Brunei

Area 2,055 square mi (5,770 square km)
Population 423,200 2014
Capital Bandar Seri Begawan
Highest Point Bukit Pagon 6,105 ft (1,850 m)
Lowest Point 0 m
GDP $17.26 billion 2014
Primary Natural Resources petroleum, natural gas.

THE SULTANATE of Brunei is one of the world's smallest countries, but also one of the world's richest. A major landpower in the 15th century, the territory ruled directly by the sultan is now smaller than LUXEMBOURG, but its economic impact in the region is far greater due to the blessings of abundant petroleum and natural gas reserves. Its full name, Brunei Darussalam, is a compound of a Sanskrit name (possibly meaning “sea people” or the name of a local tree that also gave its name to the entire island of Borneo), plus the Arabic for “abode of peace,” added to the name by Muslim sultans in the 15th century.

Brunei is one of the four political components that make up the island of Borneo, along with Kalimantan (part of INDONESIA), and Sabah and Sarawak, two states of the federation of MALAYSIA. Sarawak surrounds Brunei and in fact divides it into two pieces. Sabah, Sarawak, and Brunei were at one time all component parts of the British East Indies colonies, but Brunei declined to join the Malay federation in 1961 and remained a British protectorate until 1984, preferring to rely on its own natural resources.

These resources, in combination with a relatively small population, make Brunei's per capita income one of the highest in the developing world. The sultanate has been ruled by the same family for six centuries, and the sultan is considered one of the richest individuals in the world: It is said he earns $100 per minute from oil. Brunei's oil production is estimated at 163,000 barrels a day; its output of liquefied natural gas is the fourth largest in the world.

The country consists of a flat coastal plain along the South China Sea in the western part of the country, with some hills further inland. Mountains rise in the eastern segment of Brunei, which is also the most undeveloped and inaccessible part of the sultanate. An equatorial climate gives the area abundant rainfall, and most of the country remains heavily forested, with mangrove swamps along the coast. Most of the people live in the capital of Bandar Seri Begawan, along with its chief port of Maura, 25 mi (41 km) to the northeast. The other major town is Seria, the center of the oil and gas industry, in the western part of the country. Bandar includes great contrasts, between the sultan's palace and the glittering Sultan Omar Ali Saifuddien Mosque and the world's largest stilt village, Kampung Ayer. This village, in existence for 400 years and providing housing for about 30,000 people, was declared a national monument in 1987 and is the most popular tourist attraction in the country.

His Majesty Sultan Haji Hassanal Bolkiah Muiz'zaddien Waddaulah, the Sultan and Yang Dipertuan of Brunei Darussalam, leads a relatively extravagant life, but is generally ignored by the religiously conservative Islamic population. The sultan is the sovereign in more than just name: Elections have been suspended since 1962, and there is little sense of change in the near future.

At its height in the 15th century, the sultanate controlled the entire north and west coast of Borneo, plus the Sulu archipelago (now in the Philippines). After its first encounter with European colonial powers—it was briefly occupied in 1580 by Spain—Brunei entered a long period of decline, and by the 18th century was a principal center for piracy and slave trade. Labuan, an island commanding the entrance to Brunei Bay, was ceded to Great Britain in 1846 chiefly to protect against this, and by 1888 the entire state was a British protectorate. Economically, Brunei was known only for its exports of gambier, a dye produced from mangrove trees used in dying of leather.

Then, in the early 20th century, large oil reserves were discovered, first onshore in the region of Seria and Kuala Belait, but mostly offshore by the 1990s. The British Malayan Petroleum Company was the greatest producer of crude oil of any British colony in the post-World War II era, but it is Royal Dutch Shell that has become the major company involved in Brunei's oil industry. Revenues derived from this company alone have been significant in what is sometimes called the “Shellfare State,” in which all local residents enjoy free education, health care, and no taxation. Local residents (mostly of Malayan extraction) are less willing to work in industry, so there is a sizable immigrant community of Filipinos and Thais. Oil reserves are expected to last 40 years, but the sultan's government is already implementing a National Development Plan to reduce Brunei's dependence on oil-based industries; $7.2 billion has reputedly been allocated for this plan, investing in production of rice, fruit, fisheries, and livestock—in 1981 the government purchased a cattle ranch in northern Australia that is larger than the entire country—with an equal push to boost tourism.