Background Notes: Brunei, October 1998
Released by the Bureau of East Asian and Pacific Affairs
U.S. Department of State

OFFICIAL NAME: Brunei Darussalam

PROFILE

Geography

Area: 5,769 sq. km. (2,227 sq. mi.), slightly larger than 
Delaware.
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.

People

Nationality: Noun and adjective--Bruneian(s).
Population (1998 est.): 320,000.
Annual growth rate: 2.5%.
Ethnic groups: Malay, Chinese, other indigenous.
Religion: Islam.
Languages: Malay, English, Chinese; Iban and other indigenous 
dialects.
Education: Years compulsory--9. Literacy--90%. (1996)
Health: Life expectancy--74 years. Infant mortality rate(1996)--
6.9/1,000. 

Government

Type: Sultanate.
Independence: January 1, 1984.
Constitution: 1959.
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 
Temburong.

Economy

GDP (1997): $4.9 billion.
Natural resources: Oil and natural gas.
Trade: Exports--oil, liquefied natural gas, petroleum products, 
garments.
Major markets--Japan, U.S., Korea  Imports--machinery and 
transport equipment,manufactured goods. Major suppliers--
Singapore, Japan, Malaysia, U.S.

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 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 
Kuala Belait.

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.

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 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 
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, 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 
criminal cases.

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 
Bolkiah
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.

ECONOMY

The ongoing region-wide Asian financial crisis, which began in 
1997, has created uncertainty and instability in Brunei's 
economy.

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 
1980 peak.

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 
1997.

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 
Royal Family.

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 
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 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.

DEFENSE

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.

FOREIGN RELATIONS

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.

U.S.-BRUNEI RELATIONS

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 
publication).

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 
information.

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