Brunei flag

Brunei Darussalam country brief

Overview

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'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.

The population of Brunei is estimated at 406,000 (Brunei Economic Development Board), about 67 per cent of whom are ethnic Malay. A further 15 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 and the Philippines, as well as from South Asia.

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

Political overview

Brunei's National Day is 23 February, a date which traditionally marks Brunei’s achievement of full independence from Britain. Its political structures are informed by the national philosophy of Melayu Islam Beraja (MIB), or Malay Islamic Monarchy.

System of Government

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 the 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.

Political history

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. 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.

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 Malayan Federation due to disagreements over financial arrangements and difficulties in determining the rank of the Sultan among the Malay rulers.

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, with independence 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. A 24 member Legislative Council was appointed for a five year term on 1 June 2011.

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

Brunei has one legal political party, the Parti Pembangunan Bangsa (National Development Party or NDP), which is small and has limited activity. 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. In civil cases only, there is an avenue of appeal from the Court of Appeal of Brunei to the Sultan. By arrangement with the Queen of England, these appeals are heard by the UK’s Privy Council on behalf of the Sultan. Until 2014, the jurisdiction of the Islamic Courts, which coexist with the Supreme Court, was limited to family law and property matters for Muslims such as inheritance.

In October 2013, the Sultan announced that a Syariah Penal Code would be phased in from April 2014. Under the Code, the jurisdiction of the Islamic Courts will expand to deal with offences and penalties prescribed in the Code. These offences include, but are not limited to, apostasy (abandonment of Islam), robbery, rape and murder. Penalties include, but are not limited to, death and corporal punishment. The Code will mainly apply to Muslims, however non-Muslims may also be charged under the Code for certain offences including, but not limited to, drinking alcohol in public and adultery committed with a Muslim.

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 forums, by encouraging cooperation in all fields. The goal is to contribute towards 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. Brunei chaired ASEAN and the East Asia Summit (EAS) in 2013.

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 forums, including Asia Pacific Economic Cooperation (APEC), the East Asia Summit (EAS), the ASEAN Regional Forum (ARF), the ASEAN Defence Ministers' Meeting Plus (ADMM+), the Asia-Europe Meeting (ASEM), the Forum for East Asia-Latin America Cooperation (FEALAC), and the Asia Cooperation Dialogue. It is a member of the Organisation of Islamic Cooperation (OIC) and the World Trade Organization (WTO), and joined the United Nations (UN) when it became independent in 1984. Brunei is a party to the Trans-Pacific Strategic Economic Partnership (P4), which entered into force in 2006, and also involves Chile, New Zealand and Singapore. The Trans-Pacific Partnership (TPP) Agreement negotiations, which also include Australia, the United States, Peru, Vietnam, Malaysia, Canada, Mexico and Japan in addition to the P4 members, seek to build on this Agreement.

Australia and ASEAN will celebrate their 40th Anniversary of relations in 2014.

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 Agreement negotiations, and multilateral organisations such as the UN and WTO. Brunei was the ASEAN Coordinator in negotiations for the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), 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  then Minister for Veterans Affairs, the Hon Alan Griffin , travelled to Brunei to attend the inauguration ceremony for the memorial in December 2008.

People to people links

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 solid 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 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 the former 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.

Economic overview

Brunei's small, high-income, open economy is underpinned by revenue from the oil and gas sector, with per capita Gross Domestic Product (GDP) over US$40,800 in 2013. In 2012, oil and gas accounted for around 67 per cent of Brunei's GDP. Brunei's extensive foreign investments form a large, yet unreported contribution to the national budget. Small scale manufacturers and primary production (including agriculture, fisheries and forestry) make up the rest of Brunei's economy. Brunei imports nearly all of its major manufactured products and about 80 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 22 per cent. Brunei's monetary policy and banking regulation is administered by the Brunei Monetary Authority (AMBD), created in 2011, and the Brunei Dollar (BND) is pegged to the Singapore Dollar. Both currencies are legal tender in Brunei and Singapore.

The Brunei Government is working towards diversifying 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 Vision 2035 (Wawasan 2035), which sets out the overarching goal of delivering economic diversification by 2035 and the broad development strategies that Brunei will pursue over this period. Five year National Development Plans (RKNs) then set out detailed project and budgets for delivering Vision 2035. The RKN for the period 2012 to 2017 was announced in April 2012 and it continued to target an annual growth rate of 6 percent over the life of the Plan.

Recent economic performance

Following GDP contraction during the global financial crisis, Brunei has now experienced four consecutive years of GDP growth, including 1.4 per cent in 2013 and 0.9 per cent in 2012. This growth is due in part to more favourable external conditions and also to the large fiscal and current account surpluses built up in previous 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. This dependence looks set to continue in the medium term.

Brunei's existing oil and gas reserves are expected to last for at least the next two decades. A phase of extensive new exploration and investment in enhanced recovery has commenced, which includes the development of two major new offshore deep-water blocks. While it is still too early to determine precisely the size of any new reserves, the Brunei Government has publicly stated its ambitious target of doubling Brunei's daily oil and gas production by 2035.

Trade and investmentTrade and investment is an important focus of Australia's bilateral relationship with Brunei. Brunei was ranked as Australia's 39th largest merchandise trading partner in 2012-13, though this ranking likely understates the level of transhipped trade between Australia and Brunei via Singapore. Total direct bilateral trade with Brunei in 2012-13 amounted to $1.026 billion, with Australia's imports of crude petroleum from Brunei comprising $978 million. Australia's merchandise exports to Brunei in 2012-13 totalled $46 million, consisting mainly of food and food products including meat (excluding beef) ($6 million), live animals ($6 million), beef ($7 million) and measuring and analysing instruments ($3 million).

In the services sector, a number of Australian teachers and other professionals work in Brunei. In 2012-13, Australia's service exports to Brunei (mainly education-related travel and transport) were worth $53 million. Australia is now the second preferred destination for Bruneian students, with approximately 400 students currently studying in Australia.

Australia’s New Colombo Plan was launched in December 2013 and will roll out gradually over the next few years to countries in the Indo-Pacific. The Plan aims to encourage Australian students to undertake study and internships in the region in order to lift Australia’s knowledge of the region and strengthen people-to-people links.

A Tax Information Exchange Agreement (TIEA) was signed between Brunei and Australia in August 2013.

The ASEAN-Australia-New Zealand Free Trade Agreement

On 27 February 2009 the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) was signed in Thailand. As lead ASEAN Coordinator in the negotiations, Brunei played an important role in securing this Agreement.

Good trade and investment opportunities exist in Brunei including in the oil and gas, education, food and agriculture, financial and service sectors.

Austrade has identified potential opportunities for Australian suppliers of goods and services in a number of sectors. Austrade's Brunei country page has general information on doing business and on specific export opportunities. Austrade Brunei can also provide advice on accessing opportunities in Brunei.

Information on doing business and opportunities in Brunei

Australia-Brunei Darussalam Business Council

The Australia-Brunei Darussalam Business Council (ABBC) 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.

High level visits

October 2013: Prime Minister the Hon Tony Abbott visited Brunei for the 8th East Asia Summit.

2013: A number of other high-level Australian visits were made to Brunei to coincide with Brunei’s chairing of ASEAN and EAS meetings.

Jully 2013: Then Minister for Foreign Affairs, the Hon, Senator Bob Carr, for the 20th ASEAN Regional Forum (ARF) and 3rd East Asia Summit Foreign Ministers’ Meeting.

August 2013:  Then Minister for Defence, the Hon Stephen Smith for the 2nd ASEAN Defence Ministers’ Plus Meeting (ADMM+).

May 2013: His Majesty the Sultan of Brunei made a State Visit to Australia. Prior to that, he visited in October 2011 to attend the Commonwealth Heads of Government Meeting in Perth, and in September 2007 for the APEC Summit in Sydney. His first official visit to Australia was in February 2005.

October 2012: Then Governor-General, H.E Ms Quentin Bryce, visited Brunei.

July 2012: Brunei’s Second Minister for Foreign Affairs and Trade, Pehin Lim Jock Seng, and Minister for Energy at the Prime Minister's Office, Pehin Yasmin, visited Australia.

February 2012: Brunei's Deputy Minister for Defence, Dato Mustappa visited Australia.

August 2012: Then Parliamentary Secretary for Pacific Island Affairs and Foreign Affairs, the Hon Richard Marles MP, visited Brunei.

October 2010: Then Parliamentary Secretary for Sustainability and Urban Water, Senator the Hon Don Farrell, visited Brunei to attend the second EAS Environment Ministers' Meeting.

September 2011: Then Minister for Resources and Energy, the Hon Martin Ferguson AM MP, visited Brunei to attend the fifth EAS Energy Ministers' Meeting.