Amid the golden illumination thrown by the imposing Sultan Omar Saifuddin Mosque - by law always the tallest building in Bandar Seri Begawan - two Philippine overseas workers ponder their fate, holding hands lightly one Saturday evening in shadows cast by the mosque, an architectural splendour of Islam.
Janelle, a domestic helper from just outside Manila, says she feels secure in her job, which enables her to remit cash home to her large extended family. Boyfriend Romy, a construction engineer, is not so optimistic. Work has ceased on the government-funded building site in the Brunei capital where he works. Come Monday, he may know his fate. Just around the corner at the Sultan Hassanal Bolkiah Foundation Shopping Centre, the Victoria Shoe is advertising for shop clerks. "Only Locals Need Apply," the sign reads. Store manager Nur says he has had a "few" applications, but "no one really suitable".
More Bruneians, however, are going to have to learn how to sell shoes: the lingering effects of a massive investment scandal, coupled with dwindling oil reserves, are forcing the country to rein in welfare and other government spending and make its native workforce more efficient and enterprising. Luxuriating in several decades of petroleum windfalls, Bruneians pay no income tax, while health care and education are largely free. As in the oil-rich Gulf Arab states, overseas workers from Malaysia, the Philippines, India, Pakistan, and Bangladesh have traditionally performed Brunei's dirty and dangerous work and filled semi-skilled jobs such as bank tellers.
Those days may be over as Brunei's local population of 350,000 feels the effects of a global slowdown. International Monetary Fund figures suggest Brunei's 2000 budget was balanced, compared with a deficit of about 30% of GDP in 1998. The economy grew about 2.5% in 2000, the latest year for which the IMF has data, after contracting 4% in 1998. Brunei officials are reluctant to reveal economic figures, but an Asian Development Bank official in Manila estimated 2001 growth at 2.9%. Oil prices have fallen and construction is at a standstill. The government has stopped hiring.
In response, Brunei's civil-service pension plan has been broadened into a national fund that covers private-sector workers as part of a plan to reduce its bloated bureaucracy. Whether Brunei workers can make the change to private enterprise remains to be seen. "Brunei workers are eager to learn and friendly, but they lack a lot of basic language and work-related skills," says Idahawaty Mohamad, a British small businessman in the fledgling tourism industry.
Anecdotal evidence suggests there are fewer expatriate workers. Engineers and construction workers have been particularly hard-hit, especially after Prince Jefri's state-owned Amedeo Development Corp - Brunei's major construction contractor - collapsed in 1998 with debts of US$3.5 billion. Ajai Chowdhry, the Indian high commissioner, says the Indian expatriate community is shrinking from last year's level of about 8,000. "There is outflow more than influx," he said.
Indeed, the government has cited unemployment as one of the most pressing problems. Officially, it was about 5% in 2001, but the real jobless rate is believed to be more than double that. Inflation ran at about 2.7% in 2001, the World Bank reported, up from an official average of just 0.5% in 1996-2000. In November 2001, Sultan Hassanal Bolkiah announced a US$550 million economic stimulus package to take effect this year.
Invigorating Brunei's economy might involve more than a one-time fillip. The country's dominant employer - after the government - remains Brunei Shell Petroleum, a joint venture between Brunei and the Royal Dutch/Shell Group. The venture pumps about 200,000 barrels a day, according to official data, accounting for about 40% of GDP and almost 90% of exports. Brunei is ranked 38th among the world's 102 crude oil producers by volume, according to International Energy Agency data, but is the fourth largest in East Asia. However, oil reserves are expected to disappear within 20-30 years and some drillers are already coming up empty-handed.
In August 2000, New Zealand-owned Fletcher Energy announced that it was halting Brunei exploration after only four months when its third well failed to find any significant oil or gas. Energy experts say Brunei probably does have unexploited reserves, but current technology hasn't been able to make them commercial. Industry and Primary Resources Minister Abdul Rahman Taib told a recent Tehran meeting that Brunei pins much of its future hydrocarbons income on developing and expanding its natural gas industry. "Long-term prospects for gas development in Brunei are excellent," agrees Lowell Feld, a US Department of Energy analyst in Washington.
But Brunei needs to move beyond oil and gas towards a true mixed economy. However, the very word "diversification" sends shivers down many Bruneian spines. That's because the country's first attempt at using its vast oil wealth to create growth ended in a humiliating failure that seared the country's psyche and created financial and social problems that will reverberate for years. The architect of the disaster was the Sultan's younger brother, Prince Jefri, formerly finance minister and head of the Brunei Investment Agency, set up in the mid-1980s.
Over a decade or so, Jefri allegedly spent US$16 billion on fruitless projects and a playboy lifestyle that brought the royal family and the country into disrepute. He was fired in 1998 when Amedeo Development failed amid more billions of dollars in debt. In 2000, Brunei's government began civil proceedings to recover the missing fortune. A secret deal was reached in 2001, but the tangled web that Jefri and his minions created may never be fully unravelled. The Brunei government managed to grab back luxury hotels in London and Paris and Jefri's notorious 50-metre personal yacht, named Tits. The settlement may have assuaged Brunei's government, but did little for foreign creditors seeking redress.
Still, the government recognises the issues that the Jefri scandal raised. "It's a blessing in disguise," a top non-royal official, Wahab Juned, director general of the Economic Council Secretariat, said earlier this year. "These things have opened up our eyes." Despite the scandal, and the deep shame that many Muslims felt, Brunei still has little of the intra-religious tension that characterises many Islamic nations. However, Jefri's antics did nothing to bring together Brunei's various conservative and liberal wings. His lifestyle cost him the succession - the sultan's son, Crown Prince Billah replaced Jefri as heir apparent - and the enmity of his powerful brother Prince Mohamed, a devout Muslim with ambition, who heads Brunei's more hawkish faction.
While Islam in Southeast Asia is generally more of a relaxed variety than that practised in the Middle East, Brunei spiritual life is sterner than in many places. The public sale and consumption of alcohol was banned in 1991. That has caused a thriving black market to flourish and has boosted the fortunes of former backwaters just over the border. Freewheeling - not the most common descriptive when used in connection with Malaysia - is the best way to portray the small, but bustling, neighbouring Sarawak towns like Miri and Limbang. Brunei middlemen and women - as well as their mainly ethnic-Chinese cousins from Malaysia - do a roaring trade by land and sea smuggling liquor, cheap cigarettes, electronics and other contraband into Brunei.
Similarly, as the government has tightened its purse strings and cut back on welfare and imports, the so-called "informal sector" has taken up some slack. Just over the choppy Brunei River from the capital's centre lies Kampung Ayer, the chaotic, but picturesque, stilt village that's home to 30,000 of the country's relative poor. (The national per-capita income figure of US$17,600 in 2001 - as high as that of New Zealand - may be skewed by the royal family's stupendous wealth). There, a furious domestic commerce takes place among families engaged in fishing and shrimp raising, marine transport, garments, flower growing and baking. Along the rushing brown Sungai Kianggeh, a major watercourse in Bandar Seri Begawan, market vendors share space with small handicraft and garment stalls. Some employ illegal Thai seamstresses laid off from the country's textile plants to boost production.
Despite such stirrings of entrepreneurship, much remains to be done. Agriculture, for example, remains largely unexploited. Only 15% of Brunei is cultivated, partly explaining the largely pristine tropical landscape. More than 80% of produce sold in Brunei is imported, as are 60% of seafood products. The government has a plan to promote food security, but little has been developed and existing programs have caused controversy. Shrimp farmers, for example, claim that preferential treatment is given to big farms owned by senior bureaucrats. The country's Fisheries Department denies the accusations.
The government has tried to launch a tentative development of its tourism industry, emphasising the country's largely unspoiled natural beauty. About 70% of Brunei is covered with rainforest. Outside the official program, a cruise ship operates from Brunei, aimed at ethnic Chinese both in Brunei and in Malaysia's state of Sabah. However, infrastructure such as transport remains a stumbling block. For instance, the entire nation has only 30 or so taxis.
With Bruneians owning an average of four cars per head, there's no local demand and not enough tourists to spur competition. "Sometimes I wait at the Sheraton Hotel all day and there's no work," says Ali Jumal, one Bandar Seri Begawan driver. Bruneians may soon have to stop waiting and start moving if they plan to get their economy back on track.