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Wednesday, 8 March, 2000, 21:58 GMT
Battle royal in Brunei
By Jonathan Head in Singapore
The start of a court case in Brunei this week threatens to shake this tiny, oil-rich state to its foundations.
The case pits 53-year-old ruling Sultan Hassanal Bolkiah, against his younger brother, Prince Jefri, whom he accuses in a legal suit of squandering vast amounts of government money.
So far, only hearings to determine a starting date for full legal proceedings have been held behind closed doors at the Brunei High Court.
Whatever the outcome, it will, for the first time, lift the cloak of secrecy which has always covered the way the sultan's family spends Brunei's massive oil wealth.
The case is bound to raise questions in the minds of the 300,000 citizens of Brunei about the sultan's hitherto unchallenged right to rule their country like a feudal king.
Just five years ago, Sultan Bolkiah was rated as the world's richest man, with personal wealth estimated at more than $40bn.
Today he may be down to his last $10bn, or less.
The decline in his financial fortunes may, in part, be explained by the Asian financial meltdown in 1997-8, which destroyed the value of shares and other assets, like hotels, which the Bolkiah family owned in the region.
The falling price of oil during this period, which accounts for most of Brunei's income, did not help.
But the biggest blow was struck by the profligate Prince Jefri, once the sultanate's finance minister and chairman of the Brunei Investment Agency (BIA).
The agency was supposed to divert oil revenue into profitable ventures to provide for the population when the oil runs out some time in the next 30 years.
Prince Jefri established a company called Amedeo, apparently named after the artist Amedeo Modigliani, some of whose work the prince had bought.
He installed his son, Hakeem, as the managing director.
Instead, Prince Jefri built a lavish entertainment park, trimmed in Italian marble, together with a six-star hotel.
He ordered a yacht, at an estimated cost of $500m.
The extravagance of his lifestyle was unmatched anywhere in the world.
It was scarcely in keeping with the officially conservative Islamic rule of his older brother, and the sultan now alleges it was financed by government money.
Amedeo collapsed under the weight of its debts in 1998.
Prince Jefri has blamed his downfall on the machinations of palace rivals.
Last month, the sultan took out an injunction freezing Prince Jefri's assets in Brunei and abroad.
He has sold some of the BIA's assets, like a stake in the Australian bank Macquaries.
But finding buyers for luxuries like the yacht, the entertainment park and the jewel-encrusted watches could prove a lot harder.
Of the $4bn owed by Amedeo, at least $3bn is believed to be owed to the BIA.
Given the lack of independent information about Brunei's finances, that amount could turn out to be a lot higher once the court case gets underway.
With the price of oil now rebounding towards an all-time high, Sultan Bolkiah should eventually be able to repair much of the damage done to the finances of the BIA by his brother.
It should also help him to maintain the extraordinary welfare provisions for his citizens - most of whom work for the government - which gives them free education and health care but asks for no taxes.
Wind of change
It is difficult to feel angry with a monarch who offers such a generous deal, and few Bruneians have questioned Sultan Bolkiah's autocratic rule.
There is only one opposition politician in the entire country.
Already he is said to be relying for political support on one of his other brothers, Mohammad, who is reported to be close to some of Brunei's more orthodox Islamic leaders.
Last month, Sultan Bolkiah gave an unprecedented address to the nation, in which he warned that the country was still too dependent on oil, and must diversify.
At times, he has hinted that he would like Brunei to emulate the economic success of that other Asian mini-state, Singapore.
But aside from their geographic proximity, Singapore and Brunei might as well be on different planets.
The people of Brunei have grown accustomed to leaving the affairs of state entirely to their royal family, in return for unrivalled prosperity.
No one else in the country seems ready to start sharing that burden, even in the unlikely event that the sultan did decide that a little democracy might be good for his country.
29 Jul 98 | Asia-Pacific
Sultan of Brunei sacks brother
17 Sep 98 | Asia-Pacific
Royal riches and family embarrassment
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