Brunei Darussalam: Security and Economic Concerns Feature During the Fourth Quarter 2002


Dr AVM Horton

The year 2002 in the Sultanate ended with a certain sense of apprehension, based on security and economic concerns. Although Negara Brunei Darussalam (NBD) is itself famous worldwide for its domestic tranquility and unhurried pace of life, the ASEAN region as a whole was in a state of shock following the Bali bombing on 12 October, which the NBD Government forthrightly denounced on 18 October. ASEAN leaders repeated this condemnation at their Phnom Penh Summit in November 2002, which was attended by HM Sultan Hassanal Bolkiah. His Majesty himself travelled to Washington in December. President Bush welcomed the recent accession of the NBD Government to the International Convention for the Suppression of Financing of Terrorism and thanked the monarch for providing humanitarian aid to Afghanistan. In a meeting with Mr Kofi Annan in New York, His Majesty reiterated his support for UN efforts to eradicate international terrorism.

Security was also the main theme of His Majesty's New Year titah (address to the nation). 'If the main challenge facing ASEAN until recently had been the economic slowdown caused by the currency crisis, its main problem now is a crisis of confidence among foreign investors and tourists to the region'. His Majesty reminded the public that peace and security were not easily achieved, nor was it to be regarded lightly. As if to prove the point, in early January 2003, His Majesty signed a renewal agreement in London under which British Army Gurkhas would continue to be garrisoned in the Sultanate for a further five years (until September 2008).

Other important foreign affairs developments included the establishment of diplomatic relations with Belarus (4 November) and Togo (3 December); the signing in December of a memorandum of understanding to promote legal cooperation between the Sultanate and China, for example to enable legal extraditions; and a US-NBD Trade and Investment Framework Agreement (TIFA), signed whilst His Majesty was in Washington.

Beyond the security situation, the Sultanate also has economic worries. International crude oil prices remained comparatively buoyant during the final quarter of 2002 - generally at US$25-26 per barrel, although fluctuating at times in the US$22-30 range. This should not be bad news for NBD's export earnings and government revenues. Yet, according to reports in the Borneo Bulletin, there were 'no signs of recovery' in the 'sluggish' business sector and executives were not optimistic about the prospects for the coming twelve months. Economists fear that rising consumer debt will lead to a decline in domestic spending. Labour-intensive industries, such as textiles, are facing sharper international competition, particularly from China. Capital flight is another problem. Construction industry leaders complained of being hamstrung by restrictions on foreign workers entering the Sultanate. Members of the Malay Chamber of Commerce and Industry seemed particularly downbeat during the quarter. One bright spot was a boost in sales of motor vehicles as a result of a sharp reduction in excise duty. The 'Brunei Grand Sales' were extended over three months (November 2002 to January 2003) in an attempt to get consumers to spend their money at home rather than travelling abroad for cheaper goods; and also to attract foreign bargain-hunters to the Sultanate. There was talk of the Sultanate seeking to become a player in the international halal food market, particularly in the Persian Gulf region; it remains to be seen, though, how successful these efforts will be. On 25 November, Bandar Seri Begawan issued a denial that the NBD dollar was to be de-coupled from its Singapore counterpart. Rumours to the contrary were described as 'malicious, untrue and unfounded'.

Despite the economic worries, members of the royal family evidently continue to enjoy great popularity, judging from the ninety thousand persons who flocked to the main palace, the Istana Nurul Iman, during the three days of the Hari Raya festival in early December. This was also a demonstration of Muslim unity and strength in the face of worldwide pressures on the Muslim community. The Sultanate's image as a beacon of Islam received a further boost when Hajjah Aminah Manaf, 36, won the forty-fourth Tilawah Al-Quran held in Kuala Lumpur on 24-31 October 2002. This was the first time that a woman from Negara Brunei Darussalam had won an international Quran-reciting competition; and the nation rejoiced.

WATCHPOINT: (1) Will there be any economic recovery in 2003? (2) If there is war between the USA and Iraq, will popular opinion in the Sultanate continue to accept the government's current pro-Washington approach?


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