‘Rich, Small’ Brunei Gives Shultz a Palatial Stopover

Sultan Muda Hassanal Bolkiah, absolute ruler of this Delaware-sized nation made rich by undersea oil and natural gas deposits, entertained U.S. Secretary of State George P. Shultz on Tuesday in his 1,788-room palace of inlaid marble, Philippine mahogony and gold glass mosaics.

On his way to Manila, Shultz spent only about three hours in this country, which probably has the highest per capita income in the world, but the visit was packed with more color, puzzles and contrasts than the secretary of state usually encounters in a month of routine diplomacy.

Brunei--consisting of twin enclaves on the north coast of the island of Borneo and known officially as Brunei Darussalam--is out to diversify its relationship with the outside world after being dominated for almost a century by Britain.

The United States, for its part, is always ready to do business with an anti-Communist country, especially one that has no need for foreign aid.

‘A Strong Relationship’

“We have a strong bilateral relationship between the United States and Brunei,” Shultz told Brunei television after the meeting. “I think that through our discussions, we’ve moved to strengthen it.”

In truth, however, that relationship started from scratch less than three years ago when the United States first established diplomatic relations with the newly independent sultanate. The U.S. Embassy staff consists of just six Americans, including the ambassador, which makes it one of the smallest in the world. Brunei has just one graduate of a U.S. university, although about two dozen senior bureaucrats are now being trained in the United States.

“It is a country that we know very little about and that knows very little about us,” a senior State Department official said.

The official said Brunei “is a small place with small problems.” But, like the rich everywhere, Brunei is concerned that someone might try to take its wealth away.

‘Very Rich, Very Small’

“It is a very rich and very small country,” the official said. “Of course it feels vulnerable.”

A British protectorate from 1888 until it gained independence in 1983, Brunei continues to look first to London in its foreign relations. But there are growing indications that the sultan would also like closer ties to Washington.

Brunei maintains diplomatic relations with just 14 nations. It does not have ties to any Soviet Bloc country.

Sultan Hassanal, who will be 40 years old next month, lives in the world’s largest palace, a recently opened place that the Hyatt Regency or Mariott hotel chains might have produced if they had unlimited money to spend. It is a curious mixture of modern architecture and the traditional trappings of royalty.

Shacks on Stilts

In contrast, about 25,000 people--more than 10% of the national population--live in wooden shacks built on stilts in the Brunei River that can be reached only by boat. But even the residents of the teeming Kampong Ayer “water village” have far more money than most Third World people.

“You might think that people who live in houses perched in the river are poor, but they park their BMWs on the shore,” the State Department official said.

Islam is the state religion, and such manifestations of Islamic fundamentalism as head scarves for women are becoming more common. The country’s lunch counters feature alcohol-free beer in accordance with Muslim strictures against drinking. But a well-stocked liquor store near the U.S. Embassy offered dozens of premium brands of Scotch and other beverages.

Even the collapse of petroleum prices, which has forced such oil-rich countries as Saudi Arabia into unaccustomed flirtations with austerity, seems to have left Brunei unscathed.

Not Many Expenses

To be sure, national revenue, all of it generated by oil and gas, is down. But with a population of no more than 200,000, Brunei does not have much in the way of expenses. The government continues to show a surplus, and it may have as much as $20 billion in the bank.

Most economic statistics in Brunei are considered government secrets, so estimates tend to vary widely. For instance, the sultan spent somewhere between $250 million and $500 million to build his palace. Most estimates are in the $400-million range.

The Bechtel Corp. of San Francisco, which Shultz once headed, participated in the construction of the palace, which features some rooms big enough to hold a football field and an outdoor dining area that can seat 4,500 people at a time.