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COUNTRY BRIEFS


GENERAL INFORMATION

Geography

The Sultanate of Brunei Darussalam is situated on the northwest coast of the island of Borneo. The capital, Bandar Seri Begawan, lies inland on the Brunei River. Brunei occupies 5,765 square kilometres and is divided into two parts, both of which are surrounded by the Malaysian state of Sarawak. Relatively little of Brunei's landmass is cultivated and around 60 per cent is covered by primary forest.

Brunei's coastline stretches for 161 kilometres along the South China Sea. Brunei is one of many nations with outstanding claims regarding South China Sea boundaries, including the Spratly Islands.

Brunei's tropical climate is hot, humid and rainy. The average annual temperature is 27.1°C and the country receives an average of almost 2.9 metres of rain annually.

Population

The population of Brunei is estimated at 417,000 (2010 IMF data), about 66 per cent of whom are ethnic Malay. A further 11 per cent are ethnic Chinese and about three per cent are indigenous. The relatively large population of foreign contract workers is drawn from Indonesia, Malaysia, the Philippines and Thailand, as well as from South Asia.

Malay is the official language, although a sizable minority speak Chinese dialects and English is widely used in commerce, education and government. The local variety of Malay (Kedayan or Bukit Malay) is quite different from standard Malay.

Islam is the official religion of Brunei Darussalam and the Islamic faith permeates the social and cultural fabric of the country. There are minority groups of Buddhists, Christians, Hindus and a small number of people who practise indigenous religions.

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POLITICAL OVERVIEW

Brunei's National Day is 23 February — a date associated with Brunei's independence in 1984. Its political structures are informed by the national philosophy of Melayu Islam Beraja (MIB), or Malay Islamic Monarchy.

Brunei is constitutionally an absolute monarchy. It is ruled by the Sultan and Yang Di-Pertuan of Brunei Darussalam, His Majesty Paduka Seri Baginda Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, who is both the head of state and Prime Minister. He is also the head of the Islamic faith in Brunei. His Majesty is the 29th Sultan in one of the oldest continuous hereditary royal lines in the world.

The Sultan's eldest son, His Royal Highness Prince Haji Al-Muhtadee Billah, was proclaimed Crown Prince of Brunei Darussalam and heir to the throne of Brunei on 10 August 1998.

Brunei achieved internal self-government in 1959 following a period of British rule when Sultan Omar Ali Saifuddien III (the father of the present Sultan) assumed executive authority. However, under Brunei's first constitution written in 1959, the country's foreign relations remained under Britain's control.

In the District Council elections in July-August 1962, the Brunei People's Party (PRB) won 54 of the 55 seats. Then, in a September 1962 poll dominated by the PRB's campaign against Brunei's proposed absorption into the planned Malaysian Federation, the PRB won all the elected seats in the Legislative Council. The Sultan delayed convening the Legislative Council and affirmed his intention to take Brunei into Malaysia. In December the military wing of the PRB revolted. The revolt was rapidly quelled with the assistance of British troops, its leaders forced into exile and the PRB banned. The elective provisions of the Constitution were suspended and no elections have been held since.

Brunei ultimately declined to join the Malaysian Federation due to disagreements over financial arrangements and difficulties in determining the rank of the Sultan among the Malay rulers.

On 4 October 1967, Sultan Omar Ali Saifuddien III abdicated in favour of his 21 year-old eldest son, the present Sultan Hassanal Bolkiah. Sultan Omar Ali Saifuddien III passed away on 7 September 1986.

Under a November 1971 agreement, Brunei obtained full internal autonomy and ceased to be a protected state. Britain continued, however, to retain responsibility for Brunei's foreign relations and accepted a potential role in Brunei's defence. The two countries signed a Treaty of Friendship and Cooperation in 1979 terminating the 1971 agreement. They also committed to realising full independence for Brunei in 1984.  His Majesty the Sultan of Brunei declared Brunei's political independence from Britain on 1 January 1984 and independence from British protection was achieved on 23 February 1984.

In 1984, Brunei's Government was restructured into a formal ministerial system with the Sultan as Prime Minister. The Sultan also serves as Minister of Defence and Minister of Finance. He is advised by, and presides over, four policy councils: the Council of Cabinet Ministers, the Legislative Council, the Privy Council and the Religious Council. The Sultan appoints the members of each of these Councils.

After a 20 year hiatus, the Sultan reconvened the Brunei Legislative Council on 25 September 2004, appointing 21 members. His Majesty then appointed a new Council with 29 members in September 2005.

In May 2010, the Sultan announced a Cabinet reshuffle. The Crown Prince, His Royal Highness Prince Haji Al-Muhtadee Billah, now holds the position of Senior Minister at the Prime Minister's Office. The Sultan's brother, His Royal Highness Prince Mohamed Bolkiah, is the Minister of Foreign Affairs and Trade. The eleven other Cabinet Ministers are not members of the royal family.

Brunei has one legal political party, the Parti Pembangunan (National Development Party or NDP).

Brunei's judicial system reflects the strong influence of British common law. The Supreme Court comprises the High Court and the Court of Appeals, while the Subordinate Court consists of the Magistrates' Courts. The Chief Justice and Judges of Brunei's Supreme Court are sworn in by the monarch for three-year terms. The Privy Council in London remains the final court of appeal for civil cases. The jurisdiction of the Islamic Courts, which coexist with the Supreme Court, is limited to family law and property matters for Muslims including inheritance.

The royal family retains a venerated position within the country and adverse comment regarding royal family matters is forbidden in Brunei.

Foreign policy

Brunei's foreign policy aims to promote national policies through bilateral and multilateral fora, by encouraging cooperation in all fields. The goal is to contribute towards promoting peace, security, stability and prosperity in the region, particularly by fostering deeper understanding among countries. To this end, the Association of Southeast Asian Nations (ASEAN) remains the cornerstone of Brunei's foreign policy. Brunei became a member of ASEAN in 1984.

The guiding principles of Brunei's foreign policy include: mutual respect for the territorial integrity, sovereignty, independence and national identity of all nations; recognition of the equality of all nations large and small; non-interference in internal affairs; peaceful settlement of disputes and cooperation for mutual benefit.

Brunei is active in a range of regional and multilateral fora, including Asia Pacific Economic Cooperation (APEC), the East Asia Summit (EAS), the ASEAN Regional Forum, the Asia-Europe Meeting, the Forum for East Asia-Latin America Cooperation and the Asia Cooperation Dialogue. It is a member of the Organisation of the Islamic Conference and the World Trade Organization (WTO), and joined the United Nations (UN) when it became independent in 1984. Brunei was one of the four original members of the 2006 Trans-Pacific Strategic Economic Partnership with Chile, New Zealand and Singapore.

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ECONOMIC OVERVIEW

Brunei's small, high-income, open economy is underpinned by revenue from the oil and gas sector. At over USD 31,000 Brunei's per capita Gross Domestic Product (GDP) is among the top 25 in the world (2011 IMF data).

In 2009, oil and gas accounted for around 60 per cent of Brunei's economy. Brunei's extensive foreign investments form a large, yet unreported contribution to the national budget.

Small scale manufacturers (mainly furniture and textiles) and primary production (including agriculture, fisheries and forestry) make up the rest of Brunei's merchandise economy. Brunei imports nearly all of its major manufactured products and nearly 90 per cent of its total food requirements.

Despite Brunei's high dependence on oil and gas, this sector employs only three per cent of the workforce. The public sector is by far the largest employer of Brunei's population, providing employment for over half the workforce.

Brunei has a low tariff regime and no capital gains or personal income tax, although private businesses pay company tax. Company tax for oil and gas exploration and production companies is 55 per cent. For all other companies it is 25 per cent. Brunei operates a currency board system and has no central bank, with the Brunei Dollar (BND) being tied at parity with the Singapore Dollar. Both currencies are legal tender in Brunei and Singapore.

The Brunei Government aims to diversify the economy away from heavy dependence on oil and gas by promoting private non-energy sector development and attracting more non-oil and gas related investment. The Brunei Economic Development Board (BEDB) was formed in November 2001 to stimulate the growth, expansion and development of the economy by promoting Brunei as an investment destination and facilitating diversification projects.

In January 2008, the Brunei Government released its Long-Term Development Plan (Vision 2035), which aims to deliver economic diversification and to achieve a wide range of development goals by 2035. The Plan includes the fifth National Development Plan (RKN), which set a growth target of six per cent and earmarked BND$9.5 billion for 826 projects intended to help achieve the Government's development goals.

Recent economic performance

The global economic crisis had limited impact on Brunei, mainly due to limited global exposure in its capital markets. Domestic banks are adequately capitalised and profitable. Banks are also highly liquid, with more than half of total deposits parked abroad. Further stability was provided by the Government's October 2008 guarantee of all Brunei-dollar and foreign currency deposits until the end of 2010.

However, the fall in oil prices following the global economic crisis and subsequent decline in energy production saw Brunei's GDP contract by 1.9 per cent in 2008 and 1.8 per cent in 2009. 2010 saw a return to positive growth with Brunei's GDP increasing by 4.1 per cent, due in part to more favourable external conditions and the large fiscal and current account surpluses built up through prudent Government policy in recent years.

Economic outlook

Brunei's heavy dependence on the oil and gas sector means that its economy is highly vulnerable to fluctuations in oil and gas prices, which makes it difficult to predict long-term economic prospects. This dependence looks set to continue in the medium term.

While Brunei's oil and gas reserves were expected to last for at least the next two decades, the March 2009 settlement of an outstanding sea bed boundary dispute with Malaysia could eventually open the way to the development of substantial new oil and gas reserves.

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AUSTRALIA-BRUNEI BILATERAL RELATIONS

Australia and Brunei enjoy a warm relationship dating back to well before 1959, when Brunei achieved internal self-government. The relationship has strengthened in recent years, with growing links across a range of areas including defence and security, education and trade.

Brunei is an important partner for Australia in the Commonwealth, APEC, the EAS, the Trans-Pacific Partnership negotiations, and multilateral organisations like the UN and WTO. Brunei was the ASEAN Coordinator in negotiations on the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) (http://www.dfat.gov.au/fta/aanzfta/index.html) , which was signed in Thailand on 27 February 2009 and entered into force on 1 January 2010.

In June 2005, Brunei's Foreign Minister, His Royal Highness Prince Mohamed Bolkiah, agreed to an Australian proposal to erect a permanent memorial to mark the 1945 landings in Brunei of the Australian force, which ended Japanese occupation and commenced reconstruction. A delegation of Australian veterans, led by the then Minister for Veterans Affairs, the Hon Alan Griffin MP, travelled to Brunei to attend the inauguration ceremony for the memorial in December 2008.

Australia is developing a strong education and training relationship with Brunei. It is keen to facilitate linkages between Australian and Bruneian education institutions, including increasing the number of Bruneian students undertaking Australian tertiary courses.

Defence and security links

Australia has a strong Defence relationship with Brunei, with avenues of engagement including strategic dialogue, bilateral military exercises and technical assistance. Military exercises conducted with the Royal Brunei Armed Forces include reciprocal company level army and navy exercises. Australia also provides some training and military expertise.

On 15 February 2005, Australia and Brunei signed a Memorandum of Understanding (MOU) on Cooperation to Combat International Terrorism during the visit to Australia by His Majesty the Sultan of Brunei. The MOU provides for cooperation on customs, finance, immigration, intelligence, law enforcement, security and transport. During then Australian Federal Police Commissioner Mick Keelty's visit to Brunei in May 2008, the two countries signed an MOU on combating Transnational Crime and Developing Police Cooperation.

Bilateral visits

His Majesty the Sultan of Brunei made his first official visit to Australia in February 2005, and visited again in September 2007 for the APEC Summit in Sydney.

In August 2008, Brunei's Minister for Education visited Australia and in March 2009, the Deputy Minister of Education also visited. During 2007, six Bruneian ministers attended various APEC ministerial meetings in Australia and the Minister of Culture, Youth and Sports visited for the Arafura Games.

The former Minister for Veterans Affairs, the Hon Alan Griffin MP, visited Brunei in December 2008 for the inauguration of an Australian war memorial.  The Parliamentary Secretary for Sustainability and Urban Water, Senator the Hon Don Farrell, visited Brunei in October 2010 to attend the second EAS Environment Ministers' Meeting.

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BILATERAL ECONOMIC AND TRADE RELATIONSHIP

Brunei was ranked as Australia's 35th largest merchandise trading partner in 2010, though this ranking likely understates the level of transhipped trade between Australia and Brunei via Singapore.

Trade and investment is an important focus of Australia's bilateral relationship with Brunei. Total direct bilateral trade with Brunei in 2010 amounted to $1.09 billion, with Australia's imports of crude petroleum from Brunei comprising just over $1.05 billion. Australia's merchandise exports to Brunei in 2010 totalled $33 million, consisting mainly of food and food products including meat excluding beef ($6 million), live animals ($3 million), beef ($3 million) and fresh vegetables ($2 million). The Bruneian Government owns two cattle stations in the Northern Territory and has interests in related industries and the tourism sector.

In the services sector, a number of Australian teachers and other professionals work in Brunei. In 2010, Australia's service exports to Brunei (mainly education) were worth $58 million. Australia is now the second preferred destination for Bruneian students, with approximately 565 Bruneians enrolled in education institutions in Australia in 2010.

Australian trade and investment strategies

The ASEAN-Australia-New Zealand Free Trade Agreement

On 27 February 2009, the former Minister for Trade Simon Crean joined trade ministers from the ten member states of ASEAN (including Brunei) and New Zealand in signing the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) (http://www.dfat.gov.au/fta/aanzfta/index.html) in Thailand. As lead ASEAN Coordinator in the negotiations, Brunei played an important role in securing this Agreement.

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EXPORT OPPORTUNITIES

There are good trade and investment opportunities in Brunei including in the oil and gas, food and agriculture, financial and service sectors. Brunei's diversification efforts also hold some promise for Australian investors.

A joint halal food production and marketing export initiative was announced in February 2005, during the Sultan's visit to Australia. Both countries agreed to examine ways to develop a halal export industry combining Australia's reputation as a producer of fresh, high quality food products with Brunei's stringent halal certification standards. The Brunei Government launched the Brunei halal accreditation symbol in August 2007, and it launched the BruneiHalal brand at its International Halal Expo in July-August 2009.

Australian Trade Commission (Austrade)

Austrade has identified potential opportunities for Australian suppliers of goods and services in a number of sectors. Austrade's Brunei country page (http://www.austrade.gov.au/Brunei-profile/default.aspx) has general information on doing business and on specific export opportunities. Austrade Brunei (http://www.austrade.gov.au/Austrade-s-offices-in-Brunei/default.aspx) can also provide advice on accessing opportunities in Brunei.

Australia-Brunei Darussalam Business Council

The Australia-Brunei Darussalam Business Council (ABDBC) was established in 1994 in response to the growing interest in trade and investment between Australia and Brunei. The Council's objectives are to foster friendship and understanding between the business communities of both countries, promote technical cooperation, trade, investment and tourism, and facilitate the development of new business strategies to enhance the bilateral business relationship. The ABDBC's founder and President is Mr Francis Wong. The contact details for Mr Wong are:
-- Phone: 618 8221 5722
-- Fax: 618 82215001
-- Email: francis@encounter-australia.com.au (mailto:francis@encounter-australia.com.au)

Or, care of:

-- Council for International Trade and Commerce South Australia

136 Greenhill Road

UNLEY SA 5061
-- Phone: 618 8300 0110
-- Fax: 618 8300 0120
-- Website: www.citcsa.org.au (http://www.citcsa.org.au/)

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MORE INFORMATION ON BRUNEI

Australian Government

-- Australian High Commission, Brunei (http://www.bruneidarussalam.embassy.gov.au/)

-- Austrade Country Page, Brunei (http://www.austrade.gov.au/Austrade-s-offices-in-Brunei/default.aspx)

-- Australian Trade Commissions' Detailed Country Page and Links, Brunei (http://www.austrade.gov.au/Brunei-profile/default.aspx)

-- Brunei Country Fact Sheet, DFAT [PDF] (http://www.dfat.gov.au/geo/fs/brun.pdf)

-- Smartraveller Travel Advisory, Brunei (http://www.smartraveller.gov.au/zw-cgi/view/Advice/Brunei_Darussalam)

Brunei Government

-- Government of Brunei Darussalam Official Website (http://www.brunei.gov.bn/index.htm)

-- High Commission of Brunei Darussalam, Australia (http://protocol.dfat.gov.au/Mission/view.rails?id=32)

-- Ministry of Foreign Affairs and Trade (http://www.mfa.gov.bn/index.htm)

-- Brunei Economic Development Board (http://www.bedb.com.bn/)
-- Ministry of Industry and Primary Resources (http://www.bruneimipr.gov.bn/wps/portal)

-- Brunei Tourism (http://www.tourismbrunei.com/)

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Last Updated: July 2011

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