The party is over for oil-rich Brunei

The party is over for oil-rich Brunei

By Frank Brandmaier

BANDAR SERI BEGAWAN (DPA): The small nation of Brunei appears to be a mixture of the legendary 1,001 Nights and the Guinness Book of Records.

Until a few years ago, Brunei's ruler, Sultan Hassanal Bolkiah, was regarded as the world's richest man -- one who muttered to himself as he roamed about the globe's largest residential palace, holding court under golden roofs.

The royal family gave a gigantic park to the people of Brunei as a place where they could spend their leisure hours. It also gave them freedom from taxation, free education and training, and medical care. But the love of splendor and mismanagement combined to draw dark clouds over the nation. The party is over for Brunei.

Income from the vast oil reserves off the coast of the Southeast Asian island of Borneo is still impressive. The coastal oil wells are the source of US$6 million of daily revenue for the royal coffers. That's a rate of $250,000 an hour.

However, as one Western diplomat put it, "They have only just began to add up the precise costs."

It's not only the certainty that some day the source of oil will dry up; it's also the rising unemployment, especially among the young in the feudal nation of 310,000 people, that have created a mood of depression.

Until it collapsed two years ago, Brunei's largest enterprise, Amedeo, a construction and real estate company, had reported it was $15 billion in the red. Its deficit was built up by its leader, the youngest brother of the sultan, Prince Jefri. Even in Brunei such a sum makes the mighty grow pale.

Prince Jefri became the symbolic figure for the squandering by Brunei of its oil-derived wealth. In the past 10 years, he spent, according to independent assessments, $2.7 billion for such items as 17 planes, a number of yachts, about 2,000 cars and almost too much jewellery to be counted.

The government of Brunei and Jefri reached outside the court process an agreement with a dollar value that was not revealed. The prince, however, had to move away from the immediate vicinity of the sultan's palace.

A man familiar with the ways of Brunei said the nation can no longer afford another spendthrift like Jefri.

A self-appointed economic council in the capital Bandar Seri Begawan has recommended the expansion of rain-forest tourism as well as the establishment of financial services and oil processing sectors.

A diplomat said that Brunei is at a turning point and that any new course it might take has only begun to be considered, without any decisions yet made.

The sultanate of Brunei is only at the very beginning of the process. Visitors to the monumental Jerudong amusement park outside the capital often have its modern carousel mostly for themselves.

Brunei's international airport is 10 times larger than its actual needs, according to a recent estimate, and its hotels are only used at about 20 percent capacity, except during such events as the recent Asian-Pacific summit held in Bandar Seri Begawan.

The goal of attracting one million tourists to Brunei is "illusory", a Westerner familiar with the small sultanate said.

But "the Kuwait of the Far East", as Brunei has been described, is not facing the prospect of being reduced to beggary. Its per-capita gross domestic product of $18,000 is exceeded only in Southeast Asia by Singapore. And Brunei nationals are unlikely to lose their tax-free status soon.

The first traces of red pencils have been made on smaller dimensions. Stipendiums are no longer guaranteed by the state and a two-dollar fee is being charged per person for a round of fun at Jerudong park. "The time for free entertainment is past," a European resident of the Brunei capital said.