Brunei gained independence under extremely favorable
circumstances, considering that it is a third-world country:
a relatively small population; one income per population of
approx. $ 20,000 annually; a modest unemployment; a generous
social system and a considerable reserve of foreign capital:
$ 14,000 million in 1984.
The main causes of conflicts from that point on became
the internal power struggles in the royal family and the
presence of foreigners on all key posts in the public
sector, in the economy and in the army.
The main internal problems were the lack of basic
education and the conditions for the country's minority
groups, especially the Chinese. Even with refined
legislation providing financial aid for transportation and
food for students, illiteracy continued to rise - an
estimated 45% of the population was illiterate in 1982 - and
significantly weakened the opportunities for national
participation in local administration.
On the other hand, the Sultan, who was prepared to
economically depend on a volatile natural resource such as
oil, sought to make production less one-sided and promoted
the formation of a new class of landowners who were
encouraged to seek self-sufficiency in the food field;
Brunei imported almost 80% of its food. Only about 10% of
the country's total land was cultivated and there was a
widespread tendency for the smaller landowners, especially
rubber farmers, to move to the larger cities.
Brunei has become financially dependent on a complex of
multinational corporations. The company Brunei established
with Brunei Shell Petroleum and Mitsubishi to extract
natural gas deposits, plus the shipping agreement entered
into with Royal Dutsch Shell, as well as the oil extraction
concessions issued to Woods Petroleum and Sunray Borneo, led
to national decision-making processes came an element of
powerful foreign interference.
In March 1985, the government formed an Energy Control
Board to oversee and control the activities of the
semi-state, semi-multinational Brunei Shell Petroleum Co..
Brunei's accession to ASEAN and, as UN member 159, in
1984, provided international support for the new nation.
The Sultan's Palace Istana Nurul Iman was completed in
1984. It had cost 1.5 billion. US $ to build, had 1,800
rooms, including a banquet hall where 5,000 could be eaten
and covered an area of 200,000m 2.
20% of the Sultanate's inhabitants live below the $ 500
monthly subsistence minimum. 90% of all consumer goods,
including food, are imported and therefore the cost of
living is quite high.
In early 1987, it was reported that the Nicaraguan
counter-movement had received $ 10 million in financial
assistance as a donation from the Sultan of Brunei. It was a
response to an inquiry by U.S. Colonel Oliver North about
illegal support for the contras, and the amount had been
transferred to a bank account in Switzerland.