Country Facts, 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.


Country Facts, Brunei Darussalam