A tiny country with a small population, Brunei was the only Malay state in 1963 to choose to remain a British dependency rather than join the Malaysian Federation.
It became independent in 1984 and, thanks to its large reserves of oil and gas, now has one of the highest standards of living in the world.
Its ruling royals, led by the head of state Sultan Hassanal Bolkiah, possess a huge private fortune.
A country of dense forests and mangrove swamps whose people enjoy high subsidies and pay no taxes, Brunei is highly dependent on imports.Oil exports
Despite its immense wealth, most of the country outside the capital remains undeveloped and unexploited.
While oil and gas exports account for the bulk of government revenues, reserves are dwindling and Brunei is attempting to diversify its economy. It markets itself as a financial centre and as a destination for upmarket and eco-tourism.
About two-thirds of the people of Brunei are ethnic Malays, and these benefit from positive discrimination. The Chinese comprise about 16% of the population. There are also Indians and indigenous groups, of whom the Murut and Dusuns are favoured over the Ibans.Rule by decree
Since 1962 the sultan has ruled by decree. In a rare move towards political reform an appointed parliament was revived in 2004. The constitution provides for an expanded house with up to 15 elected MPs. However, no date has been set for elections.
In 2013 the sultan announced that a tough Islamic penal code would be introduced, with possible punishments to include stoning for adultery, amputation for theft and flogging for drinking alcohol.
Brunei's financial fortunes have wavered. Shares and other assets were hit by the crash of the Asian financial markets in the late 1990s. In 1998 Prince Jefri's Amedeo conglomerate collapsed, leaving massive debts and precipitating a financial scandal.