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.