Brunei: A Tale of Soil and Oil

With an economy based almost exclusively on the oil industry, Brunei offers its citizens a high standard of living—but it comes with limitations.

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Untouched rainforest, stilt villages built over the river, no nightlife of which to speak, and not a drop of alcohol in sight; you could never accuse Brunei of being an overly boisterous destination.

The peace that exists in this small sultanate, wedged into a corner of the island of Borneo, is down to its astonishing wealth, which is based on its vast oil reserves. Brunei offers one of the highest standards of living in the world, and the population pays no personal or sales tax.

On the other hand, Brunei isn’t known for its political freedom. The current head of state, Sultan Hassanal Bolkiah, has ruled for more than fifty-seven years, and criticism of him or the royal family isn’t tolerated. On the level of international politics, global condemnation was swift when the sultan called for the expansion of sharia law in 2013.

Brunei’s origins are shrouded in mystery, with historians reliant on accounts from China to explain its roots. As Johannes L. Kurz writes, historian Robert Nicholl examined Chinese sources to reveal “long standing relations between ‘ancient’ Brunei and the imperial court in China.” Nicholl noted several place names in the Chinese records that he identified as precursors of Brunei. As a result of this work, “the national history incorporated pre-modern Chinese descriptions extending the existence of pre-Islamic Brunei to the sixth century,” writes Kurz.

Kurz argues that Nicholl lacked the philological expertise needed to read classical Chinese texts (Nicholl relied on translations), so he remains skeptical of this “ancient” history. However, he points out that Nicholl’s account conforms to the work of the Brunei History Centre (Pusat Sejarah Brunei), which “regularly publishes work on Brunei history following and reinforcing guidelines set up by the national ideology of a Malay Muslim Monarchy.” The Centre “watches over the correct interpretation” of the sultanate’s history, which, Kurz argues, lacks “solid textual, archaeological, or other evidence to support it.”

In the absence of verified history, folklore has reigned supreme. Leigh Wright relays one fascinating story in a 1977 issue of the Journal of the Hong Kong Branch of the Royal Asiatic Society. According to a common tale from northern Borneo, captured in the epic poem Sha’er Awang Semaun, “legendary Brunei was founded ‘29 reigns ago by fourteen brothers of heroic statue and semi-divine descent.’ The brothers were sired by a father who descended in an egg from the heaven of the ancient pre-Muslim Malay gods.”

This mythical father, Dewa Emas Kayangan, had fourteen sons who eventually chose one of the half-brothers to be their leader.

“When they were all converted to Islam, the leader became Sultan,” Wright explains.

By the early nineteenth century, and the arrival of James Brooke, a soldier with the Dutch East India Company who would change the course of Brunei’s history, the sultanate was a respected entity in what was becoming a vital area for seafaring trade. However, as Graham Irwin writes in his history of Borneo, published in 1955, the tiny nation seemed a mere bystander in larger historical events, with few powers of its own. By 1839, the year Brooke arrived in southeast Asia, the sultanate of Brunei

extended from the far north of Borneo down to the frontier of Sambas at Tanjong Datu. The rivers along these seven hundred miles of coastline supported small populations of Malays and a few Chinese. […] The numerous chiefs who ruled the area acknowledged the formal suzerainty of Brunei, but sent the Sultan little or no tribute. Many of the rivers were in the hands of independent and piratical Arab sharifs who recognized no superior authority at all.

Brooke, looking for fortune and adventure, arrived in Borneo at a time of unrest. He was offered the title of “Raja of Sarawak” by Omar Ali Saifuddin II, Sultan of Brunei, in return for his help in warding off the triple threats of piracy, insurgency, and civil war.

A long reign as “the white Raja” would follow, but not without some early doubts about his venture, as Irwin explains. Brooke was acting not as an official delegate of the Dutch East India Company, but

entirely on his own initiative. In official circles in England he was still regarded as a private gentleman who had been invested by a Malay Sultan with autocratic powers over a small native state in Borneo. He had not been given authority to carry out negotiations of any kind and, because of this, he believed that the Government were wasting valuable opportunities in not making better use of his unique position. He began to suspect that he was being regarded as a schemer and a job-hunter, and at one time even had serious thoughts of returning home in despair.

Brooke remained in the region, however, to be followed in power by his nephew Charles and then Charles’s son Vyner. The Brooke family ruled Sarawak (with the full support of the British Royal Navy) until a year beyond the end of World War II, when such were the levels of destruction heaped upon Borneo that the last Brooke felt he had no choice but to cede Sarawak to the UK as a colonial territory.

Although initially grateful for Brooke’s involvement in the region, Brunei found Sarawak wasn’t the best neighbor in the nineteenth century. Brunei lost “large tracts” of territory to the expansionist state, writes Hamzah Ahmad (today, Sarawak encompasses Brunei, with Sarawak’s Limbang Valley separating the Temburong District from Brunei’s other three districts). Those early territorial losses to Sarawak were compounded by the involvement of first the Brookes and then the UK in Brunei’s petrochemical industry.

Charles Brooke had obtained mining concessions in Brunei by 1888, and it was during his rule that Brunei first struck oil. Yet, the first black gold that flowed from the ground wasn’t considered to be much more than an inconvenience as A. V. M. Horton recounts in a 1986 issue of the Journal of the Malaysian Branch of the Royal Asiatic Society. Citing Colonial Office records, Horton writes that Brooke’s mining efforts had been focused on coal. When oil was struck in 1903,

hopes were entertained that, as a result, [the village of] Buang Tawar might become “a valuable property.” But the oil, instead of increasing profits, simply hampered the winning of coal. The Sarawak Government continued to work the oil until at least 1928; the “usual flow” was four barrels a month. (Emphasis in original.)

This changed rapidly in the following decades and, following World War II, the sultanate was considered unbelievably rich, as Horton relates in a 1995 essay.

“Thanks principally to the rapid expansion of oil output and increases in the rate of oil royalty,” he writes,

the Brunei Government’s revenue in 1949 amounted to 8.7 million Malayan dollars, compared with $1.5 million in 1940.…“This fortunate little State is so rich as to be almost indecent,” one [British civil servant] commented, “and in the fortunate position of being able to sit back and watch the oil flow out and the money flow in.”

Choosing to remain a British Protectorate instead of joining the newly founded Malaysian state in the 1960s, Brunei achieved independence only in 1984. D. E. Brown’s prescient paper, “Brunei on the Morrow of Independence,” published in 1983, predicted what the future might hold for the newly liberated nation.

“The withdrawal of Britain’s overwhelming monopoly of force will unleash all sorts of possibilities for political development within the state,” Brown writes. The large amounts of money and number of multinational interests involved in petroleum “will make political actions tempting and vital.” Moreover,

the pressure to liberalize and share government power more widely will almost certainly mount. Yet there is a widespread perception that experiments with democracy can be highly destabilizing. Few, if any, Bruneis want to risk the loss of Brunei’s independence to Malaysia or any other neighbour.

The lack of diversity in Brunei’s exports (oil and gas account for more than 90 percent) and the lack of political opposition mean that, for the 420,000 people who call Brunei home, their quality of life depends on the global market for fossil fuels and the decisions taken by the sultanate.

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