Brunei Darussalam - Tips

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.


Negara Brunei Darussalam

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.

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.

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.

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.

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

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.

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

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

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.

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.

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

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

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)

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.

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.


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