BRUNEI LEGISLATIVE COUNCIL: STILL A WORK IN PROGRESS

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