VZCZCXRO8527
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBD #0081/01 0930758
ZNR UUUUU ZZH
R 030758Z APR 09
FM AMEMBASSY BANDAR SERI BEGAWAN
TO RUEHC/SECSTATE WASHDC 4494
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLLECTIVE

UNCLAS SECTION 01 OF 02 BANDAR SERI BEGAWAN 000081 
 
SENSITIVE 
 
SIPDIS 
 
DEPARTMENT FOR EAP/MTS/COPPOLAMG 
 
E.O. 12958: N/A 
TAGS: PGOV PINR PHUM ECON BX
SUBJECT: BRUNEI LEGISLATIVE COUNCIL: STILL A WORK IN PROGRESS 
 
REF:  BANDAR SERI BEGAWAN 59 
 
SUMMARY 
------- 
1.(SBU) On March 12, 2009, The Sultan of Brunei opened the fifth 
Legislative Council (LegCo) session since its reinstatement in 2004. 
 The global economic crisis was front and center during discussions, 
although Brunei is riding out the storm well. However, budget 
revenues are forecasted to drop slightly.  While there was some 
discussion, the overall substantive debate was limited.  One LEGCO 
member said that there needed to be more transparency, especially 
regarding residency requirements.  The press was limited by 
government instruction on the level of budget details, especially 
regarding government subsidies, that could be published.  The 
eight-day protocol-conscious session received mixed reaction from 
the public because of a lack of "heated" debate.  However, there was 
more discussion than in years past. In addition, there were public 
calls for more transparency and debate. The Legislative Council 
remains a work in progress, with forward momentum on democratic 
principles slow.  End Summary 
 
LEGISLATIVE COUNCIL BACKGROUND 
------------------------------ 
2.(U)The Legislative Council (LegCo) is comprised of: 14 Ex-Officio 
members that included the Prime Minister, His Majesty the Sultan of 
Brunei, the Senior Minister at Prime Minister's Office, the Crown 
Prince, the Minister of Foreign Affairs and Trade, Prince Mohammad, 
and twelve appointed cabinet ministers. The non-government appointed 
members included seven dignitaries and one representative each from 
the four districts (Brunei-Muara, Tutong, Kuala Belait and 
Temburong).   His Majesty has stated that members should express 
their views without fear, doubt or hesitancy. 
 
OPENING DAY: SULTAN FOCUSES ON ECONOMICS 
----------------------------------------- 
¶3. (SBU)At the opening of the Legislative Council (LegCo), attended 
by Ambassador Todd, The Sultan said Brunei is fortunate that its 
socio-economic situation remains stable. However, he also noted that 
the government revenue has been dropped, slightly, due to declining 
oil prices. The Sultan said he has created a Sustainability Fund, 
within the Ministry of Finance, to control and regulate the 
management of funds, In addition, he noted Brunei's Fiscal 
Stabilization Reserve (FSR) Funds are the key sub-fund which serves 
as a means to eliminate or reduce the oil revenue deficits, if they 
occur. Any depreciation in the government's oil revenue will be 
compensated by transferring funds to the FSR Fund from the 
Sustainability fund. 
 
 
BRUNEI GOVERNMENT BUDGET AND ANTICIPATED DEFICIT 
--------------------------------------------- --- 
4.(U)The LegCo passed a BND 4.98 billion budget for 2009/2010 which 
saw a increase of BND 200 million from the 2008/2009 BND 4.78 
billion. Despite the budget increase, the Minister of Finance II, 
Pehin Rahman Hj Ibrahim predicts a BND 1.68 billion deficit after 
the revenue of 2009/2010 fiscal year is projected to drop to BND4.03 
billion from the BND5.602 billion in the 2008/2009 fiscal year. The 
projection took into account the expected increase in government 
services revenue and Corporate Income Tax at $766 mil compared to 
$704 mil last year.  Pehin Rahman underscored that the revenue from 
the non oil and gas sector and government services only supports 19% 
of the total predicted government expenditure. 
 
5.(U) The 2009/2010 budget was allocated into the following areas: 
BND 1, 060,900,000 for human resources development and capacity 
building, BND 1,046,000,000 for Defense and Security, BND 680.73 mil 
for construction sector and public facilities, BND 340.5 mil for 
improvement of medical health services, BND 270.3 mil for 
socio-economic and public welfare, BND178.17 mil for expansion and 
strengthening private sector, BND30 million for the disaster 
preventive budget, and BND10 mil for collecting relevant data to 
eradicate poverty. 
 
TRANSPARENCY AND PERMANENT RESIDENT STATUS 
------------------------------------------ 
6.(U)Pehin Goh King Chin, a business tycoon and the only Chinese 
non-government LegCo member, urged government agencies to be more 
transparent in the GoB guidelines regarding permanent residency (PR) 
status. (NOTE: Permanent Residency remains a particularly sensitive 
issues, especially in the ethnic Chinese community. End Note.) 
Pehin Goh noted that "when an application is made and not approved, 
it the reasons for rejection should be more transparent". Pehin Goh 
also made a plea to allow husbands of PR women to remain in Brunei. 
He explained that foreign husbands must return to their home country 
at the retirement age resulting in the separation of family. He 
stressed that "separating a family can be considered as a crime 
under international laws on basic human rights".  In this context, 
he proposed for the relevant committee to review the requirements 
for the PR status to solve this problem.  Pehin Goh also rekindled 
 
BANDAR SER 00000081  002 OF 002 
 
 
the debate on the unresolved issue of ownership of properties by PRs 
who are Bruneians holding certificates of identification, which was 
tabled at the last session. 
 
THE LIMBANG CLAIM BLUNDER CLARIFIED 
----------------------------------- 
7.(SBU) The LegCo session coincided with the signing of Brunei - 
Malaysia Letters of Exchange to resolve their territorial dispute. 
The signing stole much the public and political spotlight from the 
LegCo session.  As noted in Reftel, there were a series of media 
statements made regarding the disputed province of Limbang.  In 
response to a question on Limbang, Pehin Lim Jock Seng, the Minister 
of Foreign Affairs & Trade II and only Chinese government member, 
said during a LegCo session issue of claims over Limbang were never 
discussed.  Per reftel, the local media was instructed to make Pehin 
Lim's comments headlines the following day. 
 
 
GOVERNMENT SUBSIDIES: DISCUSSED BUT NOT MADE PUBLIC 
--------------------------------------------- ------ 
8.(SBU)At the closing of LegCo, the Minister of Finance II, Pehin 
Rahman, highlighted the amount of government subsidies and credited 
Brunei's welfare system as the most generous in the world.  At 
present, the government supports the welfare burden comfortably, 
according to Pehin Rahman.  However he noted that, "the nation's 
income source has yet to achieve the aspired diversification". 
Pehin Rahman read out each of the itemized subsidies list to prove 
his point.  However, a Borneo Bulletin journalist told the Embassy 
that the press received instruction from the Ministry of Finance not 
to publicize the list.  To overcome the forecasted budget deficit, 
Pehin Rahman stressed to the public must exercise "prudent spending 
and avoid wastage on subsidized items like power usage and petrol". 
He also urged LegCo members to find out effective ways of raising 
public awareness to settle dues to finance valuable projects to 
create more employment and reduce poverty". 
 
 
BRUNEI'S PUBLIC REACTION 
------------------------ 
9.(SBU) There was a positive impact where locals noted the LegCo is 
now starting to speak about the sensitive issues of Permanent 
Residence openly. 'Bruneiresource' blogger, the Permanent Secretary 
at the Ministry of Development, Rozan Yunos said the session was 
"important so that the public can raise important questions in a 
public chamber through appointed representatives" and advised the 
public that, "if you want to hear your questions, you better know 
who your district representatives are and email them what you need 
them to ask." The Dean of Faculty Business, Economics and Policy 
Studies at the University of Brunei Darussalam, Dr Roger Lawrey, 
commented on the Sustainability Fund as "very prudent and exemplary 
move made by the government to protect its (Brunei) income and 
revenues for sustainability". 
 
10.(SBU)However, many Bruneians were disappointed or indifferent 
because the session was primarily scripted and deliberated in a 
highly protocol-conscious manner. The lack of interest from the 
public was evident as there were only a handful of non-government 
observers like students and foreign missions at the session despite 
it being open to the public. 'Brunei LifeStyle' blogger summed up 
public sentiment by saying "the session could have had more heated 
debate." Another local observer agreed that the "meeting lacked the 
true sense of debate" where "most of the deliberations of the 
meeting followed a repetitive cycle".  In addition, Brunei's only 
political party, then National Development Party (NDP), took no 
interest in the LegCo session, and did not make any comments on 
their official website or observe the session. 
 
COMMENT 
------- 
¶11. (SBU) There was little public interest in LegCo as Bruneians 
knows that the session is often scripted.  This scripted nature was 
evident during Embassy officials' observation of LegCo sessions. 
However, Brunei's budget deficit does pose as a real public concern, 
along with the level of government subsidies.  While there was some 
public discussion of the budget, subsidies, and other general 
welfare concerns, the GoB's restrictions on releasing detailed 
information to the public, via the media, limited debate and public 
discussion. Overall, the Fifth Session of the Legislative Council 
saw more discussion and question and answer sessions with GoB 
Ministers.  There was acknowledgement of potential budgetary woes 
and a realization that unlimited subsidization cannot go on forever, 
However, real decision making authority, full debate, and true 
public interaction are lacking. 
 
TODD