OFFICIAL NAME:
Negara Brunei Darussalam

Geography
Area: 5,769 sq. km. (2,227 sq. mi.), slightly larger than Delaware.
Cities: Capital--Bandar Seri Begawan.
Terrain: East--flat coastal plains with beaches; west--hilly with a few mountain ridges.
Climate: Equatorial; high temperatures, humidity, and rainfall.

People
Nationality: Noun and adjective--Bruneian(s).
Population (2001 est.): 360,000.
Annual growth rate: 2.2%.
Ethnic groups: Malay, Chinese, other, indigenous groups.
Religion: Islam.
Languages: Malay, English, Chinese; Iban and other indigenous dialects.
Education: Years compulsory--9. Literacy (2001)--92.5%.
Health: Life expectancy--74 yrs. Infant mortality rate (2000)--7.3/1,000.

Government
Type: Malay Islamic Monarchy.
Independence: January 1, 1984.
Constitution: 1959.
Branches: Executive--Sultan is both head of state and Prime Minister, presiding over a nine-member cabinet. Legislative--a Legislative Council has been reactivated after a 20-year suspension to play an advisory role for the Sultan. Judicial
(based on Indian penal code and English common law)--magistrate's
courts, High Court, Court of Appeals, Judicial Committee of the Privy
Council (sits in London).
Subdivisions: Four districts--Brunei-Muara, Belait, Tutong, and Temburong.

Economy
GDP (2002): $4.55 billion.
Growth rate (2002 est.): 3.0%.
Natural resources: Oil and natural gas.
Trade: Exports--oil, liquefied natural gas, petroleum products, garments. Major markets--Japan, Korea, ASEAN, U.S. Imports--machinery and transport equipment, manufactured goods. Major suppliers--ASEAN, Japan, U.S., EU.

PEOPLE
Many
cultural and linguistic differences make Brunei Malays distinct from
the larger Malay populations in nearby Malaysia and Indonesia, even
though they are ethnically related and share the Muslim religion.

Brunei has hereditary
nobility, carrying the title Pengiran. The Sultan can award to
commoners the title Pehin, the equivalent of a life peerage awarded in
the United Kingdom. The Sultan also can award his subjects the Dato,
the equivalent of a knighthood in the United Kingdom, and Datin, the
equivalent of damehood.

Bruneians adhere to the
practice of using complete full names with all titles, including the
title Haji (for men) or Hajjah (for women) for those who have made the
Haj pilgrimage to Mecca. Many Brunei Malay women wear the tudong, a
traditional head covering. Men wear the songkok, a traditional Malay
cap. Men who have completed the Haj wear a white songkok.

The requirements to attain
Brunei citizenship include passing tests in Malay culture, customs, and
language. Stateless permanent residents of Brunei are given
International Certificates of Identity, which allow them to travel
overseas. The majority of Brunei's Chinese are permanent residents, and
many are stateless. An amendment to the National Registration and
Immigration Act of 2002 allowed female Bruneian citizens for the first
time to transfer their nationality to their children.

Oil wealth allows the
Brunei Government to provide the population with one of Asia's finest
health care systems. Malaria has been eradicated, and cholera is
virtually nonexistent. There are three general hospitals--in Bandar
Seri Begawan, Tutong, and Kuala Belait--and there are numerous health
clinics throughout the country.

Education starts with
preschool, followed by 6 years of primary education and up to 6 years
of secondary education. Nine years of education are mandatory. Most of
Brunei's college students attend universities and other institutions
abroad, but approximately 2,867 study at the University of Brunei
Darussalam. Opened in 1985, the university has a faculty of more than
300 instructors and is located on a sprawling campus overlooking the
South China Sea.

The official language is
Malay, but English is widely understood and used in business. Other
languages spoken are several Chinese dialects, Iban, and a number of
native dialects. Islam is the official religion, but religious freedom
is guaranteed under the constitution.

HISTORY
Historians
believe there was a forerunner to the present Brunei Sultanate, which
the Chinese called Po-ni. Chinese and Arabic records indicate that this
ancient trading kingdom existed at the mouth of the Brunei River as
early as the seventh or eighth century A.D. This early kingdom was
apparently conquered by the Sumatran Hindu Empire of Srivijaya in the
early ninth century, which later controlled northern Borneo and the
Philippines. It was subjugated briefly by the Java-based Majapahit
Empire but soon regained its independence and once again rose to
prominence.

The Brunei Empire had its
golden age from the 15th to the 17th centuries, when its control
extended over the entire island of Borneo and north into the
Philippines. Brunei was particularly powerful under the fifth sultan,
Bolkiah (1473-1521), who was famed for his sea exploits and even
briefly captured Manila; and under the ninth sultan, Hassan (1605-19),
who fully developed an elaborate Royal Court structure, elements of
which remain today.

After Sultan Hassan, Brunei
entered a period of decline due to internal battles over royal
succession as well as the rising influences of European colonial powers
in the region that, among other things, disrupted traditional trading
patterns, destroying the economic base of Brunei and many other
Southeast Asian sultanates. In 1839, the English adventurer James
Brooke arrived in Borneo and helped the Sultan put down a rebellion. As
a reward, he became governor and later "Rajah" of Sarawak in northwest
Borneo and gradually expanded the territory under his control.

Meanwhile, the British
North Borneo Company was expanding its control over territory in
northeast Borneo. In 1888, Brunei became a protectorate of the British
Government, retaining internal independence but with British control
over external affairs. In 1906, Brunei accepted a further measure of
British control when executive power was transferred to a British
resident, who advised the ruler on all matters except those concerning
local custom and religion.

In 1959, a new constitution
was written declaring Brunei a self-governing state, while its foreign
affairs, security, and defense remained the responsibility of the
United Kingdom. An attempt in 1962 to introduce a partially elected
legislative body with limited powers was abandoned after the opposition
political party, Partai Rakyat Brunei, launched an armed uprising,
which the government put down with the help of British forces. In the
late 1950s and early 1960s, the government also resisted pressures to
join neighboring Sabah and Sarawak in the newly formed Malaysia. The
Sultan eventually decided that Brunei would remain an independent
state.

In 1967, Sultan Omar
abdicated in favor of his eldest son, Hassanal Bolkiah, who became the
29th ruler. The former Sultan remained as Defense Minister and assumed
the royal title Seri Begawan. In 1970, the national capital, Brunei
Town, was renamed Bandar Seri Begawan in his honor. The Seri Begawan
died in 1986.

On January 4, 1979, Brunei
and the United Kingdom signed a new treaty of friendship and
cooperation. On January 1, 1984, Brunei Darussalam became a fully
independent state.

GOVERNMENT AND POLITICAL CONDITIONS
Under
Brunei's 1959 constitution, the Sultan is the head of state with full
executive authority, including emergency powers since 1962. The Sultan
is assisted and advised by five councils, which he appoints. A Council
of Ministers, or cabinet, which currently consists of nine members
(including the Sultan himself), assists in the administration of the
government. The Sultan presides over the cabinet as Prime Minister and
also holds the positions of Minister of Defense and Minister of
Finance. One of the Sultan's brothers, Prince Mohamed, serves as
Minister of Foreign Affairs.

Brunei's legal system is
based on English common law, with an independent judiciary, a body of
written common law judgments and statutes, and legislation enacted by
the sultan. The local magistrates’ courts try most cases. More serious
cases go before the High Court, which sits for about 2 weeks every few
months. Brunei has an arrangement with the United Kingdom whereby
United Kingdom judges are appointed as the judges for Brunei's High
Court and Court of Appeal. Final appeal can be made to the Judicial
Committee of the Privy Council in London in civil but not criminal
cases. Brunei is in the process of merging its British style civil law,
which is expected to be completed by the end of 2004.

The Government of Brunei
assures continuing public support for the current form of government by
providing economic benefits such as subsidized food, fuel, and housing;
free education and medical care; and low-interest loans for government
employees. The Sultan said in a 1989 interview that he intended to
proceed, with prudence, to establish more liberal institutions in the
country and that he would reintroduce elections and a legislature when
he "[could] see evidence of a genuine interest in politics on the part
of a responsible majority of Bruneians." In 1994, a constitutional
review committee submitted its findings to the Sultan, but these have
not been made public.

Brunei's economy is almost
totally supported by exports of crude oil and natural gas. The
government uses its earnings in part to build up its foreign reserves,
which at one time reportedly reached more than $30 billion. The
country's wealth, coupled with its membership in the United Nations,
Association of Southeast Asian Nations (ASEAN), the Asia Pacific
Economic Cooperation (APEC) forum, and the Organization of the Islamic
Conference give it an influence in the world disproportionate to its
size.

Principal Government Officials
Sultan and Yang di-Pertuan, Prime Minister, Minister of Defense, and Minister of Finance--His Majesty Sultan Hassanal Bolkiah
Minister of Foreign Affairs--His Royal Highness Prince Mohamed Bolkiah
Ambassador to the United States--Pengiran Anak Dato Haji Puteh
Ambassador to the United Nations--Awang Haji Shofry bin Haji Abd. Ghafor

Brunei Darussalam maintains an embassy in the United States at 3520 International Court, NW, Washington, DC 20008; tel. 202-237-1838.

ECONOMY
The
Asian financial crisis in 1997-98, coupled with fluctuations in the
price of oil have created uncertainty and instability in Brunei's
economy. In addition, the 1998 collapse of the Amedeo Development
Corporation, Brunei's largest construction firm whose projects helped
fuel the domestic economy, caused the country to slip into a mild
recession.

Brunei is the third-largest
oil producer in Southeast Asia, averaging about 200,000 barrels a day.
It also is the fourth-largest producer of liquefied natural gas in the
world. Brunei's gross domestic product (GDP) soared with the petroleum
price increases of the 1970s to a peak of $5.7 billion in 1980. It
declined slightly in each of the next 5 years, then fell by almost 30%
in 1986.

This drop was caused by a
combination of sharply lower petroleum prices in world markets and
voluntary production cuts in Brunei. The GDP recovered somewhat since
1986, growing by 12% in 1987, 1% in 1988, and 9% in 1989. In recent
years, GDP growth was 4.0% in 1997, 1.0% in 1998, 2.5% in 1999, and an
estimated 3.0% in 2000. However, the 2000 GDP was about $4.65 billion,
still below the 1980 peak.

In the 1970s, Brunei
invested sharply increasing revenues from petroleum exports and
maintained government spending at a low and constant rate.
Consequently, the government was able to build its foreign reserves and
invest them around the world to help provide for future generations.
Part of the reserve earnings was reportedly also used to help finance
the government's annual budget deficit. Since 1986, however, petroleum
revenues have decreased, and government spending has increased. Until
2000, the government ran a budget deficit since 1988.

Brunei Shell Petroleum
(BSP), a joint venture owned in equal shares by the Brunei Government
and the Royal Dutch/Shell group of companies, is the chief oil and gas
production company in Brunei. It also operates the country's only
refinery. BSP and four sister companies constitute the largest employer
in Brunei after the government. BSP's small refinery has a distillation
capacity of 10,000 barrels per day. This satisfies domestic demand for
most petroleum products.

The French oil company ELF
Aquitaine became active in petroleum exploration in Brunei in the
1980s. Known as Elf Petroleum Asia BV, it has discovered commercially
exploitable quantities of oil and gas in three of the four wells
drilled since 1987, including a particularly promising discovery
announced in early 1990. Brunei is preparing to tender concessions for
deepwater oil and gas exploration. In 2003, Malaysia disputed
Brunei-awarded oil exploration concessions, which led to both countries
ceasing exploration activities. Negotiations between the two countries
are continuing in order to resolve the conflict.

Brunei's oil production
peaked in 1979 at more than 240,000 barrels per day. Since then it has
been deliberately cut back to extend the life of oil reserves and
improve recovery rates. Petroleum production is currently averaging
200,000 barrels per day. Japan has traditionally been the main customer
for Brunei's oil exports, and in 1999 took in about 50.3% of Brunei's
export production, followed by the United States (13.9%), Korea (13.5%)
and Thailand (13.3%). Other major customers include Taiwan and the
countries of ASEAN.

Almost all of Brunei's
natural gas is liquefied at Brunei Shell's Liquefied Natural Gas (LNG)
plant, which opened in 1972 and is one of the largest LNG plants in the
world. Some 88% of Brunei's LNG produced is sold to Japan under a
long-term agreement renewed in 1993. The agreement calls for Brunei to
provide over 5 million tons of LNG per year to three Japanese
utilities. The Japanese company, Mitsubishi, is a joint venture partner
with Shell and the Brunei Government in Brunei LNG, Brunei Coldgas, and
Brunei Shell Tankers, which together produce the LNG and supply it to
Japan. Since 1995, Brunei has supplied more than 700,000 tons of LNG to
the Korea Gas Corporation as well. In 1999, Brunei's natural gas
production reached 90 cargoes per day. A small amount of natural gas is
used for domestic power generation. Brunei is the fourth-largest
exporter of LNG in the Asia-Pacific region behind Indonesia, Malaysia,
and Australia.

Brunei's proven oil and gas
reserves are sufficient until at least 2015, and planned deep-sea
exploration is expected to find significant new reserves. The
government sought in the past decade to diversify the economy with
limited success. Oil and gas and government spending still account for
most of Brunei's economic activity. Brunei's non-petroleum industries
include agriculture, forestry, fishing, and banking. The Brunei
Economic Development Board announced plans in 2003 to use proven gas
reserves to establish downstream industrial projects. A 500-megawatt
(MW) power plant is to be built in the Sungai Liang region to power an
aluminum smelting plant. A second major project in the planning stage
is a giant container hub at the Muara Port facilities. Both projects
depend on foreign direct investors.

The government regulates
the immigration of foreign labor out of concern it might disrupt
Brunei's society. Work permits for foreigners are issued only for short
periods and must be continually renewed. Despite these restrictions,
foreigners make up a significant portion of the work force. The
government reported a total work force of 158,000 in 2002, with an
official unemployment rate of 4.6%.

Oil and natural gas account
for almost all exports. Since only a few products other than petroleum
are produced locally, a wide variety of items must be imported. Brunei
statistics show Singapore as the largest point of origin of imports,
accounting for 28.5% in 1999. However, this figure includes some
transshipment, since most of Brunei's imports transit Singapore. Japan
and Malaysia were the second-largest suppliers. As in many other
countries, Japanese products dominate local markets for motor vehicles,
construction equipment, electronic goods, and household appliances. The
United States was the third-largest supplier of imports to Brunei in
1998.

Brunei's substantial
foreign reserves are managed by the Brunei Investment Agency (BIA), an
arm of the Ministry of Finance. BIA's guiding principle is to increase
the real value of Brunei's foreign reserves while pursuing a diverse
investment strategy, with holdings in the United States, Japan, Western
Europe, and the Association of Southeast Asian Nations (ASEAN)
countries.

The Brunei Government
encourages more foreign investment. New enterprises that meet certain
criteria can receive pioneer status, exempting profits from income tax
for up to 5 years, depending on the amount of capital invested. The
normal corporate income tax rate is 30%. There is no personal income
tax or capital gains tax.

One of the government's
priorities is to encourage the development of Brunei Malays as leaders
of industry and commerce. There are no specific restrictions of foreign
equity ownership, but local participation, both shared capital and
management, is encouraged. Such participation helps when tendering for
contracts with the government or Brunei Shell Petroleum.

Companies in Brunei must
either be incorporated locally or registered as a branch of a foreign
company and must be registered with the Registrar of Companies. Public
companies must have a minimum of seven shareholders. Private companies
must have a minimum of two but not more than 50 shareholders. At least
half of the directors in a company must be residents of Brunei.

The government owns a
cattle farm in Australia through which the country’s beef supplies are
processed . At 2,262 square miles, this ranch is larger than Brunei
itself. Eggs and chickens are largely produced locally, but most of
Brunei's other food needs must be imported. Agriculture and fisheries
are among the industrial sectors that the government has selected for
highest priority in its efforts to diversify the economy.

Recently the government has
announced plans for Brunei to become an international offshore
financial center as well as a center for Islamic banking. Brunei is
keen on the development of small and medium enterprises and also is
investigating the possibility of establishing a "cyber park" to develop
an information technology industry. Brunei also fostered tourism
through its "Visit Brunei 2001" campaign, which has been sustained into
the current year, which has shown a slight increase in tourist arrival.

DEFENSE
The
Sultan is both Minister of Defense and Supreme Commander of the Armed
Forces (RBAF). All infantry, navy, and air combat units are made up of
volunteers. There are two infantry brigades, equipped with armored
reconnaissance vehicles and armored personnel carriers and supported by
Rapier air defense missiles and a flotilla of coastal patrol vessels
armed with surface-to-surface missiles.

Brunei has a defense
agreement with the United Kingdom, under which a British Armed Forces
Ghurka battalion (1,500 men) is permanently stationed in Seria, near
the center of Brunei's oil industry. The RBAF has joint exercises,
training programs, and other military cooperation with the United
Kingdom and many other countries, including the United States. The U.S.
and Brunei signed a memorandum of understanding (MOU) on defense
cooperation in November 1994. The two countries conduct an annual
military exercise called CARAT.

FOREIGN RELATIONS
Brunei
joined ASEAN on January 7, 1984--one week after resuming full
independence--and gives its ASEAN membership the highest priority in
its foreign relations. Brunei joined the UN in September 1984. It also
is a member of the Organization of the Islamic Conference (OIC) and of
the Asia-Pacific Economic Cooperation (APEC) forum. Brunei hosted the
APEC Economic Leaders' Meeting in November 2000.

U.S.-BRUNEI RELATIONS
Relations
between the United States and Brunei date from the 1800s. On April 6,
1845, the U.S.S. Constitution visited Brunei. The two countries
concluded a Treaty of Peace, Friendship, Commerce and Navigation in
1850, which remains in force today. The United States maintained a
consulate in Brunei from 1865 to 1867.

The U.S. welcomed Brunei
Darussalam's full independence from the United Kingdom on January 1,
1984, and opened an Embassy in Bandar Seri Begawan on that date. Brunei
opened its embassy in Washington in March 1984. Brunei's armed forces
engage in joint exercises, training programs, and other military
cooperation with the U.S. A memorandum of understanding on defense
cooperation was signed on November 29, 1994.

Principal U.S. Embassy Officials
Ambassador--Gene B. Christy
Deputy Chief of Mission—Jeffery Hawkins
Management/Consular Officer--Audrey K. Lee

The U.S. Embassy

in Bandar Seri Begawan is located on the third & fifth floors of
the Teck Guan Plaza, at the corner of Jalan Sultan and Jalan MacArthur;
tel: 673-2229670; fax: 673-2225293; e-mail: usembassy_bsb@state.gov

TRAVEL AND BUSINESS INFORMATION
The
U.S. Department of State's Consular Information Program provides
Consular Information Sheets, Travel Warnings, and Public Announcements.
Consular Information Sheets exist for all countries and include
information on entry requirements, currency regulations, health
conditions, areas of instability, crime and security, political
disturbances, and the addresses of the U.S. posts in the country. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Public Announcements

are issued as a means to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas
that pose significant risks to the security of American travelers. Free
copies of this information are available by calling the Bureau of
Consular Affairs at 202-647-5225 or via the fax-on-demand system:
202-647-3000. Consular Information Sheets and Travel Warnings also are
available on the Consular Affairs Internet home page: http://travel.state.gov.
Consular Affairs Tips for Travelers publication series, which contain
information on obtaining passports and planning a safe trip abroad, are
on the Internet and hard copies can be purchased from the
Superintendent of Documents, U.S. Government Printing Office,
telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning
Americans traveling abroad may be obtained from the Office of Overseas
Citizens Services at (202) 647-5225. For after-hours emergencies,
Sundays and holidays, call 202-647-4000.

The National Passport Information Center
(NPIC) is the U.S. Department of State's single, centralized public
contact center for U.S. passport information. Telephone: 1-877-4USA-PPT
(1-877-487-2778). Customer service representatives and operators for
TDD/TTY are available Monday-Friday, 8:00 a.m. to 8:00 p.m., Eastern
Time, excluding federal holidays.

Travelers can check the latest health
information with the U.S. Centers for Disease Control and Prevention in
Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web
site at http://www.cdc.gov/travel/index.htm
give the most recent health advisories, immunization recommendations or
requirements, and advice on food and drinking water safety for regions
and countries. A booklet entitled Health Information for International
Travel (HHS publication number CDC-95-8280) is available from the U.S.
Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa
requirements, currency and customs regulations, legal holidays, and
other items of interest to travelers also may be obtained before your
departure from a country's embassy and/or consulates in the U.S. (for
this country, see "Principal Government Officials" listing in this
publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register their travel via the State Department’s travel registration web site at https://travelregistration.state.gov

or at the Consular section of the U.S. embassy upon arrival in a
country by filling out a short form and sending in a copy of their
passports. This may help family members contact you in case of an
emergency.


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