Oil-Rich Brunei And Its Sultan Value Their Isolation From World

BANDAR SERI BEGAWAN, Brunei - Except for the sultan's 1,778-room palace, lit up at night like a giant pearl, tiny Brunei is modest about its vast oil wealth.

Schools and hospitals are free, but no fleets of Rolls-Royces cruise the tree-lined streets of this sleepy Southeast Asian capital. There are no skyscrapers, only squat British colonial-era buildings.

Instead of yachts on the Brunei River, there are traditional houses on stilts. Women wear sarongs and Muslim head scarves, not fashions from Paris or Milan.

And Sultan Hassanal Bolkiah, absolute ruler of Brunei's 276,000 people, wants his isolated nation on the northwest coast of Borneo to stay that way.

"We wish to be left alone, and free from foreign intervention," he said in 1984, shortly after independence from Britain.

That sentiment is understandable.

Five hundred years ago, Brunei dominated an area stretching from modern-day Malaysia to the Philippines. But after centuries of encroachment by its neighbors whittled away most of its territory, Brunei's rulers were forced to ask for British protection in the late 19th century.

Today, Brunei is the size of Delaware, surrounded on three sides by the equatorial rain forest of the Malaysian state of Sarawak. Jungle still covers more than 90 percent of its territory.

But beneath this tiny land and the seas off its shores lies a giant consolation prize - rich reserves of oil and natural gas that make Brunei the Kuwait of Southeast Asia.

Pumping out 150,000 barrels of crude a day, the oil wells support an economy that provides Bruneians with an average income of nearly $17,000 a year, among the highest in the world.

In addition to paying for clinics and schools, the sultan also heavily subsidizes food, fuel and housing costs. There is no national debt, no trade deficit and no government budget deficit.

Imports supply 80 percent of the country's food, although the Kedayan and Dusun tribes in the hinterlands still raise vegetables and fruit and breed chickens.

The 49-year-old sultan, whose Istana Nurul Iman palace is the world's largest residence, presides over $37 billion in foreign assets, including the Beverly Hills Hotel.

Some say that makes him the richest man in the world.

Microsoft's Bill Gates, with an estimated net worth of more than $13 billion, was recently named by Forbes magazine as the richest person in the world, but the Forbes list excluded the sultan and others whose fortunes are tied to royalty or inheritance.

And with the modesty of a modern Muslim ruler, the sultan responds that most of the money isn't his - he's just managing it on behalf of Brunei.

The sultan's legendary generosity drew him into controversy when it was revealed that he gave $10 million to Oliver North in 1986 for his clandestine scheme to arm the Contras in Nicaragua. Brunei asked for its money back.

Brunei's fountain of oil wealth isn't expected to run dry for decades, but the government realizes it can't rely on just one export.

"The economic future of (Brunei) depends considerably on the country's oil and gas reserves," the sultan said recently. "At the same time, of course, we have to diversify the economy."

His government has allocated $321 million over the next five years to develop industry, agriculture, forestry, fisheries and trade.

More than half the country's work force is employed by the government, and most of the rest work for Brunei Shell Petroleum - a joint venture with Royal Dutch Shell - and Royal Brunei Airlines.

There is no poverty, but pay for government workers averages about $1,000 a month - equal to only a tiny fraction of the $170,000 tip the sultan once left for the staff of a Cyprus hotel.

Those huge differences in wealth, and the sultan's unlimited powers, leave Bruneians ambivalent.

"That's the way it always is. The rulers have all the wealth and the subjects always earn their living. But we have a comfortable life," said one housewife, who asked not to be identified further.

Hassanal assumed the throne in 1967 when he was still a 21-year-old cadet at Britain's Sandhurst Military College. Once a globe-trotting playboy with a fondness for polo, he now appears in public mostly in sober Western suits and occasionally in military uniform.

He also serves as his own prime minister, defense minister and armed forces chief. His face is on Brunei's money, and portraits of him and his two wives are mandatory in all homes, shops and offices.

Brunei's only experiment with democracy was in 1962, when the country still was a British protectorate. The Parti Rakyat Brunei swept the elections, then launched a rebellion when Hassanal's father refused to convene the legislature.

British troops crushed the uprising, the party was banned and a state of emergency declared, which remains in force 33 years later. A British battalion of Gurkha soldiers is still on hand to defend the oil fields.

In 1991, Hassanal announced a new creed called Melaya Islam Beraja, or Malay Muslim Monarchy, which blends Islam with Brunei's traditional Malay culture and promotes the sultan as defender of the faith.

Since then, Muslim holidays and the sultan's birthdays are celebrated with more pomp and fervor. Alcohol has been banned.

Dating couples are chaperoned, and women are expected to dress conservatively.

All students at Brunei's only university are required to attend courses on the creed.

Brunei can afford to be aloof. Almost all of the 74,000 foreign residents are oilfield workers, and it's nearly impossible to become a citizen. Few tourists visit, so the country has only nine hotels.

When Secretary of State Warren Christopher and foreign ministers of 17 other countries held a meeting in Brunei last month, they stayed in minipalaces owned by the sultan.

Hundreds of journalists had to scrounge for accommodations, some sleeping in windowless, closet-sized rooms in an unused wing of one hotel.