Brunei Thrives Amid Asian Slump

Economic crisis? What economic crisis?

While neighboring economies have tanked throughout Southeast Asia, Brunei is going gangbusters. The tiny country on the northwest coast of Borneo is a lender of money, not a borrower. It has no national debt, a minuscule jobless rate and foreign exchange reserves estimated at $30 billion.

Fresh beef arrives daily in Bandar Seri Begawan, the capital, from a government-owned cattle ranch in Australia that is bigger than Brunei itself. Deals Restaurant in the Sheraton Hotel flies in live lobsters from Boston every Thursday. New projects are going ahead on schedule, and construction cranes dot the skyline of this attractive, modern capital on the South China Sea.

Brunei can count its blessings on two fingers. One is oil, the other a small population. Together, they have enabled the populist and absolute monarch, Sultan Sir Hassanal Bolkiah, to offer his subjects a cradle-to-grave security that is the envy of Malays and Thais and Indonesians who are seeing jobs disappear, companies fold and currencies plummet.

Education, health care, houses and domestic telephone service are free. The amusement park charges not a cent for admission or rides. Food and utilities are subsidized. Low-cost auto loans are available, and almost everyone drives a nice car. Anyone can have a government job. Seventy percent of the work force is employed in the public sector. The retirement age is 55. And no citizen of Brunei has to do any heavy lifting or bus any dishes--those jobs are handled by laborers from Thailand, the Philippines, Bangladesh or India.

“I’ve heard the other countries are having problems, but business is humming here,” said Ahmad Bin Ibrahim, who owns the spiffy Toyota taxi he drives. “If you make a million dollars in Brunei, at the end of the day you keep it all. We don’t have any income tax.”

Because of good fortune as much as prudent planning, hardly a ripple of Asia’s crisis has reached Brunei. Its income from oil--160,000 barrels a day--and natural gas is paid in U.S. dollars and represents huge revenue for a Delaware-sized country with about 300,000 occupants. Their per capita income of about $18,000 a year is among the world’s highest.

“It seems like a very comfortable place,” former Secretary of State Warren Christopher said with diplomatic understatement after dining with the sultan and his two wives in 1995. (His wives, one a first cousin, the other a former flight attendant, live in separate palaces and between them have given birth to the sultan’s 10 children.)

Exactly how the country’s income is divvied up is a state secret in Brunei, and the line between the treasury and the sultan’s personal checking account has always been a fuzzy one. But clearly there are no restraints of any sort on the royal family and no decisions of any consequence that are not made by the sultan himself.

Sultan Bolkiah, 51, the 29th ruler in a 500-year-old dynasty, watches over the rapid development of this onetime isolated backwater from a $350-million, 1,800-room palace of gold, teak and marble that has a throne room with 500 chandeliers and a banquet hall that can seat thousands.

One of the world’s richest men--Fortune magazine estimated his fortune at $37 billion--the sultan has 220 luxury cars, a fleet of aircraft and a stable of 200 polo ponies, some kept in air-conditioned stalls. Remarkably, he is still a hands-on manager of national affairs who appears not to have lost touch with the common people.

He opens his palace gates on the last day of Ramadan, the holy Islamic month of fasting, and personally shakes hands with every one of the 70,000 or so people who pour in. Each is rewarded with a picnic basket and a $10 bill. He tours rural villages, is seen at various events around town and has been known to stop people in the street, asking what needs fixing in their lives.

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Once part of a 16th century empire that extended through Borneo to the Philippines and later, from 1888 to 1984, was under Britain’s wing, Brunei today is in effect a family corporation with the sultan as CEO. The sultan, who is also prime minister and defense minister, decides how the money is spent.

Brunei’s oil reserves are expected to run out in 15 to 20 years, natural gas in 50 to 60 years.

In preparation for learner times, the sultan has set up the Brunei Investment Agency, with offices in London, New York and Tokyo. Although its multibillion-dollar portfolio is kept secret, BIA’s investments are generally regarded as conservatively savvy and include government securities and prime real estate, such as the Dorchester Hotel in London and the Beverly Hills Hotel.

“You don’t find any smugness here over that fact that Brunei is in so much better shape than its neighbors, because Bruneians never had a see-I-told-you-so attitude,” a European diplomat said. “Brunei is an anomaly in Southeast Asia, and everyone accepts that.”

And Brunei is a good neighbor. The sultan contributed to Thailand’s recent bailout package and bought Malaysian currency, ringgit, in an attempt to help prop up Malaysia’s economy. He also is a staunch U.S. ally.

Democracy is not on the agenda here--the last parliamentary elections were in 1962--but with everyone prospering, foreign diplomats detect not a hint of grumbling.