Brunei parties, but what happens when the oil runs out?

PUBLISHED : Saturday, 15 July, 2006, 12:00am
UPDATED : Saturday, 15 July, 2006, 12:00am

Brunei celebrates its biggest party of the decade today in the extravagant style the rest of the world expects.


The event is a royal one; the 60th birthday of Sultan Hassanal Bolkiah, who once held the title of the richest man in the world thanks to Brunei's oil and gas reserves.


With the US$20 billion wealth Forbes estimates he holds, the 29th sultan of Brunei rules as one of the world's last absolute monarchs. His leadership is believed to be benign, but it is hard to judge the quality of his rule when there is no political opposition and a fawning press.


Since he became the head of state in 1967, there have been grumbles about human rights abuses from the US State Department, little accountability to his people and the infamous run-in with his younger brother, the playboy Prince Jefri.


But the public sibling fallout, endless court battles in overseas jurisdictions and allegations of high-class prostitution rings in the palaces seem to have done little to dent the sultan's reputation in Brunei.


Today, thousands of Bruneians will attend the military parade in the tiny capital, Bandar Seri Begawan - a collection of air-conditioned shopping malls, hotels and marble mosques where welcome signs are studded with diamonds.


Almost every building sports huge posters of the revered monarch. Streets are draped with coloured lights and bunting.


Ten years ago, when the sultan turned 50 and well before the scandals started, it was very different. Then Michael Jackson was flown in for the celebrations, the sultan was indisputably the world's richest man and Brunei was riding high on its fabulous oil wealth.


Prince Jefri was a heroic figure, heading the Brunei Investment Authority and basking in the prestige of his massively ambitious hotel and theme park construction projects.


They were all designed to turn the sultanate into one of Asia's premier tourist destinations.


Now the hotels are mostly empty and half the rides at the theme park are shut. His brother accuses him of embezzlement on such an enormous scale that after his tenure as finance minister, a US$15 billion hole appeared in the state finances.


Prince Jefri has been banished to London and has not spoken to his brother for two years. He recently only just managed to fight off his brother's attempt in a London court to jail him.


The international prestige of the 600-year-old dynasty that once stretched as far as the Philippines has not been this low since before the sultan's forebears went to Queen Victoria in the 1880s seeking to become an British colony.


The sultan runs his realm of 350,000 subjects as a mixture of feudal fiefdom and welfare state, using oil money to finance his own sumptuous lifestyle and that of his people.


There is no criticism of the royal family in print and no mention of Prince Jefri, who has been ignored since his fall, although a fascinated population follows events closely over the internet and by word of mouth.


'We like our sultan very much,' one of his subjects gushed. 'He is very rich and he shares it with us.'


The man gave an embarrassed giggle when Prince Jefri's name was mentioned. 'No comment. That is big trouble,' he said.


The fallout has been so bitter partly because the two brothers were once so close and because Brunei knows it needs to find a new way of making a living.


The 215,000 barrels of oil pumped daily mean free education and health care, no taxes and low prices for fuel and food, including beef raised on ranches the sultan owns in Australia that are bigger than Brunei itself.


The sultan takes full credit for his people's happiness. He is, after all, monarch, prime minister, defence minister, finance minister, supreme commander of the armed forces, supreme head of Islam, chief of the police, head of the petroleum unit and head of broadcasting services.


After independence from Britain in 1984 he managed to rule without a parliament for two decades, until grudgingly allowing a legislative chamber to convene two years ago. The country is still under a state of emergency imposed in 1962. Luckily for Brunei, diplomats say, he is a competent ruler.


However, some of his actions do raise eyebrows. The Times of London found out from his court action against Prince Jefri that the sultan rewrote the constitution to declare: 'His majesty the sultan can do no wrong in either his personal or any official capacity.'


His people do not seem to mind. Neither are there complaints about his lifestyle. His main palace has 1,788 rooms and corridors of gilt and marble. He maintains herds of polo ponies and fleets of Rolls-Royce cars.


Even divorcing one of his three wives, the mother of four of his eleven children, and a marriage last year to a Malaysian television star, have been forgiven.


But a real test of royal power may be looming. Brunei has lived off its oil and gas reserves for a century. Just last month Energy Minister Yahya Begawan Mudim warned Bruneians to curb their extravagant lifestyle of wasting energy.


'We must therefore get out from our belief of a bottomless well in our oil and gas reserves,' Mr Yahya said, announcing a US$144 million fuel subsidy to business leaders.


The exact numbers are unclear, but some experts suggest Brunei's proven oil reserves could run dry in just a decade.


The royal family will soon have to face up to finding another way to ensure the prosperity its people have taken for granted for so long.