Brunei 2011, between diplomatic skill and hydrocarbon rent

The State of Brunei Darussalam (courtesy Brunei Darussalam Street Directory)

Located at 300km in the south-west of the northern most point of Borneo, Brunei is of modest dimensions: 400,000 inhabitants (one tenth of Singapore's population) and 5,765km² (8 times the surface of Singapore and the equivalent of Delaware), embedded in Sarawak whose Limbang division parts its territory in two. Non-citizensrepresent some 35% of the resident population, divided into: Malaysian Malays (9%), overseas Chinese (8%), other Malaysian indigenous (1%), Philipinos and Indonesians(17%).

On the basis of the last archaeological discoveries and of some scarce written sources, Brunei appears at the end of the 10th century as a commercial monarchy, integrated within the South China Sea networks and characterized by the camphor trade. Through Quanzhou, Brunei gets in touch with Islam in the middle of the 13^th century. The China trade develops in Brunei under the Yuan dynasty whereas new competitors upsurge in Eastern Java. In 1292, the Mongol raid in Eastern Java ^[1] then opens up the way for the constitution of the Majapahit kingdom, which gradually extends its network of tributaries until Brunei. Following the resumption of an ambitious maritime policy by the Ming dynasty in 1370, Brunei plays once again the Chinese, to be released from the Javanese, but this time jointly with the Malays whose trade networks coagulate around Malaka. Like his Malaka counterpart, the maharaja of Brunei adheres to Islam at the beginning of the 15th century. The decline of Majapahit, then the conquest of Malaka by the Portuguese (1511) allows Brunei to control most of the ports on the western coast of Borneo, Sulu and Manila. But its expansion turns short after the Spanish attack of 1578. Slow commercial erosion (17th-18th centuries) gradually deprives Brunei of the means of suzerainty on its riverine dependencies. The internal tensions thus attract foreign predators. In the south first, where the Brookes seize the whole of Sarawak in one half-century (1840-1890). In the north then, where the North-East Borneo Company lays hands in three decades (1877-1904) on Sabah. Saved in extremis by the British from absorption by Sarawak, Sultan Hashim gives up his sovereign rights in 1906.

Over three decades, the British implement – by granting loans – the bases of a modern state. Following the oil discovery in Seria (1929),Brunei's debt is refunded in the middle of the 1930s. After the massive destructions of the Second World War, the transfer of Sarawak and North Borneo to the United Kingdom, followed by the administrative merger of Brunei and Sarawak, nurtures a nationalist movement so that Sultan Omar Ali Saifuddin III (1950-1967) defines a new Bruneian paradigm: he supports the foundation of a welfare state (1954), conceptualizes ‘Malayness' (Melayu Islam Beraja, or Malay Islamic monarchy), signs a treaty with the British and promulgates a constitution (1959). The proposal of joining the Malaysian Federation (with Singapore and the two other British territories of Borneo) meeting staunch opposition in Brunei, the PRB (Partai Rakyat Brunei, favorable to a Federation of West Borneo, wins the totality of the constituencies at the first general elections. Insurgency bursts in December 1962, subdued by British troops. In June 1963, the Sultan refuses to integrate Malaysia. On October 4th, 1967, Omar Ali Saifuddin abdicates in favor of his eldest son, Hassanal Bolkiah. Maintaining the state of emergency, self-government (1971) and oil rent then make it possible to prevent any political turmoil.

On January 1st, 1984, independence starts under the most favorable auspices: the hydrocarbons ensure between 40 and 60% of the GDP and 90% of exports. The adhesion to ASEAN (Association of South-East Asia Nations) in January 1984 is followed at once by the establishment of diplomatic relations with the Western camp, jointly with multiple partnerships in the field of defense. More, the Sultan affirms his solidarity with the Moslem countries: he personally goes to the Rabat Summit at the time of Brunei's admission to the Organization of Islamic conference (OIC) and invites Yasser Arafat. After the widening of its fishing area to a distance of 200 nautical miles, measured starting from the baseline, the relations soon become complicated with Vietnam, Philippines and Malaysia.

Brunei votes in favor of the UN intervention in Kuwait, which contributes to maintain a regiment of British gurkhas close to oil installations. And if Brunei integrates into its diplomacy more and more countries far from its immediate geostrategic environment, it normalizes with the first regional military power, China, in September 1991. While supporting (1992) the ASEAN declaration on the South China Sea, it broadens its fishing area to an exclusive economic zone(EEZ) in July 1993, to the dismay of Malaysia. Internal negotiations with ASEAN allowed however the constitution of the growth triangle BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area) in March 1994. In August 1995,Bruneiholds the second ministerial meeting of the ASEAN Regional Forum (ARF). The Sultan normalizes with the candidates to ASEAN, Vietnam(1992), Laos and Myanmar (1993). During the Asian financial crisis, Brunei shows an exemplary solidarity with its neighbors: in addition to the Singaporean dollar to which the Bruneian dollar is pegged by a fixed parity and a currency board, the Sultanate supports the Malaysian ringgit (August 1997), then grants a 1.1 billion US dollars emergency loan to Indonesia (November 1997), followed by more in 1998, and contributes as much as 500 million US dollars to the IMF bailout in Thailand. Brunei's support is rewarded by hosting the twentieth South-East Asia Games in Bandar Seri Begawan, in August 1999. In addition to its positive regional insertion, Brunei increases its activity within the multilateral organizations: in 1995, it agrees to help Bosnia and the Middle East as befits its OIC membership and enters IMF. The sultanate contributes largely to the UN agencies and to the Commonwealth while regularly denouncing the Israeli policy.

At the threshold of the third millennium, Brunei's success in integrating the concert of the Nations is illustrated when it hosts (November 2000) of the 8^th APEC Summit, as well as by the visit of State of the South Korean and Chinese Presidents and the signature of a trade agreement with the United States. One year later, it welcomes the 7th ASEAN and 1^st ASEAN+3 (ASEAN + China, Japan, South Korea) summits. Brunei is also recognized as a partner in the regional security, as illustrated by (among others) the joint exercise against piracy carried out by its maritime police and Japanese coastguards in August 2002. The sultanate, which has thirty-two embassies abroad and maintains diplomatic relations with more than one hundred countries, entered the Asian Development Bank in April 2006 and the International Labour Organization in January 2007.

The ASEAN remains however the privileged space of the Bruneian diplomacy. According to the AFTA (ASEAN Free Trade Area) calendar, customs tariffs between the ASEAN-5 and Brunei have been reduced to less than 5% in January 2003. In December 2005, Brunei integrated CAFTA too, which suppressed most of the customs duties between China and ASEAN-6 in January 2010. The ASEAN continues to benefit from the assistance of the Sultanate, which is nowadays extended to security and to the humanitarian. In October 2004, ten Bruneian officers left for Philippines to participate to the supervision of an agreement with the Moro Islamic Liberation Front (MILF). In 2008, the Bruneians required to direct the international team in charge of monitoring the cease-fire in Mindanao after the withdrawal of the Malaysians. Brunei granted an emergency aid to Indonesia (Acehin 2005 and Yogyakartain 2006) and to Myanmar (after the Nargis cyclone, in 2008). It supports the safeguard of the Borneo rain forest too: since February 2007, more than 60% of the Brunei territory is part of the “Heart of Borneo” project, aiming to preserve one third of the surface of the island.

Whatever, the subjacent conflict with Malaysia erupted at the beginning of 2003 when the M and L blocks that Kuala Lumpur had just granted to a consortium directed by Petronas-Murphy, happened to partially cover the block K and especially the block J, whose Brunei had allotted exploration to a consortium carried out by Total-Fina-Elf. Six years later(March 2009) a border agreement was finally signed between Brunei and Malaysia. The implementation of the exploitation of the aforesaid blocks was specified in September 2010.

On January 1st, 2011, according to current technologies and volumes, Brunei would have fifteen years of oil-reserve (1,35 billion barrels) and more than thirty of gas (400 billion cubic meters), and this not counting the deep water layers that the agreement with Malaysia makes from now on accessible. Thanks to hydrocarbons, Brunei generates in 2010 a GDP of some 15 billion US dollars. Its 35,000 US dollars of GDP per capita make it the second richest ASEAN country after Singapore. More, as its current accounts, the Brunei budget structurally generates a surplus. Its urban topography (absence of business districts, under-occupation of the sea front, etc.) reveals however choices at the opposite of those of the Persian Gulf‘ Emirates' (i.e. including Kuwait): the financial risk presented by Brunei is insignificant; immigration is limited to a maximum of some 35% of the total population, etc. According to the level of social protection enjoyed by the citizens, their high standard of living, the Rule of law and the lifelessness of the political life (a named Legislative Council was re-established only in 2004), the opposition is non-existent.

Marie-Sybille de Vienne
Professor at the National Institute of Eastern Languages and Civilisations (Inalco)
Director of the Centre for International Studies (CPEI)
Director of the Péninsule magazine

^[1] In addition to Japan and East-Java, the Mongol squads attempted to conquer the Tonkin, but they never got farther than the Southern China Sea and the small Sunda Islands. The Mongol army recruited its soldiers among the conquered populations: the captains and crews of the ships sent to South-East Asia (supervised by Mongol generals and officers) were mostly from Southern China. It was the same with the Mongol armies that ransacked Pagan (in Burma) and then swarmed over the northern Indochina Peninsula, which consisted of troops coming mainly from various Thai ethnic groups, recruited in what is now Southern China. Thus was increased the speed at which the Thai populations moved into the Peninsula and funded kingdoms such as Siam, Lanna, etc. in the 14th century.

January 2016

Alexis Darbon

Chercheur postdoctorante à la Stiftung Wissenschaft und Politik (Berlin)