Wayzata World Factbook 1995/World Factbook - 1995 Edition - Wayzata Technology (1995).iso/mac/text/Build/orig BACKGR/BNOT0016.TXT

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National Trade Data Bank
ITEM ID     : ST BNOTES BRUNEI
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - BRUNEI

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | BRUNEI

BRUNEI BACKGROUND NOTES (JULY 1991)
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
US DEPARTMENT OF STATE

July 1991

Official Name:  Brunei Darussalam
PROFILE
Geography
Area:  5,769 square 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--Bruneians.  Population (1989):  249,000.
Annual growth rate (1989):  3% (50% of population is under age 20). Ethnic
groups:  Malay 70%, other indigenous 5%, Chinese 18%. Religion:  Islam.
Languages:  Malay, English, Chinese, and Iban and other indigenous
dialects.  Education:  Years compulsory--9. Literacy--95% among young;
less for older. Health:  Life expectancy--73 years (men), 76 years (women).
Work force (1989) 86,400:  government--50%;  petroleum sector--5%;
foreign workers--33%.

Government
Type:  Sultanate. 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 Temburong.

Central government budget (1990):
$2 billion.

National Day:  February 23.

Flag:  Yellow with a white and black diagonal with red state crest
superimposed.

Economy
GDP (1990):  $3 billion, 1989--$3.3 billion.  Per capita GDP (1989):  $13,300.
Natural resource:  Oil and natural gas--47% of GDP.
Exchange rate (July 1991):  US$1=B$1.76.
Major trading partners:  In 1989, total US-Brunei trade was only $138
million, with $63 million in exports to Brunei and $75 million in imports.  US
imports from Brunei consist almost entirely of petroleum products.

International Affiliations
UN and some of its specialized agencies, Association of South East Asian
Nations (ASEAN), Organization of the Islamic Conference (OIC),
Commonwealth.

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.
A priority project under the current 5-year plan is a campus that eventually
will accommodate up to 2,000 students.

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 founder of the current Sultanate was a pagan ruler named Awang Alak
Betar, who converted to Islam and took the name Muhammad.  According
to official records,  Sultan Muhammad's reign began in the year 1405.  He
was succeeded by his brother Ahmad, who later died without a male heir.
Ahmad was succeeded by his daughter's husband Sharif Ali, an Islamic
leader from the Middle East and a direct descendant of the prophet
Muhammad.

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
The country is governed by the 1959 constitution, under which the Sultan
is the head of state with full executive authority, assisted and advised by five
councils appointed by him.

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.  Two of the Sultan's
brothers serve as ministers of foreign affairs and finance.

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, five and six times a year.
Brunei has an arrangement with the Government of 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
English Privy Council in London.

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
I can see evidence of a genuine interest in politics on the part of a
responsible majority of Bruneians."

Principal Government Officials
Sultan and Yang di-Pertuan, Prime Minister, and Minister of Defense--His
Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah
Minister of Foreign Affairs--Prince Mohamed Bolkiah
Ambassador to the United States--Dato Haji Kassim

Brunei Darussalam maintains an embassy in the United States at 2600
Virginia Ave., NW, Washington, DC 20037. Tel.: [phone]

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 1989 GDP was still only about $3 billion, far 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 $20
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.  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.

A second joint venture, between the locally owned company Jasra
International Petroleum and the French oil company ELF Aquitaine, recently
became active in petroleum exploration in Brunei.  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 around 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 remained around
140,000 barrels per day through 1988 and 1989.  Japan has traditionally
been the main customer for Brunei's oil exports, but its share dropped from
45% of the total in 1982 to 25% in 1989.  In contrast, oil exports to South
Korea increased from only 8% of the total in 1982 to 25%--almost equal to
that of Japan in 1989.  Other major customers include Thailand, Singapore,
and Taiwan.  Brunei's oil exports to the United States accounted for 23%
of the total in 1982 and dropped to negligible amounts in 1987 and 1988.
Exports resumed again in 1989 but accounted for only a 5% share.

Almost all of Brunei's natural gas is liquefied at Brunei Shell's Liquefied
Nitrogen Gas (LNG) plant and exported to Japan under a long-term
agreement which will expire in 1993.  The agreement calls for Brunei to
provide about 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.  Brunei's
LNG plant opened in 1972 and was the largest in the world.  Brunei is the
fourth largest exporter of LNG, after Indonesia, Algeria,  and Malaysia.

In 1989,  Brunei's natural gas production averaged around 877,000 cubic
feet per day. A small amount of natural gas is used for domestic power
generation.  BSP also operates a small refinery with a distillation capacity
of 10,000 barrels per day. This satisfies domestic demand for most
petroleum products.

Brunei's oil reserves are sufficient for at least 20 more years, and gas
reserves are sufficient for at least 30 more years at current production rates.

Over the years, the government has undertaken a succession of 5-year
national development plans.  The stated aims under the 1986-90 plan are
to strengthen, improve, and further develop the economic, social, and
cultural life of its people, with priority on employment, and accelerating
development of agriculture and industry.  The plan allocated almost US $2
billion for such development over the 5-year period.  The need for economic
diversification was given renewed emphasis 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 is unwilling to allow much  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 supplier
of imports, accounting for about 26% in 1986. However, this may include
some transshipments, since most of Brunei's imports come through
Singapore.  Japan was the second largest supplier in 1986, with an 18%
share. 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 third largest supplier of
imports to Brunei in 1986.

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 should have a minimum of seven
shareholders and two directors.  Half the board should be Brunei nationals
or residents.  Private companies must have a minimum of two but not more
than 50 shareholders.  Half the directors of a private company also must be
Brunei national or residents.

The government owns a cattle farm in Australia which supplies much 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).

US-BRUNEI RELATIONS
Relations between the United States and Brunei, always friendly, date back
to April 6, 1845, when the USS Constitution visited Brunei. In 1850, the two
countries concluded a Treaty of Peace, Friendship, Commerce and
Navigation, which remains in force today. From 1865 to 1867, the United
States maintained its first consulate in Brunei. The United States welcomed
the resumption of full independence by Brunei Darussalam on January 1,
1984, and opened an embassy in Bandar Seri Begawan on that date.
Brunei opened its embassy in Washington in March 1984.

Principal US Officials
Ambassador--Christopher H. Phillips
Economic/Commercial Officer--James Bell
Administrative/Consular Officer--Omar Bsaies

The US Embassy in Bandar Seri Begawan is located on the third floor of
Teck Guan Plaza, at the corner of Jalan Sultan and Jalan MacArthur.
Telephone: [phone], 220405, 220406, 225460, 240762, or 240763.
Fax:  [phone].  Telex:  BU 2609 AMEMB.

Travel Notes
Climate and clothing:  Lightweight clothing is recommended for Brunei's
tropical climate.

Visas:  US citizens must obtain a Brunei visa in advance.  Brunei maintains
diplomatic missions in Jakarta, Kuala Lumpur, Manila, Singapore, Bangkok,
Canberra, Cairo, Tokyo, Riyadh, Seoul, Geneva, London, Paris, New York,
and Washington, DC.

Health: Bandar Seri Begawan is free from most diseases commonly
associated with Asia. Medical services are available at government hospitals
and clinics for a nominal fee.