History

An independent Islamic sultanate from the 14th century, Brunei was a powerful state by the early 16th century, with dominion over all of Borneo, its neighbouring islands, and the southern Philippines. With the growing presence of the Portuguese and Dutch in the region, its influence gradually declined from the late 16th century, and in the 19th century, Brunei lost much of its territory to the White Rajahs of Sarawak. The British North Borneo Company was founded in 1881, while Dutch traders dominated southern Borneo.

In 1888 Brunei became a British protectorate, and under an agreement of 1906 accepted the appointment of a British Resident as adviser to the sultan. The discovery of large oilfields in the 1920s brought economic prosperity to Brunei. The country was occupied by the Japanese in 1941 and liberated by the Australians in 1945, when it was returned to Britain. In 1950 Sir Omar Ali Saiffuddin Saadul Khairi Waddien (1916-1986), popularly known as Sir Omar, became sultan. His family had held the title of sultan since the 15th century. In 1959, a new constitution gave Brunei internal self-government but made Britain responsible for defence and external affairs. A proposal in 1962 Brunei should join the Federation of Malaysia led to a revolt against the monarchy, which was put down by British troops from Singapore. Subsequently, the sultan has ruled by decree. In 1967, Sir Omar abdicated in favour of his son, Hassanal Bolkiah, but continued to be his chief adviser. Brunei gained full internal self-government in 1971.

Independence achieved

In 1984 Brunei became fully independent, the sultan becoming prime minister and minister of finance and home affairs, presiding over a cabinet of six, three of whom were close relatives. Britain agreed to maintain a small force to protect the gas and oilfields that make Brunei the wealthiest nation, per head, in Asia. Since independence, Brunei has maintained close links with Western nations, in particular the USA and the UK, but it also joined the Association of South East Asian Nations (ASEAN).

Islamic nationalism

In 1985, the sultan cautiously allowed the formation of the loyal and reliable Brunei National Democratic Party (BNDP), an organization dominated by business people. A year later, ethnic Chinese and government employees (who were debarred from joining the BNDP) formed, with breakaway members of the BNDP, the Brunei National United Party (BNUP), which advocated establishing an elected prime-ministerial system. Both parties were banned in 1988 and severe restrictions placed on the operation of ‘radical’ opposition groupings.

In the 1990s more key cabinet portfolios were assigned to nonroyals and a more nationalist socioeconomic policy was adopted, with preferential treatment given to native Malays in the commercial sphere rather than the traditional Chinese. An Islamic state also emerged. In 1998, the sultan invested his eldest son, the 24-year-old Prince Al-Muhtadee Billah, as his successor

Economy

The country has foreign reserves of $25-27 billion, the income from which is $2 billion a year. Its annual income from gas and oil exports is $1.5 billion a year. More than one-third of the workforce are foreign nationals.

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