The Sultan of Brunei
Text and photography by Eric Pasquier
Hassanal Bolkiah, Sultan of Brunei, is one of the richest men in the world thanks to the country’s massive oil reserves and the rising prices for that commodity. However, the sultan knows how relative his fortune is since oil prices are fickle.
A few years back, he was worth $40 billion, outstripping even Bill Gates, only bottom out at $10 billion in 2002 when oil prices plummeted. How does this relative fall in wealth affect Brunei and its ruler and how is the Crown Prince being groomed for a new style of government?
Around $40 billion. That’s what the Sultan of Brunei, once the richest man on earth, was worth. Attached to the island of Borneo, the sultan’s little kingdom of Brunei Darussalam has nothing particularly exceptional to show for it – except maybe for the oil and natural gas reserves underneath it. And for many years the black gold brought him some phenomenal revenues.
Hassanal Bolkiah is the 29th head of a royal dynasty that dates back some 600 years and has ruled Brunei since his father abdicated the throne in 1967. At its peak, his wealth amounted to a fabulous $38 billion, derived almost entirely from the oil and gas fields that this little country is fortunate enough to be sitting on.
But the personal fortune of the sultan was hit by events beyond his control.
The oil industry went through some rough times and the Asian economic crisis that reverberated around global currency markets also left some deep scars.
To make matters worse the sultan’s brother, Prince Jefri, was alleged to have squandered nearly $3 billion while his failing company left debts of a crushing $6 billion.
All of which ate away at Hassanal Bolkiah’s fortune. Forbes estimates that the Sultan’s coffers shrunk to a paltry $10 billion in 2002.
However, the war in Iraq and high demand – particularly in China – has lifted oil prices with no end yet in sight. That helped the sultan bounce back to $20 billion in 2005
Brunei, on the eastern part of Borneo, is tiny and counts a population of just 365,000. It won its independence from the British in 1984 and the state’s powers and wealth are pretty much those of the sultan – when he said ‘L’Etat C’est Moi’, echoing Louis XIV, he wasn’t kidding.
However, the winds of change are not completely passing this sultanate by. In September 2004 parliament was opened for the first time in 20 years. The country is even expected to hold parliamentary elections by the end of 2005 for the first time since 1962.
Hassanal Bolkiah is head of state, Prime Minister, Minister of Defense, Minister of Finance and religious leader of the faithful. Brunei is mainly Muslim, and in honour of Allah, the sultan built a gigantic mosque whose two domes are cast in pure 24-carat gold.He was just as lavish when it came to spending money on himself.
His 1788-room palace is larger than the Vatican and is covered with Carrara marble; his personal fleet of cars counts some 300 models, including dozens of Rolls Royces; he goes shopping in Singapore, London or New York; he owns a personal fleet of Boeings.
In short, he lived the life of a fabled prince and, with the oil reserves not expected to run out for another 20 or 30 years, he was optimistic about being able to continue to live it up.
However, the year 2002 – when the sultan’s personal fortune fell to a record low of $10 billion - forced him to sell off some of his assets to keep his billions spinning. Jefri, the Sultan’s brother, was ordered to rid himself of assets like Asprey and Garrard Jewellers, around 2000 cars, 117 planes, and a $500 million yacht and to make do with a monthly allowance of $300,000.
It is commendable that the Sultan first pruned his own expenditures and those of the royal family, rather than laying the burden on his people, as done by so many heads of state who centralise power and wealth in their own hands. The 365,000 citizens of Brunei still pay no taxes and enjoy free medicare and education. They have one of the highest standards of living in the world. The average income in Brunei is $14,192.
This situation may not, however, continue for long. Brunei’s reserves will run out in around 20 years. Given the fact that 60% of the country’s population is employed in the oil sector, a sudden drying up of reserves would be disastrous for Brunei – a country whose dependence on oil has given it the nickname the Shellfare State. Diversification has become a necessity.
The man likely to oversee the smooth changeover from an oil-based national economy to one not so vulnerable to falling oil prices is the Sultan’s 28-year-old son, Crown Prince Al-Hutadee Billah. He was declared successor in 1998 and will be the 30th Sultan of Brunei. He has an interesting challenge ahead of him.
Educated at Magdalen College, Oxford University, but equally versed in Quranic Law, he has one foot in the West and the other in Islam. Already he is working on possible solutions to the country’s rather enviable predicament – he has been sent on attachments both to government agencies and the private sector, as well as the United Nations, World Bank, WTO and International Monetary Fund. While on whirlwind tours, he has also met with other heads of state from Europe, Asia and the Arab States.
He is clearly a young man being groomed for the government with ties to the outside world – if and when the oil runs out, Brunei Darussalam will need economic allies. And who knows; perhaps the Crown Prince will find new ways to nudge the Sultanate’s fortunes back up the table of wealth to the number one spot.
Copyright © Eric Pasquier