A sultanate in northwestern Borneo.
Country comprising two enclaves on the NW coast of the island of Borneo, bounded to the landward side by Sarawak and to the NW by the South China Sea.
The 1959 constitution gives supreme authority to the sultan, advised by various councils. Since the constitution was suspended after a revolution 1962, the sultan rules by decree, with the assistance of four councils: the religious council, the privy council, the council of cabinet ministers, and the council of succession.
An independent Islamic sultanate from the 15th century, Brunei was a powerful state by the early 16th century, with dominion over all of Borneo, its neighboring islands, and much of the Philippines. With the growing presence of the Portuguese and Dutch in the region, its influence declined in the late 16th century. The British North Borneo Company was founded 1881, while Dutch traders dominated S Borneo.
In 1888 Brunei became a British protectorate, and under an agreement of 1906 accepted the appointment of a British Resident as adviser to the sultan. The discovery of large oil fields in the 1920s brought economic prosperity to Brunei. The country was occupied by the Japanese 1941 and liberated by the Australians 1945, when it was returned to Britain. In 1950 Sir Muda Omar Ali Saiffuddin Saadul Khairi Waddien (1916–1986), popularly known as Sir Omar, became sultan. In 1959, a new constitution gave Brunei internal self-government but made Britain responsible for defense and external affairs. A proposal 1962 that Brunei should join the Federation of Malaysia was opposed by a revolution, which was put down with British help. As a result, the sultan decided to rule by decree. In 1967, he abdicated in favor of his son, Hassanal Bolkiah, but continued to be his chief adviser. Brunei gained full internal self-government 1971.
In 1984 full independence was achieved, the sultan becoming prime minister and minister of finance and home affairs, presiding over a cabinet of six, three of whom were close relatives. Britain agreed to maintain a small force to protect the gas and oil fields that make Brunei the wealthiest nation, per head, in Asia.
In 1985, the sultan cautiously allowed the formation of the loyal and reliable Brunei National Democratic Party (BNDP), an organization dominated by business people. A year later, ethnic Chinese and government employees (who were debarred from joining the BNDP) formed, with breakaway members of the other party, the Brunei National United Party (BNUP), which became the country's only political party after the dissolution by the sultan of the BNDP 1988. While loyal to the sultan, the BNUP favored the establishment of an elected prime-ministerial system.
After the death of Sir Omar 1986, the pace of political reform quickened, with key cabinet portfolios being assigned to nonroyals. A more nationalist socioeconomic policy was adopted, with preferential treatment given to native Malays in the commercial sphere rather than the traditional Chinese, and an Islamic state emerged.
The country has foreign reserves of $25–27 billion, the income from which is $2 billion a year. Its annual income from gas and oil exports is $1.5 billion a year. More than one third of the work force is foreign nationals.