Brunei

Modern Brunei

The last years of the 20th century saw Brunei's waning fortunes come to a head. By 2001, the country's per capita GDP was down almost 50% on what it had been at the time of Brunei's Independence. The troubles began with the Asian economic crisis of 1997 and were further compounded by falling oil prices and by the collapse of the country's biggest non-oil company, Amedeo Development Corporation, which had run up debts of US$3.5 billion. Amedeo had been owned and run by the sultan's brother and finance minister, Prince Jefri, a man of excessive extravagance and little business acumen. The prince resigned from his position as finance minister, and a national scandal followed, with the sultan eventually suing his brother for siphoning billions of dollars from the Brunei Investment Agency, for which the prince had served as chairman. The brothers eventually settled out of court, but the publicity has had lasting consequences, damaging Brunei's credibility with foreign investors. Brunei's shaken economy has now stabilized, but the whole episode has served to highlight just how over-dependent Brunei is on oil (at present Brunei's economy relies almost exclusively on exports of oil and LNG - liquefied natural gas). As oil prices peak and trough, so do Brunei's fortunes. More worryingly, the nation's oil and gas reserves are expected to dry up in 2018 and 2033 respectively. This vulnerability has prompted the sultan to initiate reforms - both economic and political. Diversification of the economy has now become a priority and the sultan has curbed government spending while encouraging the growth of privatization.

One of his primary visions was to transform Brunei into an Offshore Financial Haven (in the vein of Bermuda or the Isle of Man) and the government has now achieved this. So-called Islamic Finance is also being targeted. In 2000, the BIFC (Brunei International Finance Centre) began trading successfully.

Ecotourism, meanwhile, is another of Brunei's trump cards for the future (more than 70% of the land mass remains cloaked in virgin rainforest). Still, many commentators point out that visitor figures are likely to remain low until the government eases laws on the prohibition of alcohol. Perhaps more significant has been the political fallout of Brunei's economic problems. The new-found desire to attract investors and tourists has forced the sultan to reconsider Brunei's international image. There has been a shift away from the Islamic conservatism of the 1990s - a fact underlined by the dismissal in 2005 of the education minister, a conservative Islamist whose introduction of a strict religious education had become increasingly unpopular. Prior to this, the first tentative move towards 21st-century democracy was instigated, with the appointment of a new legislative council. In September 2004, the country's parliament reopened for the first time since Independence, with 29 seats, all chosen by the sultan. Though political parties are allowed (there are three), to all intents and purposes, the sultan still retains authoritarian control over his kingdom - just as his ancestors have for 600 years. Nevertheless, the elections, still pending five years after parliament's reopening, are being viewed as the first step towards a modern Brunei - a Brunei without oil, but with a new politics of consensus.

This is edited copy from Footprint Handbooks. For comprehensive details (incl address, tel no, directions, opening times and prices) please refer to book or individual chapter PDF
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