureau of East Asian and Pacific Affairs                                      
May 2007                                                                      
                                                                       
  Background Note: Brunei Darussalam                                          
                                                                       
  Flag of Brunei is yellow with two diagonal bands of white (top) and black   
  starting from the upper hoist side; the national emblem in red is           
  superimposed at the center; the emblem includes a swallow-tailed flag on top
  of a winged column within an upturned crescent above a scroll and flanked by
  two upraised hands.                                                         
                                                                       
  PROFILE                                                                     
                                                                       
  OFFICIAL NAME:                                                              
  Negara Brunei Darussalam                                                    
                                                                       
  Geography                                                                   
  Area: 5,765 sq. km. (2,226 sq. mi.), slightly larger than Delaware.         
  Cities: Capital--Bandar Seri Begawan.                                       
  Terrain: East--flat coastal plain rises to mountains; west--hilly lowland   
  with a few mountain ridges.                                                 
  Climate: Equatorial; high temperatures, humidity, and rainfall.             
                                                                       
  People                                                                      
  Nationality: Noun and adjective--Bruneian(s).                               
  Population (2006 est.): 383,000.                                            
  Annual growth rate: 3.5%.                                                   
  Ethnic groups: Malay, Chinese, other indigenous groups.                     
  Religion: Islam.                                                            
  Languages: Malay, English, Chinese; Iban and other indigenous dialects.     
  Education: Years compulsory--9. Literacy (2006)--94.7%.                     
  Health: Life expectancy (years)--74.4 (men), 77.4 (women) yrs. Infant       
  mortality rate (2006 est.)--12.25/1,000.                                    
                                                                       
  Government                                                                  
  Type: Malay Islamic Monarchy.                                               
  Independence: January 1, 1984.                                              
  Constitution: 1959.                                                         
  Branches: Executive--Sultan is both head of state and Prime Minister,       
  presiding over a fourteen-member cabinet. Legislative--a Legislative Council
  has been reactivated after a 20-year suspension to play an advisory role for
  the Sultan. Judicial (based on Indian penal code and English common law)    
  --magistrate's courts, High Court, Court of Appeals, Judicial Committee of  
  the Privy Council (sits in London).                                         
  Subdivisions: Four districts--Brunei-Muara, Belait, Tutong, and Temburong.  
                                                                       
  Economy                                                                     
  GDP (2006 est.): U.S. $12.582 billion.                                      
  Growth rate (2006 est.): 3.7%.                                              
  Natural resources: Oil and natural gas.                                     
  Trade: Exports--oil, liquefied natural gas, petroleum products, garments.   
  Major markets--Japan, Korea, ASEAN, U.S. Imports--machinery and transport   
  equipment, manufactured goods. Major suppliers--ASEAN, Japan, U.S., EU.     
                                                                       
  PEOPLE                                                                      
  Many cultural and linguistic differences make Brunei Malays distinct from the
  larger Malay populations in nearby Malaysia and Indonesia, even though they 
  are ethnically related and share the Muslim religion.                       
                                                                       
  Brunei has hereditary nobility, carrying the title Pengiran. The Sultan can 
  award to commoners the title Pehin, the equivalent of a life peerage awarded
  in the United Kingdom. The Sultan also can award his subjects the Dato, the 
  equivalent of a knighthood in the United Kingdom, and Datin, the equivalent 
  of damehood.                                                                
                                                                       
  Bruneians adhere to the practice of using complete full names with all      
  titles, including the title Haji (for men) or Hajah (for women) for those who
  have made the Haj pilgrimage to Mecca. Many Brunei Malay women wear the     
  tudong, a traditional head covering. Men wear the songkok, a traditional    
  Malay cap. Men who have completed the Haj can wear a white songkok.         
                                                                       
  The requirements to attain Brunei citizenship include passing tests in Malay
  culture, customs, and language. Stateless permanent residents of Brunei are 
  given International Certificates of Identity, which allow them to travel    
  overseas. The majority of Brunei's Chinese are permanent residents, and many
  are stateless. An amendment to the National Registration and Immigration Act
  of 2002 allowed female Bruneian citizens for the first time to transfer their
  nationality to their children.                                              
                                                                       
  Oil wealth allows the Brunei Government to provide the population with one of
  Asia's finest health care systems. Malaria has been eradicated, and cholera 
  is virtually nonexistent. There are five general hospitals--in Bandar Seri  
  Begawan, Tutong, Kuala Belait, Bangar, and Seria--and there are numerous    
  health clinics throughout the country.                                      
                                                                       
  Education starts with preschool, followed by 6 years of primary education and
  up to 7 years of secondary education. Nine years of education are mandatory.
  Most of Brunei's college students attend universities and other institutions
  abroad, but approximately 3,674 (2005) study at the University of Brunei    
  Darussalam. Opened in 1985, the university has a faculty of more than 300   
  instructors and is located on a sprawling campus overlooking the South China
  Sea.                                                                        
                                                                       
  The official language is Malay, but English is widely understood and used in
  business. Other languages spoken are several Chinese dialects, Iban, and a  
  number of native dialects. Islam is the official religion, but religious    
  freedom is guaranteed under the constitution.                               
                                                                       
  HISTORY                                                                     
  Historians believe there was a forerunner to the present Brunei Sultanate,  
  which the Chinese called Po-ni. Chinese and Arabic records indicate that this
  ancient trading kingdom existed at the mouth of the Brunei River as early as
  the seventh or eighth century A.D. This early kingdom was apparently        
  conquered by the Sumatran Hindu Empire of Srivijaya in the early ninth      
  century, which later controlled northern Borneo and the Philippines. It was 
  subjugated briefly by the Java-based Majapahit Empire but soon regained its 
  independence and once again rose to prominence.                             
                                                                       
  The Brunei Empire had its golden age from the 15th to the 17th centuries,   
  when its control extended over the entire island of Borneo and north into the
  Philippines. Brunei was particularly powerful under the fifth sultan, Bolkiah
  (1473-1521), who was famed for his sea exploits and even briefly captured   
  Manila; and under the ninth sultan, Hassan (1605-19), who fully developed an
  elaborate Royal Court structure, elements of which remain today.            
                                                                       
  After Sultan Hassan, Brunei entered a period of decline due to internal     
  battles over royal succession as well as the rising influences of European  
  colonial powers in the region that, among other things, disrupted traditional
  trading patterns, destroying the economic base of Brunei and many other     
  Southeast Asian sultanates. In 1839, the English adventurer James Brooke    
  arrived in Borneo and helped the Sultan put down a rebellion. As a reward, he
  became governor and later "Rajah" of Sarawak in northwest Borneo and        
  gradually expanded the territory under his control.                         
                                                                       
  Meanwhile, the British North Borneo Company was expanding its control over  
  territory in northeast Borneo. In 1888, Brunei became a protectorate of the 
  British Government, retaining internal independence but with British control
  over external affairs. In 1906, Brunei accepted a further measure of British
  control when executive power was transferred to a British resident, who     
  advised the ruler on all matters except those concerning local custom and   
  religion.                                                                   
                                                                       
  In 1959, a new constitution was written declaring Brunei a self-governing   
  state, while its foreign affairs, security, and defense remained the        
  responsibility of the United Kingdom. An attempt in 1962 to introduce a     
  partially elected legislative body with limited powers was abandoned after  
  the opposition political party, Parti Rakyat Brunei, launched an armed      
  uprising, which the government put down with the help of British forces. In 
  the late 1950s and early 1960s, the government also resisted pressures to   
  join neighboring Sabah and Sarawak in the newly formed Malaysia. The Sultan 
  eventually decided that Brunei would remain an independent state.           
                                                                       
  In 1967, Sultan Omar abdicated in favor of his eldest son, Hassanal Bolkiah,
  who became the 29th ruler. The former Sultan remained as Defense Minister and
  assumed the royal title Seri Begawan. In 1970, the national capital, Brunei 
  Town, was renamed Bandar Seri Begawan in his honor. The Seri Begawan died in
  1986.                                                                       
                                                                       
  On January 4, 1979, Brunei and the United Kingdom signed a new treaty of    
  friendship and cooperation. On January 1, 1984, Brunei Darussalam became a  
  fully independent state.                                                    
                                                                       
  GOVERNMENT AND POLITICAL CONDITIONS                                         
  Under Brunei's 1959 constitution, the Sultan is the head of state with full 
  executive authority, including emergency powers since 1962. The Sultan is   
  assisted and advised by five councils, which he appoints. A Council of      
  Ministers, or cabinet, which currently consists of 14 members (including the
  Sultan himself), assists in the administration of the government. The Sultan
  presides over the cabinet as Prime Minister and also holds the positions of 
  Minister of Defense and Minister of Finance. His son, the Crown Prince,     
  serves as Senior Minister. One of the Sultan's brothers, Prince Mohamed,    
  serves as Minister of Foreign Affairs.                                      
                                                                       
  Brunei's legal system is based on English common law, with an independent   
  judiciary, a body of written common law judgments and statutes, and         
  legislation enacted by the sultan. The local magistrates' courts try most   
  cases. More serious cases go before the High Court, which sits for about 2  
  weeks every few months. Brunei has an arrangement with the United Kingdom   
  whereby United Kingdom judges are appointed as the judges for Brunei's High 
  Court and Court of Appeal. Final appeal can be made to the Judicial Committee
  of the Privy Council in London in civil but not criminal cases. Brunei also 
  has a separate system of Islamic courts that apply Sharia law in family and 
  other matters involving Muslims.                                            
                                                                       
  The Government of Brunei assures continuing public support for the current  
  form of government by providing economic benefits such as subsidized food,  
  fuel, and housing; free education and medical care; and low-interest loans  
  for government employees. The Sultan said in a 1989 interview that he       
  intended to proceed, with prudence, to establish more liberal institutions in
  the country and that he would reintroduce elections and a legislature when he
  "[could] see evidence of a genuine interest in politics on the part of a    
  responsible majority of Bruneians." In 1994, a constitutional review        
  committee submitted its findings to the Sultan, but these have not been made
  public. In 2004 the Sultan re-introduced an appointed Legislative Council   
  with minimal powers. Five of the 31 seats on the Council are indirectly     
  elected by village leaders.                                                 
                                                                       
  Brunei's economy is almost totally supported by exports of crude oil and    
  natural gas. The government uses its earnings in part to build up its foreign
  reserves, which at one time reportedly reached more than $30 billion. The   
  country's wealth, coupled with its membership in the United Nations,        
  Association of Southeast Asian Nations (ASEAN), the Asia Pacific Economic   
  Cooperation (APEC) forum, and the Organization of the Islamic Conference give
  it an influence in the world disproportionate to its size.                  
                                                                       
  Principal Government Officials                                              
  Sultan and Yang di-Pertuan, Prime Minister, Minister of Defense, and Minister
  of Finance--His Majesty Sultan Hassanal Bolkiah                             
  Senior Minister--His Royal Highness Crown Prince Billah                     
  Minister of Foreign Affairs--His Royal Highness Prince Mohamed Bolkiah      
  Ambassador to the United States--Pengiran Anak Dato Haji Puteh              
  Ambassador to the United Nations--Dr. Haji Emran bin Bahar                  
                                                                       
  Brunei Darussalam maintains an embassy in the United States at 3520         
  International Court, NW, Washington, DC 20008; tel. 202-237-1838.           
                                                                       
  ECONOMY                                                                     
  Brunei's economy has enjoyed moderate growth in the mid-2000s, primarily due
  to high world oil and gas prices. At 3.7% GDP growth in 2006, Brunei had the
  lowest rate of any ASEAN member nation. Weak oil prices, the East Asian     
  financial crisis, and the collapse of the Amedeo Development Corporation all
  contributed to very low growth rates in the late 1990s and early 2000s.     
                                                                       
  Brunei is the fourth-largest oil producer in Southeast Asia, averaging about
  219,000 barrels a day in 2006. It also is the ninth-largest exporter of     
  liquefied natural gas in the world. Like many oil producing countries,      
  Brunei's economy has followed the swings of the world oil market. Economic  
  growth has averaged around 2.8% in the 2000s, heavily dependent on oil and  
  gas production. Oil production has averaged around 200,000 barrels a day    
  during the 2000s, while liquefied natural gas output has been slightly under
  or over 1,000 trillion btu/day over the same period. Brunei is estimated to 
  have oil reserves expected to last 25 years, and enough natural gas reserves
  to last 40 years.                                                           
                                                                       
  Brunei Shell Petroleum (BSP), a joint venture owned in equal shares by the  
  Brunei Government and the Royal Dutch/Shell group of companies, is the chief
  oil and gas production company in Brunei. It also operates the country's only
  refinery. BSP and four sister companies--including the liquefied natural gas
  producing firm BLNG--constitute the largest employer in Brunei after the    
  government. BSP's small refinery has a distillation capacity of 10,000      
  barrels per day. This satisfies domestic demand for most petroleum products.
                                                                       
  The French oil company Total (then known as ELF Aquitaine) became active in 
  petroleum exploration in Brunei in the 1980s. The joint venture Total E&P   
  Borneo BV currently produces approximately 35,000 barrels per day and 13% of
  Brunei's natural gas.                                                       
                                                                       
  In 2003, Malaysia disputed Brunei-awarded oil exploration concessions for   
  offshore blocks J and K (Total and Shell respectively), which led to the    
  Brunei licensees ceasing exploration activities. Negotiations between the two
  countries are continuing in order to resolve the conflict. In 2006, Brunei  
  awarded two on-shore blocks--one to a Canadian-led and the other to a       
  Chinese-led consortium. Australia, Indonesia, and Korea were the largest    
  customers for Brunei's oil exports, taking over 67% of Brunei's total crude 
  exports. Traditional customers Japan, the U.S., and China each took around 5%
  of total crude exports.                                                     
                                                                       
  Almost all of Brunei's natural gas is liquefied at Brunei Shell's Liquefied 
  Natural Gas (LNG) plant, which opened in 1972 and is one of the largest LNG 
  plants in the world. Some 90% of Brunei's LNG produced is sold to Japan under
  a long-term agreement renewed in 1993. The agreement calls for Brunei to    
  provide over 5 million tons of LNG per year to three Japanese utilities,    
  namely to TEPCo, Tokyo Electric Power Co. (J.TER or 5001), Tokyo Gas Co.    
  (J.TYG or 9531) and Osaka Gas Co. (J.OSG or 9532). The Japanese company,    
  Mitsubishi, is a joint venture partner with Shell and the Brunei Government 
  in Brunei LNG, Brunei Coldgas, and Brunei Shell Tankers, which together     
  produce the LNG and supply it to Japan. Since 1995, Brunei has supplied more
  than 700,000 tons of LNG to the Korea Gas Corporation (KOGAS) as well. In   
  1999, Brunei's natural gas production reached 90 cargoes per day. A small   
  amount of natural gas is used for domestic power generation. Since 2001,    
  Japan remains the dominant export market for natural gas. Brunei is the     
  fourth-largest exporter of LNG in the Asia-Pacific region behind Indonesia, 
  Malaysia, and Australia.                                                    
                                                                       
  The government sought in the past decade to diversify the economy with      
  limited success. Oil and gas and government spending still account for most 
  of Brunei's economic activity. Brunei's non-petroleum industries include    
  agriculture, forestry, fishing, aquaculture, and banking. The               
  garment-for-export industry has been shrinking since the U.S. eliminated its
  garment quota system at the end of 2004. The Brunei Economic Development    
  Board announced plans in 2003 to use proven gas reserves to establish       
  downstream industrial projects. The government plans to build a power plant 
  in the Sungai Liang region to power a proposed aluminum smelting plant that 
  will depend on foreign investors. A second major project depending on foreign
  investment is in the planning stage: a giant container hub at the Muara Port
  facilities.                                                                 
                                                                       
  The government regulates the immigration of foreign labor out of concern it 
  might disrupt Brunei's society. Work permits for foreigners are issued only 
  for short periods and must be continually renewed. Despite these            
  restrictions, the estimated 100,000 foreign temporary residents of Brunei   
  make up a significant portion of the work force. The government reported a  
  total work force of 180,400 in 2006, with a derived unemployment rate of    
  4.0%.                                                                       
                                                                       
  Oil and natural gas account for almost all exports. Since only a few products
  other than petroleum are produced locally, a wide variety of items must be  
  imported. Nonetheless, Brunei has had a significant trade surplus in the    
  2000s. Official statistics show Singapore, Malaysia, Japan, the U.S., and the
  U.K. as the leading importers in 2005. The United States was the            
  third-largest supplier of imports to Brunei in 2005.                        
                                                                       
  Brunei's substantial foreign reserves are managed by the Brunei Investment  
  Agency (BIA), an arm of the Ministry of Finance. BIA's guiding principle is 
  to increase the real value of Brunei's foreign reserves while pursuing a    
  diverse investment strategy, with holdings in the United States, Japan,     
  Western Europe, and the Association of Southeast Asian Nations (ASEAN)      
  countries.                                                                  
                                                                       
  The Brunei Government encourages more foreign investment. New enterprises   
  that meet certain criteria can receive pioneer status, exempting profits from
  income tax for up to 5 years, depending on the amount of capital invested.  
  The normal corporate income tax rate is 30%. There is no personal income tax
  or capital gains tax.                                                       
                                                                       
  One of the government's priorities is to encourage the development of Brunei
  Malays as leaders of industry and commerce. There are no specific           
  restrictions of foreign equity ownership, but local participation, both     
  shared capital and management, is encouraged. Such participation helps when 
  tendering for contracts with the government or Brunei Shell Petroleum.      
                                                                       
  Companies in Brunei must either be incorporated locally or registered as a  
  branch of a foreign company and must be registered with the Registrar of    
  Companies. Public companies must have a minimum of seven shareholders.      
  Private companies must have a minimum of two but not more than 50           
  shareholders. At least half of the directors in a company must be residents 
  of Brunei.                                                                  
                                                                       
  The government owns a cattle farm in Australia through which the country's  
  beef supplies are processed. At 2,262 square miles, this ranch is larger than
  Brunei itself. Eggs and chickens are largely produced locally, but most of  
  Brunei's other food needs must be imported. Agriculture, aquaculture, and   
  fisheries are among the industrial sectors that the government has selected 
  for highest priority in its efforts to diversify the economy.               
                                                                       
  Recently the government has announced plans for Brunei to become an         
  international offshore financial center as well as a center for Islamic     
  banking. Brunei is keen on the development of small and medium enterprises  
  and also is investigating the possibility of establishing a "cyber park" to 
  develop an information technology industry. Brunei has also promoted        
  ecotourism to take advantage of the over 70% of Brunei's territory that     
  remains primal tropical rainforest.                                         
                                                                       
  DEFENSE                                                                     
  The Sultan is both Minister of Defense and Supreme Commander of the Armed   
  Forces (RBAF). All infantry, navy, and air combat units are made up of      
  volunteers. There are two infantry battalions equipped with armored         
  reconnaissance vehicles and armored personnel carriers and supported by     
  Rapier air defense missiles and a flotilla of coastal patrol vessels armed  
  with surface-to-surface missiles. Brunei has ordered, but not yet taken     
  possession of, three offshore patrol vessels from the U.K.