Background Notes: Brunei, October 1998
Released by the Bureau of East Asian and Pacific Affairs
U.S. Department of State
OFFICIAL NAME: Brunei Darussalam
Area: 5,769 sq. km. (2,227 sq. mi.), slightly larger than
Cities: Capital--Bandar Seri Begawan.
Terrain: East--flat coastal plains with beaches; west--hilly with
a few mountain ridges.
Climate: Equatorial; high temperatures, humidity, and rainfall.
Nationality: Noun and adjective--Bruneian(s).
Population (1998 est.): 320,000.
Annual growth rate: 2.5%.
Ethnic groups: Malay, Chinese, other indigenous.
Languages: Malay, English, Chinese; Iban and other indigenous
Education: Years compulsory--9. Literacy--90%. (1996)
Health: Life expectancy--74 years. Infant mortality rate(1996)--
Independence: January 1, 1984.
Branches: Executive--Sultan is both head of state and prime
minister, presiding over an 11-member cabinet. 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
GDP (1997): $4.9 billion.
Natural resources: Oil and natural gas.
Trade: Exports--oil, liquefied natural gas, petroleum products,
Major markets--Japan, U.S., Korea Imports--machinery and
transport equipment,manufactured goods. Major suppliers--
Singapore, Japan, Malaysia, U.S.
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
Brunei has a hereditary nobility with 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 a damehood.
Bruneians adhere to the practice of using complete full names
with all titles, including the title Haji (for men) or Hajjah
(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 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.
Oil wealth allows the Brunei Government to provide the population
with one of Asia's finest health care systems free of charge. The
Brunei Medical and Health Department introduced the region's
first government "flying doctor service" in early 1965. Malaria
has been eradicated, and cholera is virtually non-existent. There
is one general hospital in Bandar Seri Begawan and another in
Education starts at Malay preschools and may end after 9 years of
elementary school. Most of Brunei's college students attend
universities and other institutions abroad, but more than 900
study at the University of Brunei Darussalam. Opened in 1985, the
university has a faculty of 169 instructors and is located in
temporary quarters in Bandar Seri Begawan.
The official language is Malay, but English is widely understood
and used in business. Other languages spoken are Chinese, 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 empire of Srivijaya in the early ninth century and 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.
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 Asia
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
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, Partai 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. An 11-member Council of Ministers, or cabinet,
assists in the administration of the government. The Sultan
presides over the cabinet as prime minister and also holds the
position of minister of defense. One of the Sultan's brothers
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. Most cases are
tried by the local magistrate's courts. More serious cases go
before the High Court, which sits for about 2 weeks every few
months. Brunei has an arrangement with Hong Kong whereby Hong
Kong 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
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 intends to proceed,
with prudence, to establish more liberal institutions in the
country and that he will reintroduce elections and a legislature
when he "can 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.
A tiny country with enormous oil and gas reserves--the economy is
almost totally supported by exports of crude oil and natural gas-
-Brunei's financial reserves are reportedly more than $30
billion. The country's wealth, coupled with its membership in the
Association of Southeast Asian Nations (ASEAN), give it 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
Minister of Foreign Affairs--His Royal Highness Prince Mohamed
Ambassador to the United States--Pengiran Anak Dato Haji Puteh
Ambassador to the UN--Pengiran Maidin Hashim
Brunei Darussalam maintains an embassy in the United States at
2600 Virginia Ave., NW, Washington, DC 20037; tel. 202-342-0159.
The ongoing region-wide Asian financial crisis, which began in
1997, has created uncertainty and instability in Brunei's
Brunei's gross domestic product (GDP) soared with the petroleum
price increases of the 1970s to a peak of $5.7 billion in 1980.
It declined slightly in each of the next 5 years, then fell by
almost 30% in 1986. This drop was caused by a combination of
sharply lower petroleum prices in world markets and voluntary
production cuts in Brunei. The GDP has recovered somewhat since
1986, growing by 12% in 1987, 1% in 1988, and 9% in 1989. However
the 1997 GDP was still only about $4.5 billion, well below the
In the 1970s, Brunei invested sharply increasing revenues from
petroleum exports and maintained government spending at a low and
constant rate. Consequently, accumulated foreign reserves now are
estimated at $30 billion. These reserves and the interest income
are saved for future generations and generally excluded from
revenues available for current expenditures.
Since 1986, however, petroleum revenues have decreased, and
government spending has increased. By 1989, available government
revenues barely were sufficient to cover expenditures, and the
government has been running a budget deficit since 1988. The
disappearance of the revenue surplus has made Brunei's economy
more vulnerable to petroleum price fluctuations.
Brunei Shell Petroleum (BSP), a joint venture owned in equal
shares by the Brunei Government and the Royal Dutch/Shell group
of companies, is currently the only oil and gas production
company in Brunei. It also operates the country's only refinery.
BSP and four sister companies constitute the largest employer in
Brunei after the government. BSP also operates a small refinery
with a distillation capacity of 10,000 barrels per day. This
satisfies domestic demand for most petroleum products.
A second joint venture, between the locally owned company Jasra
International Petroleum and the French oil company ELF Aquitaine,
became active in petroleum exploration in Brunei in the 1980s.
The Jasra Elf Joint Venture, known as Jasra-Elf, has discovered
commercially exploitable quantities of oil and gas in three of
the four wells drilled since 1987, including a particularly
promising discovery announced in early 1990.
Brunei's oil production peaked in 1979 at over 240,000 barrels
per day. Since then it has been deliberately cut back, to extend
the life of oil reserves and improve recovery rates. Petroleum
production is currently over 160,000 barrels per day. Japan has
traditionally been the main customer for Brunei's oil exports,
but its share dropped from 45% of the total in 1982 to 26% in
1997. In contrast, oil exports to South Korea increased from only
8% of the total in 1982 to 28%. Other major customers include
Taiwan (4%), New Zealand (3%) and the countries of ASEAN (39%).
Brunei's oil exports to the United States accounted for 23% of
the total in 1982 but have since dropped to negligible amounts.
Almost all of Brunei's natural gas is liquefied at Brunei Shell's
Liquefied Nitrogen Gas (LNG) plant, which opened in 1972 and is
one of the largest LNG plants in the world. Over 82% 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. 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 approximately 700,000 tons of LNG
to the Korea Gas Corporation as well. In 1997, Brunei's natural
gas production reached 31 million cubic meters per day. A small
amount of natural gas is used for domestic power generation.
Brunei is the fourth-largest exporter of LNG, after Indonesia,
Algeria, and Malaysia.
Brunei's oil reserves are sufficient for at least 30 more years,
and gas reserves are sufficient for at least 40 more years at
current production rates.
Over the years, the government has undertaken a succession of 5-
year national development plans. The stated aim under the 1996-
2000 plan is "balanced socio-economic development," specifically
focusing on economic diversification and sustained growth. The
plan allocates almost USD4.4 billion for such development over
the 5-year period. Emphasis on the need for economic
diversification began in January 1989, with the formation of a
new Ministry of Industry and Primary Resources, tasked with
developing a strong, export-led private sector.
Labor shortages in almost all job categories constrain Brunei's
industrial development. The government regulates the immigration
of foreign labor for fear it might disrupt Brunei's society. Work
permits for foreigners are issued only for short periods and must
be continually renewed. Despite these restriction, foreigners
make up about one-third of the work force.
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. Brunei statistics show
Singapore as the largest point of origin of imports, accounting
for 25% in 1997. However, this figure includes some
transshipments, since most of Brunei's imports transit Singapore.
Japan and Malaysia were the second-largest suppliers in 1997,
with an 11% share each. As in many other countries, Japanese
products dominate local markets for motor vehicles, construction
equipment, electronic goods, and household appliances. The United
States was the fourth-largest supplier of imports to Brunei in
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 South East Asian Nations (ASEAN) countries. A
clear separation is maintained between the financial assets of
the government, managed by BIA, and those of the Sultan and the
The Brunei Government actively encourages more foreign
investment. New enterprises which 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 most important 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
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 which supplies
most of the country's beef. 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 and fisheries are among the industrial sectors which
the government has selected for highest priority in its efforts
to diversify the economy.
The Sultan is both Minister of Defense and Supreme Commander of
the Armed Forces (RBAF). All infantry, naval, and air combat
units are made up of volunteers. There are two infantry brigades,
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 a defense agreement with the United
Kingdom, under which a British Armed Forces Ghurka battalion from
Hong Kong is permanently stationed in Seria, near the center of
Brunei's oil industry. The RBAF has joint exercises, training
programs, and other military cooperation with the United Kingdom
and many other countries, including the United States.
Brunei joined ASEAN on January 7, 1984--1 week after resuming
full independence--and gives its ASEAN membership the highest
priority in its foreign relations. Brunei joined the UN in
September 1984. It also is a member of the Organization of the
Islamic Conference (OIC) and of the Asia-Pacific Economic
Cooperation (APEC) forum. Brunei will host APEC's leaders'
summit in 2000.
Relations between the United States and Brunei date from the last
century. On April 6, 1845, the U.S.S. Constitution visited
Brunei. The two countries concluded a Treaty of Peace,
Friendship, Commerce and Navigation in 1850, which remains in
force today. The United States maintained a consulate in Brunei
from 1865 to 1867.
The U.S. welcomed Brunei Darussalam's receipt of full
independence from the United Kingdom on January 1, 1984, and
opened an embassy in Bandar Seri Begawan on that date. Brunei
opened its embassy in Washington in March 1984. Brunei's armed
forces engage in joint exercises, training programs, and other
military cooperation with the U.S. A memorandum of understanding
on defense cooperation was signed on November 29, 1994.
Principal U.S. Embassy Officials
Ambassador--Glen R. Rase
Economic/Political/Commercial Officer--Georgia T. Wright
Administrative/Consular Officer--George Novinger
The U.S. embassy in Bandar Seri Begawan is located on the third
floor of Teck Guan Plaza, at the corner of Jalan Sultan and Jalan
MacArthur; tel. 673-2-229670, 220384, 229785, 229786, 241645, or
235254; fax 673-2-225293.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program
provides Travel Warnings and Consular Information Sheets. Travel
Warnings are issued when the State Department recommends that
Americans avoid travel to a certain country. Consular Information
Sheets exist for all countries and include information on
immigration practices, currency regulations, health conditions,
areas of instability, crime and security, political disturbances,
and the addresses of the U.S. posts in the country. Public
Announcements are issued as a means to disseminate information
quickly about terrorist threats and other relatively short-term
conditions overseas which pose significant risks to the security
of American travelers. Free copies of this information are
available by calling the Bureau of Consular Affairs at 202-647-
5225 or via the fax-on-demand system: 202-647-3000. Travel
Warnings and Consular Information Sheets also are available on
the Consular Affairs Internet home page: http://travel.state.gov
and the Consular Affairs Bulletin Board (CABB). To access CABB,
dial the modem number: 301-946-4400 (it will accommodate up to
33,600 bps), set terminal communications program to N-8-1(no
parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The
login is travel and the password is info.(Note: Lower case is
required). The CABB also carries international security
information from the Overseas Security Advisory Council and
Department's Bureau of Diplomatic Security. Consular Affairs
Trips for Travelers publication series, which contain information
on obtaining passports and planning a safe trip abroad, can be
purchased from the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954;
telephone: 202-512-1800; fax 202-512-2250.
Emergency information concerning Americans traveling abroad may
be obtained from the Office of Overseas Citizens Services at
(202) 647-5225. For after-hours emergencies, Sundays and
holidays, call 202-647-4000.
Passport Services information can be obtained by calling the 24-
hour, 7-day a week automated system ($.35 per minute) or live
operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per
minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778).
Major credit card users (for a flat rate of $4.95) may call 1-
888-362-8668 (TDD: 1-888-498-3648).
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia. A
hotline at (404) 332-4559 gives the most recent health
advisories, immunization recommendations or requirements, and
advice on food and drinking water safety for regions and
countries. A booklet entitled Health Information for
International Travel (HHS publication number CDC-95-8280) is
available from the U.S. Government Printing Office, Washington,
DC 20402, tel. (202) 512-1800.
Information on travel conditions, visa requirements, currency and
customs regulations, legal holidays, and other items of interest
to travelers also may be obtained before your departure from a
country's embassy and/or consulates in the U.S. (for this
country, see "Principal Government Officials" listing in this
U.S. citizens who are long-term visitors or traveling in
dangerous areas are encouraged to register at the U.S. embassy
upon arrival in a country (see "Principal U.S. Embassy Officials"
listing in this publication). This may help family members
contact you in case of an emergency.
Further Electronic Information
Department of State Foreign Affairs Network. Available on the
Internet, DOSFAN provides timely, global access to official U.S.
foreign policy information. Updated daily, DOSFAN includes
Background Notes; Dispatch, the official magazine of U.S. foreign
policy; daily press briefings; Country Commercial Guides;
directories of key officers of foreign service posts; etc.
DOSFAN's World Wide Web site is at http://www.state.gov.
U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual
basis by the U.S. Department of State, USFAC archives information
on the Department of State Foreign Affairs Network, and includes
an array of official foreign policy information from 1990 to the
present. Contact the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To
order, call (202) 512-1800 or fax (202) 512-2250.
National Trade Data Bank (NTDB). Operated by the U.S. Department
of Commerce, the NTDB contains a wealth of trade-related
information. It is available on the Internet (www.stat-usa.gov)
and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more
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