The Sultanate of Brunei's influence peaked between the 15th and 17th centuries when its control extended over coastal areas of northwest Borneo and the southern Philippines. Brunei subsequently entered a period of decline brought on by internal strife over royal succession, colonial expansion of European powers, and piracy.

In 1888, Brunei became a British protectorate; independence was achieved in 1984. The same family has ruled Brunei for over six centuries. Brunei benefits from extensive petroleum and natural gas fields, the source of one of the highest per capita GDPs in Asia.

Brunei and Malaysia reached a tentative deal in 2007 consultations to resolve their offshore and deepwater seabed dispute and resume hydrocarbon exploration, terminated in 2003, near the site of a major discovery; Malaysia's land boundary with Brunei around Limbang is in dispute; Brunei established an exclusive economic fishing zone encompassing Louisa Reef in the southern Spratly Islands in 1984, but makes no public territorial claim to the offshore reefs; the 2002 "Declaration on the Conduct of Parties in the South China Sea" has eased tensions in the Spratly Islands but falls short of a legally binding "code of conduct" desired by several of the disputants.

Brunei has a small well-to-do economy that encompasses a mixture of foreign and domestic entrepreneurship, government regulation, welfare measures, and village tradition. Crude oil and natural gas production account for just over half of GDP and more than 90% of exports. Per capita GDP is among the highest in Asia, and substantial income from overseas investment supplements income from domestic production.

The government provides for all medical services and free education through the university level and subsidizes rice and housing. Brunei's leaders are concerned that steadily increased integration in the world economy will undermine internal social cohesion. Plans for the future include upgrading the labor force, reducing unemployment, strengthening the banking and tourist sectors, and, in general, further widening the economic base beyond oil and gas.

Source: The World Factbook, CIA.