Brunei takes cautious steps to welcome outside world
Brunei takes cautious steps to welcome outside world
By Dean Visser
BANDAR SERI BEGAWAN, Brunei (AP): Brunei may be the closest thing to a fairy-tale kingdom left in today's world. But recent economic shocks are nudging this rich, sleepy sultanate toward a new reality.
Asia's financial crisis, and a renegade prince who gutted the tiny country's largest company last year, have shaken a deep faith in Brunei's massive oil economy and its revered royal family.
The pious Islamic monarchy in the Borneo jungle has long seemed content to be left alone to enjoy a choice between new cars and modern buildings or ancient fishing villages and wooden canoes.
But it stepped into the limelight as host of the Southeast Asia Games this week, and next year will host the massive Asia Pacific Economic Cooperation summit with 21 world leaders. Both are high-profile events geared to draw tourists and much-needed foreign investors.
"Five years ago, you wouldn't have heard the word 'tourism' in Brunei. But now the government is trying to develop it," said Sheik Jamaluddin, Brunei's director of industrial promotion and tourism development.
"But we are not going to open our doors wide and let everybody in. We'll control it," he said, likening unchecked tourism to a "cancer" that has hit other Asian countries with environmental ruin and cultural corruption.
Aside from its lavish mosques, Brunei has few tourist attractions. Bars and discos are outlawed -- as is alcohol -- and everything is fiercely expensive. But officials hope the virgin rain forest covering 80 percent of the country can boost ecotourism.
The country also wants the SEA Games to advertise Brunei as a venue for more international sporting events, creating "sports tourism," Jamaluddin said.
Brunei's modern feudalism -- supported by vast oil reserves and protected by an all-powerful, benevolent sultan -- once seemed a solid economic fortress.
But the recent collapse of neighboring Southeast Asian economies gave Brunei, one of the world's richest but most isolated countries, a rude shock.
Oil prices plummeted. The Brunei dollar lost 15 percent of its value against the U.S. greenback. The state-run Brunei Investment Agency (BIA) heavily invested overseas and saw its portfolio returns battered. Brunei's gross domestic product growth fell to 1 percent in 1998, from 4 percent in 1997.
Matters worsened last year with the collapse of the largest private company, Amedeo Development Corp., run by the sultan's brother, Prince Jefri Bolkiah.
Amedeo lost an estimated US$16 billion -- and there were suggestions that the firm may have siphoned money from the BIA, which Jefri also formerly headed.
The government could not ignore the psychological and economic effects of the crises on Bruneians, who are used to material comforts and have long placed their well-being in the hands of the royal family without question.
"The middle class was affected, quite significantly this time around, for the first time ever," said John Funston, a researcher at Singapore's Institute of Southeast Asian Studies. "The sale of motorcars and things like that suddenly ground to a halt."
Along with boosting tourism, the government is studying nearby Singapore's development strategy of generous tax incentives and other perks for multinational companies as a way of adding to its oil and gas base, Jamaluddin said.
"We're looking to improve our incentive package," he said, adding that this could mean a reduction in Brunei's 30 percent corporate tax. The country has no personal income tax, for citizens or foreigners.
Though observers have noted Brunei's attempts to diversify its economy, many say they will believe it when they see it.
"They're too concentrated on the petroleum products. They haven't really made any major movement into other industries," said Leslie Law, a Singapore-based analyst at research house Independent Economic Analysis.
"Although they've been talking about (diversification) for ages, you don't really see anything," Law said.