Brunei Darussalam: Foreign Affairs at Centre Stage, particularly the Offshore Dispute with Malaysia (Third Quarter '03)


Dr AVM Horton

The first of August 2003 marked the thirty-fifth anniversary of the coronation of Sultan Hassanal Bolkiah, who ascended to the throne in October 1967. A eulogy to His Majesty was posted on the government’s official website on 4 August. In addition to his duties as Head of State, His Majesty is also the (un-elected) Prime Minister of Negara Brunei Darussalam (NBD) and holds many other offices besides, such as Minister of Finance, Head of Islam, Commander-in-Chief, Inspector-General of Police and Chancellor of the local university. No democratic general election has ever been held in the sultanate, the closest approximation coming as long ago as August 1962, during the reign of His Majesty's father when polls were held for a small number of elective seats on the Legislative Council. Unfortunately, the 'wrong' party swept the board. As a result, the putative parliament was prorogued at the first opportunity and eventually abolished altogether.

Although offences against democracy have been cited as good and sufficient reason for other countries to be expelled or suspended from the Commonwealth, such considerations seem not to apply to NBD. Hence in mid-September Bandar Seri Begawan was able to play host to a meeting of the Commonwealth's finance ministers. The fate of six hundred million absolute poor in the Commonwealth was the main item on the agenda. A road in the capital is to be re-named 'Commonwealth Drive' in honour of the event.

The sultanate was also the venue for the fifteenth General Meeting of the Pacific Economic Cooperation Council (PECC), held in early September. In October, HM the Sultan attended in quick succession summits of ASEAN, the OIC and APEC. Diplomatic relations were established with Luxembourg on 18 July. At the fifty-eighth UN General Assembly in New York HRH Prince Mohamad Bolkiah, (un-elected) Foreign Minister of NBD since 1984, highlighted the 'urgent need' for UN reform; the organisation ought, he argued, 'reflect today's world rather than the world of half a century ago'. HRH Princess Masna, Ambassador-at-Large, visited China in August. Pehin Dato Haji Abdul Rahman, Minister of Industry and Primary Resources, attended the WTO ministerial meeting at Cancún.

The main problem in foreign affairs continues to be the offshore dispute with Malaysia, which has still not been settled. The Borneo Bulletin could detect only a 'glimmer of hope' of a resolution; meanwhile, oil exploration activity in the affected area remains suspended. Yet personal relations between Sultan Bolkiah and the Malaysian Prime Minister (Dr Mahathir) appear to be good; regular social meetings between the two leaders are reported by the media. Even discounting legendary Malay courtesy and the possibility of exercises in public relations, such encounters would presumably have been intolerable had the leaders been at daggers-drawn. At the Islamic (OIC) summit in Kuala Lumpur in October, moreover, His Majesty went out of his way to praise both Malaysia and Dr Mahathir. Another indicator is the fact that NBD supplied LNG to Malaysia to help its neighbour meet a shortfall in its export quota. The offshore dispute, then, is an irritant to bilateral relations, but certainly falls far short of a casus belli.

Following their meeting at Penang in May, HM the Sultan and Dr Mahathir held further talks about offshore issues at Putrajaya towards the end of August. Aides-mémoire having already been exchanged during previous months, a 'broad understanding' was possible, but full agreement remains elusive. Both countries also pledged to work together to resolve the Limbang issue. Speaking soon after the August meeting, Malaysian Foreign Minister Syed Hamid Albar revealed that 'certain packages' had been proposed and that the decision now rested with NBD. 'There is only a difference of opinion as to where the [offshore] border lines are', he said.

While this matter rumbles on, buoyant hydrocarbon prices should benefit the NBD treasury; during the second week of October the price per barrel of Brent crude oil temporarily breached the US$30 barrier on the London market. There were two other positive developments. First, a new market has been found for the sultanate's oil: India. On 17 July 2003 a contract was signed under which the Brunei Shell Petroleum Company (BSPC) would supply the Indian Oil Corporation with 1.8 million barrels of Seria Light Export Blend during the second half of 2003 in three cargo lots of 600,000 barrels each, with the prospect of further business to follow should the present agreement be executed to the satisfaction of both parties. In mid-August, the first consignment was duly loaded on to an Indian tanker bound for Chennai. Secondly, on 26 August the BSPC's offshore Egret Field produced its 'first gas' and is expected to yield oil as well as gas for at least twenty years.

Amongst other developments are: (i) unemployment, particularly among the youth, remains a 'burning issue'. A ‘spirit of entrepreneurship’ is being fostered by the government to counter the problem and, accordingly, the mindset of aspiring to be 'employer' rather than 'employee' is to be cultivated; (ii) A new cyber law is being drafted, prompted partly by the need to regulate an internet park currently being constructed near the capital. ASEAN has also turned its attention to the issue: by 2005 all ten member-states are expected to have put in place Computer Emergency Response Teams to deal with potential attacks by hackers or viruses; (iii) Two local business entities celebrated their silver jubilee in September-October, namely the Federation of Brunei Malay entrepreneurs (PPPMB), one of three Malay business organisations in the country, and Abdul Razak Holdings, a major player in the local real estate sector; (iv) A two-year (2002-4) NBD$11m road improvement project is in progress in Tutong District in an attempt to boost eco-tourism, particularly at Merimbun Lake; (v) On 27 August Haji Metassan Daud, Director of Transportation at the Ministry of Communications, was promoted Permanent Secretary at the Ministry of Development; whilst on 17 September Pengiran Dato Abu Bakar Ismail, Senior Special Duties Officer at the Ministry of Development, became Deputy Permanent Secretary at the Prime Minister's Office.

WATCHPOINT: Will any settlement be reached in the NBD-Malaysia offshore dispute?


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