During 1995 Brunei demonstrated a growing assertiveness within the region. In its continuing quest to preserve political stability and achieve sustainable economic growth, the resource-rich Sultanate attempted to pursue regional economic integration and yet maintain the conservative and absolutist nature of its government. Although a small state, Brunei's engagement in regional affairs has not been insignificant, as evidenced by its commendable chairmanship and hosting of the second ASEAN Regional Forum, which saw the defusion of tension in the South China Sea. Brunei's entry into international financial institutions such as the World Bank and the International Monetary Fund in 1995 also raised its economic profile. It strongly supports the concept of trade liberalization and favours the proposal for free trade within APEC (Asia-Pacific Economic Co-operation) by the year 2020. Within ASEAN, the Sultan has called for the early implementation of the ASEAN Free Trade Area (AFTA). Brunei has also been positive about the benefits that can result from subregional co-operation through the newly-established East ASEAN Growth Area (EAGA) and has been trying to carve out an important role for itself within the growth polygon.

The year also saw Brunei continuing to be plagued by the problems resulting from its heavy dependence on the hydrocarbon industry. Its efforts at broadening the economic base and expanding the non-oil sector have made very slow progress and its growth rate is among the lowest in ASEAN.

Domestic Affairs

The government in 1995 continued to give prominence to Islamic values under the aegis of its official ideology, Melayu Islam Beraja (MIB, Malay Islamic Monarchy), which has been actively sponsored since 1990. While serving to neutralize the appeal of externally inspired Muslim fundamentalism, MIB can also be seen as an instrument of legitimacy for royal absolutism, by marrying the conservatism of Islamic values with that of Malay culture and the traditional unifying role of the monarchy.