Around the South China Sea, there is such a country: its land area is not large, the population is small, it has little sense of existence in international affairs, but it has rich reserves of natural resources, and its per capita GDP once ranked among the top in Asia. The country is Brunei.
Brunei, full name Brunei Darussalam, is an absolute monarchy located on the northern shore of Borneo in Southeast Asia, northwest of the island of Kalimantan. In 2020, Brunei has a population of about 440,000, of which Malays account for about 66% of the total.
In the economic sector, the production and export of oil and gas is an important pillar of Brunei's economic development, accounting for more than 60% of its GDP. With the advantage of few people and many resources, in 2014, Brunei's per capita GDP ranked fifth in Asia, which surprised many countries and economists in the world.
However, in recent years, due to the development of new energy, changes and adjustments in the global industrial structure, domestic political changes in Brunei, the new crown epidemic and other factors, brunei's development has gradually fallen into a certain dilemma, where is the way forward?
1. History and present situation of Brunei
Brunei, although not so well-known in the current international community, was actually settled here as early as the 8th century AD.
Brunei was influenced by China for a long time, and from the Liang Dynasty during the Southern and Northern Dynasties, Brunei people traveled far and wide to visit China.
During the Sui, Tang, Song, and Yuan dynasties, Brunei sent a number of delegations to Visit China, sometimes led by the king himself. Under such political relations, Brunei's culture has also long been influenced by China.
But with the introduction of Islam in the mid-14th century, the Islamic monarchy of Brunei gradually escaped Javanese control and flourished from the 14th to the 16th centuries, once covering the southern Philippines as well as Sarawak and Sabah.
However, from the middle of the 16th century, the land began to be occupied and colonized by Western countries. The first to invade Brunei were the capitalist countries that had their roots in the Age of Discovery, including Portugal, Spain, the Netherlands and other countries, especially the Spanish expedition to Borneo in 1578 that dealt brunei the hardest.
In the 1770s, British expansion and invasion intensified, and finally on September 17, 1888, the Treaty of Brunei was signed, stipulating that Britain had the right to decide the succession to the Brunei throne and diplomatic power, and Brunei could not cede its territory to other countries without British consent.
This marked the beginning of British colonial rule in Brunei.
During this period, the British colonists plundered various economic and natural resources of Brunei, occupied land to grow rubber, and controlled the development of forest resources. All this has greatly damaged Brunei's national economy.
But in the 1920s, with the discovery and exploitation of large amounts of oil in the Siria region, Brunei gradually formed a solid financial foundation. During World War II, Japan replaced The British in colonizing Brunei. During the Japanese occupation, Brunei's undertakings, particularly the oil industry, were severely damaged.
After World War II, it was thought that victory would make it an independent country, but the British rulers made a comeback and put Brunei under their own military control.
Brunei then embarked on a nearly 40-year-long quest for independence. In the second half of the 1950s, brunei's first political parties emerged.
Under pressure from the National Democratic Movement and the International Independence Movement, The United Kingdom was forced to agree to the promulgation of a constitution in 1959, introducing partial internal self-government and administrative reforms, establishing local councils and legislative assemblies, and placing matters other than defence, policing and foreign affairs under the administration of the Sultanate of Brunei.
After many negotiations, Brunei declared itself a fully independent state on 1 January 1984.
After independence, the Sultanate of Brunei vigorously pursued a policy of "Malayization, Islamization and Monarchy", with the aim of consolidating royal rule, focusing on supporting the development of indigenous peoples such as the Malays in the economic field, and strictly upholding the teachings of Islam while carrying out modernization.
This lays hidden dangers for the bottleneck of Brunei's political and economic development in the future. From the perspective of political system, Brunei officially declared the "Malay Islamic monarchy" as the national program on the day of independence, and its connotations include: maintaining the status of malay language, culture and customs as the subject, promoting Islamic laws and values throughout the country, Islam is the state religion of Brunei, opposing the separation of church and state, and the supremacy of the royal family.
Constitutionally, Brunei promulgated its first constitution on 29 September 1956, which provided that the Sultan was the head of state and religious leader, with full state powers, including the legislative, executive and judicial powers, and five committees to assist the Sultan in governing the country.
From these aspects, it is not difficult to see that the Sultan of Brunei and the royal family enjoy supreme power in terms of politics, economy, culture and other aspects, and such a political structure can operate smoothly during economic development, but it is also easy to become a stumbling block to economic reform.
Second, the oil economy and the extravagance of the royal family
Brunei's land area is not large, and its agricultural base is relatively weak due to the influence of technology, climate environment, population and other factors.
In addition, Brunei has a coastline of 162 km and is rich in fishery resources and conditions, but due to territorial disputes and fishing technology restrictions, its fishery output value accounts for less than 1% of gdp, and even more importantly, the domestic fishing market demand needs to be imported from abroad.
But Brunei's geographical location has enriched its oil and gas resources, which has brought brunei endless wealth.
According to the BP World Energy Statistics Yearbook 2019, Brunei ranks fifth in both oil and gas production in Southeast Asia.
By the end of 2019, Brunei had proven oil reserves of 1.1 billion barrels and natural gas reserves of 300 billion cubic meters. Although it accounts for only 0.1% of the global total, it is already very useful for such a small country of less than 500,000 people.
Moreover, the Brunei government actively explores new oil and gas areas on the one hand, and on the other hand, pursues a policy of moderation in oil and gas exploitation, so as to achieve a better balance between exploration and exploitation.
According to Brunei's official statistics, Brunei produced about 121,000 barrels of oil per day and about 36 million cubic meters of natural gas per day in 2019.
As a bulk export product, Brunei's oil and gas exports are mainly destined for Japan, South Korea and India. However, such a single economic and industrial structure also brings huge hidden dangers to Brunei. Brunei's economy is vulnerable to, for example, when faced with fluctuations in international oil prices.
In the second half of 2014, international oil prices plummeted and continued to be sluggish, and the world's major crude oil production capacity countries were negatively affected, and Brunei was no exception. The crisis had a huge impact on Brunei's economy, with its foreign trade shrinking sharply, leading to a sharp decline in fiscal revenues and a serious national deficit.
In addition to being affected by price fluctuations in the international crude oil market, the development and utilization of new energy sources will also have serious impacts, especially the advent and development of clean energy vehicles.
The natural fragility of the economy has laid hidden dangers for Brunei, which has been further amplified by the extravagance of the royal family. Prior to 1993, the Brunei Dynasty was the longest surviving dynasty in Asia except the Chrysanthemum Dynasty of Japan.
It was not until the restoration of the Cambodian dynasty in 1993 that the second longest surviving Asian dynasty was replaced by a Cambodian dynasty with a history of more than 700 years.
The current Sultan of Brunei is the 29th Haji Hassanal Borkiah, which has been passed down for more than 600 years since 1363, and the Brunei monarchy has not yet shown signs of ending, and the status and hereditary status of the royal family have been written into the Brunei Constitution.
Most of Brunei's oil and gas resources are in the hands of the royal family, and according to public information, the assets of the Brunei royal family exceed $70 billion.
On the basis of mastering the abundant oil and gas resources, the Brunei royal family has lived a very luxurious life. In April 2015, Prince AbulMari of Brunei was married, the youngest son of the Sultan of Brunei and the second in line to succeed the next Sultan. This grand wedding attracted the attention of the whole world.
The wedding took place at nuruiman Palace, the largest and most modern palace still in use in the world, with a total of more than 1,700 rooms, 5 huge swimming pools, 257 bathrooms and 110 garages, and the overall decoration is extremely luxurious.
This is only a small part of this "high" wedding. According to available information, the total cost of the wedding exceeded 200 million US dollars.
Not only in the wedding such a special occasion luxury, the Brunei royal family in daily life is also unrestrained, each brand of luxury cars, luxury houses distributed around the world and other luxury cars that only the outside world can not think of, there is nothing that can not be done.
With unbridled extravagance on the one hand and increasingly restricted economic development on the other, where is Brunei's way out?
Third, brunei's future way out
In recent years, Brunei has also gradually realized the shortcomings and deficiencies of its own economic structure, and has formulated a series of development policies and plans to try to adjust.
In terms of broadening the industrial sector, Brunei regards tourism as one of the priority areas for vigorous development. Brunei has a natural seaside advantage and is rich in marine tourism resources. In order to attract international tourists to Brunei for tourism and vacation, Brunei has launched a series of preferential policies.
Before the COVID-19 pandemic, the number of international visitors to Brunei reached 333,200 in 2019, an increase of 19.81% over the previous year. Among them, Malaysia, China, the Philippines, Indonesia and Singapore are the top five source countries for tourists, with Chinese tourists accounting for 16.9% of the total number of tourists and 36% in the leisure vacation category, ranking first.
In addition to its efforts in tourism, the Brunei government has also vigorously developed Islamic finance and halal industries, logistics and communication industries, increased investment in agriculture, forestry, fisheries and infrastructure construction, and promoted the diversification of the economy and the dependence on the natural resource economy.
Faced with the current situation of weak agricultural foundation, Brunei put forward the strategic goal of rice self-sufficiency, and invited enterprises from China, the Philippines, Singapore, South Korea, Thailand and other countries to participate in the trial of rice planting projects in Brunei to varying degrees and cooperate with many parties.
In terms of attracting foreign investment, the Brunei government has carried out a series of reforms, setting up a one-stop service platform, optimizing and reducing the administrative approval process, and setting up a FAST Center to provide more comprehensive and rapid services for foreign investors.
Since the covid-19 pandemic, changes and fluctuations in the international economic environment have had a huge impact on small countries such as Brunei, such as the stagnation of tourism caused by the interruption of international tourism, the collapse of oil prices that caused fiscal revenues to fall by 57.7% compared with the same period last year, and foreign direct investment was also postponed due to the epidemic, which is not a small blow to Brunei.
Faced with this situation, the Brunei government is trying to achieve economic development in the post-COVID-19 era by developing the path of digital economy. Brunei's Ministry of Transport, Information and Communications released the Digital Economy Master Plan Framework in April 2020, which makes the development of the digital economy a strategic plan.
During the pandemic, brunei's e-commerce platforms have nearly 200 registered suppliers, which have not only promoted the development of enterprises, but also provided a number of jobs in areas such as food and beverage, including retail, fashion and so on.
In general, Brunei has recognized the shortcomings of its own economy before the epidemic and begun to promote related reforms and developments, and the new crown epidemic has further deepened their understanding of the industrial structure and explored the future path more actively and deeply.
Bibliography:
- Huang Ying and Huang Qin, "The Impact and Suggestions of Brunei's Development Strategy on Brunei-China Economic and Trade Cooperation", Modern Commerce and Trade Industry, No. 9, 2022;
- Li Yangyang, "Research on Brunei's Economic Development in the "Post-epidemic Era"", Legal System and Economy, No. 5, 2021.