SOAS MEMORIAL LECTURE

 SOAS Memorial Lecture 2013 – How Did Korea Grow So Fast? Lessons for Developing Economies by Dr. Han Seung-soo

Speech by:

Dr. Han Seung-soo KBE
Former Prime Minister of the Republic of Korea
President, the 56th of the United Nations General Assembly

SOAS Memorial Lecture 2013
International Convention Centre, Berakas
Brunei
29th October 2013

I am very pleased and honoured to be invited to speak to you at this important public lecture in memory of Sultan Omar ‘Ali Saifuddien Sa’adul Khairi Waddien.

The late Sultan Omar ‘Ali Saifuddien Sa’adul Khairi Waddien was a great man, the Architect of Modern Brunei, who devoted his life to restore the monarchic dignity of Brunei and worked tirelessly for the peace, security and the well-being of the Brunei people.

In the unsettling and rapidly decolonizing early years of the United Nations after the Second World War, he was pivotal, through diplomatic ingenuity and patriotic persuasion, in safeguarding the independence of this nation at the time when the international and regional political situations were changing not necessarily to the advantage of this small country, Brunei.

It is indeed a great personal honour for me to be invited to speak at this commemorative lecture as I also come from a country that has gone through a similar stage of international and regional political and economic difficulties.

I would like to express my sincere appreciation particularly to His Royal Highness Prince ‘Abdul Malik, Chairman of the Committee of Governors of the Yayasan Sultan Haji Hassanal Bolkiah for his kind invitation.

I am also most grateful to His Majesty Sultan Haji Hassanal Bolkiah for the kindest support to invite me to this Memorial Lecture.

I remember with a fondest memory, my last visit to Brunei in November 2001 when as Korea’s Foreign Minister, I took part in the ASEAN+3 Summit Meeting here in Brunei. All of us attending the ASEAN+3 were very much impressed by the efficient organisation of the meeting but above all, greatly appreciated the kindness and the hospitality of the people in and out of the conference room at the time. The country I visited then for the first time was very clean and beautiful. After 12 years later, Brunei is even cleaner and more beautiful, more peaceful and prosperous and better known to the world.

Since then Brunei has been very active in expanding its global and regional outreach. The recent ASEAN+3 Summit and the East Asia Summit which President Park Geun-Hye of the Republic of Korea attended and Brunei hosted so successfully a little more than two weeks ago succinctly testify to an increasing role that Brunei has been playing in the international and regional affairs.

In the summer of 1963, 50 years ago, Sultan Omar ‘Ali Saifuddien Sa’adul Khairi Waddien went to London at the invitation of the British Government. It was in London at that time that the Sultan took the major but very difficult decision to stay out of Malaysia, defining the destiny of this nation. It was a very crucial decision but on reflection, a very correct and rightful one for the future of Brunei and its people.

In the same summer, 50 years ago, I also arrived in London to pursue my post-graduate studies in Great Britain.

At that time, Korea was one of the poorest countries in the world. Its per capita income was less than US$100. Because of the shortage of foreign exchange reserves, the Koreans were permitted to leave the country with no more than US$100. When I arrived in Great Britain in the summer of 1963, I had US$90, about £30 at the going exchange rate in my pocket.

When I went in to live in a dig introduced by the University accommodation office, my landlady, Mrs. Forth, seeing me for the first time, seemed to be somewhat puzzled. When I asked why she was so at a loss seeing me, her reply was “Why aren’t you black?” When asked why I should be black, her reply was “Aren’t you from Africa?” She thought Korea was located somewhere in Africa. Such was the knowledge of working men and women of Great Britain about Korea 50 years ago. At that time, Korea’s image in Great Britain and the world was the country nothing but of war, poverty, endemic disease, coup d’etat, dictatorship, street demonstration, police brutality, human rights violation, orphans and the likes.

At that time, we as a nation had much a catching-up to do in order to make Korea an economically prosperous, politically free-democratic, socially inclusive and culturally vibrant country. But as we had no natural resources at the time, we had to create something out of nothing.

In April 2002, 11 years ago, I visited Ghana on my way to Sierra Leon where in my capacity as President of the 56th Session of the United Nations General Assembly, I went to inspect the United Nations peace-keeping operations. At that time, I had a summit meeting with President of Ghana, President John Kofi Agyekum Kufour in his Palace in Accra and then had a joint press conference.

President Kufour had invited me to Ghana the year before when both of us attended the Nobel Peace Prize Banquet and Dinner in Oslo in December 2001. As you may know, I received the centenary Nobel Peace Price on behalf of the United Nations in Oslo on December 10th, 2001. President Kufour was invited to the ceremony as one of his countrymen, Mr. Kofi Annan, then the Secretary-General of the United Nations, also received the Nobel Peace Prize with me on his own behalf.

At the press conference, President Kufour openly asked how was it that when Ghana gained independence in 1957, Ghana’s per capita income was US$300, three times more than that of Korea, but while its per capita income still remained US$300 in 2002, the per capita income of Korea reached US$10,000. He liked to know the secret of Korea’s economic success.

In June this year, 11 years later, I once again visited Ghana to attend an international conference. A decade later from my first visit there, Ghana’s per capita income was still around US$1,500 while Korea’s per capita income adjusted by purchasing power parity reached US$30,000 in 2012.

Korea has now become the 12th largest economy with GDP of about US$1.1 trillion and the 8th largest trading nation with a total trade of US$1.07 trillion in 2012. Its foreign reserve stands at over US$300 billion. Korea is now the aid donor; the only developing country that moved from the recipient of the official aid to the 24th member of the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee, the donor committee of developed nations in 2010.

When Korea was very poor, the OECD, the so-called club of rich nations, was our dream. In 1996, 33 years from the day I set my foot in London, Korea was finally admitted to the OECD. Personally it was a very moving moment because in my capacity as Deputy Prime Minister and Minister of Finance, I was the chief principal minister-in-charge of successful negotiations for accession to the OECD. You can imagine the great sense of achievement that I personally entertained at the time.

When I was Prime Minister of the Republic of Korea later, I served as the Chair of the 2009 OECD Ministerial Council Meeting where I was able to garner the unanimous support of the participating ministers to pass a resolution on the Declaration on Green Growth, the new paradigm of growth to promote quality-oriented, low carbon green growth for the world; the paradigm shift I would describe more in details later in the speech.

Korea and the Koreans were often misunderstood in the past. Sometimes they were oversold but oftentimes, they were undersold. However, it is true that Korea has now become more widely known for good or bad all over the world than when I was growing up.

With the advancement of democracy and human rights, the rapid development of the national economy, the increase of the middle class, the Seoul Summer Olympic Games of 1988 and the World Cup of 2002, Korea’s forthcoming PyongChang Winter Olympic Games of 2018, APEC Summit meeting in 2005, the G-20 Summit Meeting in 2010 which a non-G8 country hosted for the first time, Nuclear Security Summit in 2012, UN High Level Forum on Aid Effectiveness last year and World Energy Congress a few weeks ago in Korea, Korea is a totally different country compared with 50 years ago, or even 30 years ago.

Korea is now a global leader in several manufacturing sectors. Korea is the world leader in DRAM memory chips with 65.7 percent of global market share, in LCD displays with 51 percent global market share, in the mobile phone market share, and in shipbuilding, in automobiles, in refinery capacity and in steel production.

Korea is one of the leading countries owning a large number of the intellectual property rights after the US, Japan, Germany and China with 11,848 international patents applied in 2012. Korea ranks the highest on the government broadband index and has the highest smartphone penetration rate with 58 percent of Koreans owning smartphones in 2012 as compared with 42 percent in the US and 39 percent in the Western European countries.

Korea is now the home of many Olympic medals and lady golf championships. The Koreans constructed the tallest buildings in the world, Petronas in Kuala Lumpur in 1996 and Burj Khalifa in Dubai in 2010. The K-pop such as Gang-nam Style and Korean drama waves, Hallyu, are sweeping Asia and the world. Korean art with such video-artist like Paik Nam June, the largest number of talented classical musicians, sports people such as footballer Park Jusung, figure-skater Kim Yuna, and golfers like Park Inbee and with the Korea’s London Olympic team in 2012 winning 28 medals, ranking the 5th in the 2012 Olympic chart. With these and now millions of Koreans travelling abroad nowadays, Korea is becoming a name of a country well known throughout the world.

In the area of international peace, development, human rights and the eradication of global poverty and endemic diseases, one cannot but hasten to mention that the heads of two most important international organizations, the United Nations and the World Bank, were born in Korea. Ban Ki-moon, the UN Secretary-General is a Korean and Jim Yong Kim, the President of the World Bank is a Korean-American.

Thus, Korea indeed has changed and changed very rapidly during the last half century. Today I would like to concentrate only on the economic success story, what its secrets are, and how Korea can offer the lessons to other developing countries.

As I said, Korea was one of the poorest countries in the world in 1962 when we embarked on the First Five-Year Economic Development Plan (1962-1966). However, it is amazing to note that Brunei had a long-term development plan ahead of most of developing countries already in the 1950s. Sultan Omar ‘Ali Saifuddien’s benevolent concern to his people resulted in the formulation of the First Five-Year Development Plan for the years, 1953-1958. It was a decade before Korea ever conceived of formulating a similar long-term plan. His Royal Highness had such an insight and vision. He has been an inspiration to all the developing countries even then.

If I were to enumerate the most momentous events in the economic history of the Republic of Korea since 1960s, they are as follows:

1. President Park Chung-hee’s visionary and clean leadership and the formulation of the economic development plan in 1962.
2. Nixon Doctrine and the initiation of Heavy and Chemical Industry Development in the early 1970s.
3. Oil Crisis and the Economic Stabilization Policy in the early 1980s.
4. Asian Financial Crisis and Globalization of Korea economy.

I would like to explain these events and the relevant policies in more details.

Korea’s First and Second Five Year Plans (1962-1971) initiated by President Park Chung-hee which embraced ‘The Economy First’ Principle emphasized on the development of light industries, the export-oriented development, investment in infrastructure and the development of key industries such as fertilizer, cement and steel industry.

At the time, Korea’s financial resources both domestic and foreign were very much limited. In order to mobilize domestic resources for economic development, the National Tax Service was established in 1966 to increase the tax revenues. In order to encourage the inflow of foreign financial resources, the Bank of Korea provided repayment guarantees for foreign loans.

Korea was endowed with few natural resources but had a large, efficient and diligent labour force. Therefore Korea’s export-oriented industrialization was initially focused on the labour-intensive light industries. As a consequence of export promotion policy, the export increased by 20 times within ten years between 1961 and 1970. The per capita income of US$82 in 1961 increased to US$253 by 1970. The average annual GNP growth rate was 8.8% more than the target growth rate of 7.1%. It was for this reason of unexpectedly high growth that the term, The Miracle on the Han River was coined.

In July 1969, the Nixon doctrine was declared and the Bretton Woods system collapsed in August 1971. Korean government realized then that heavy reliance only on light industry would neither sustain Korea’s rapid economic transformation nor would prepare Korea for the self-defense system as the Nixon doctrine implied the American disengagement from the Korean peninsula. Korea had to defend itself and therefore needed to have its own defense industry. The Korean government had to change the emphasis from the light manufacturing to the heavy industry. The Heavy and Chemical Industry (HCI) Promotion Plan was announced therefore in May 1973.

The HCI promotion concentrated on steel, petro-chemicals, shipbuilding, machinery, electronics and nonferrous metals industries. To promote the plan, the monetary and financial support was designed to give preferential interests rate even below the inflation rate as well as to give special tax reduction and exemption measures. This industrial policy expedited the growth of Korea’s typical business-financial conglomerates, i.e. the chaebols.

With the political instability caused by the assassination of President Park Chung-hee in 1979, the macroeconomic imbalance due to the HCI overinvestment and the second oil crisis, Korea needed to drastically stabilize the national economy. The major economic problems that Korea faced in the late 1970s and the early 1980s were chronic inflation, imbalance of current account, large foreign debt and investment distortion.

It was a major crisis, both political and economic, that Korea faced for the first time in almost two decades. Korean economy needed a fresh start with new policy. Economic growth could not be sustained without controlling inflation. In order to remedy the situation, Korean government announced the economic stabilization policy in 1980, and even introduced a zero-base budget for 1982. This was a very drastic and dramatic economy policy of Korea at the time. No other major countries in the world have ever implemented the zero-base budget before or since then.

The successful implementation of the economic stabilization policy in the early 1980s enabled Korea to prepare for another major economic take-off in the middle of 1980s. External factors also contributed to the success of Korea’s economic development during the late 1980s. The so-called Three Lows, low oil price, low exchange rate and low interest rate helped Korea restore its competitive edge once again.

In July 1993, Korea announced a New Economy Five-Year Plan to liberalize the financial market. By December 1995, Korea’s per capita income exceeded US$10,000 mark and Korea was admitted to the OECD in December 1996.

Then the international financial crisis of 1997 struck Korea. The Asia’s financial crisis that began in Thailand reached Korea in the second half of 1997 and the Korean government had to agree with the International Monetary Fund (IMF) for a financial rescue package of US$57.6 billion. However Korea was able to pay them back in August 2001, 3 years ahead of schedule.

At the time, our approach to deal with the international financial crisis was to further open and more liberalize the capital market. As opposed to the open market approach a la Korea, Malaysia at the time adopted the different, opposite approach by closing the domestic financial market to the outside world. However, both countries succeeded in overcoming the Asian financial crisis in due course and it has now been left to the economic researchers to find out why and how both policies diametrically opposed, could succeed.

Thus, Korea was able to overcome the Asian financial crisis within a few years and Korean economy was put on a normal growth trajectory. However, the collapse of Lehman Brothers 10 years later in September 2008 once again brought about the international financial crisis of historical magnitude and we had to deal with it. At the time I had already been called back to serve as Prime Minister and the management of the national economy was one of my immediate responsibilities.

I hope you would allow me if I were to diverge a little bit at this juncture and to speak on how the leader’s experiences interact with the nation’s economic realities to produce a new strategies and policies. I would like to relate my own international political experiences in strategizing Korea’s new economic policy paradigm.

As some of you may know, I am an economist by profession and had long been Professor of Economics at Seoul National University before I entered politics in 1988. I was elected Member of the National Assembly in my constituency, Chuncheon city, Gangwon province, the most mountainous region in Korea where my family had lived since the early 15th century.

However, I left politics in 2004 voluntarily at a time when my popularity in my district was overwhelmingly high and I could have been easily re-elected for further terms. The year 1988 marked my 16th year in politics. Had I run for the National Assembly in that year, my political career would have spanned 20 years, which would have been 2 years longer than I worked as Professor of Economics at Seoul National University. At the time entering politics in 1988, I had promised to myself that I would not stay in politics longer that I spent in academia. Not wishing to renege on my own promise to myself, I left politics without any lingering attachment to it.

Interestingly enough, by doing as such, I was actually following Korea’s long tradition of the scholar-statesmanship. During 518 years of Korea’s last kingdom, Yi Dynasty, all the high-ranking officials were excellent scholars and poets. The high-level public servant examination required them to compose poems and answer questions on the Chinese classics such as the Analects of Confucius, the Works of Mencius, Doctrine of the Mean and so on. This long-held scholastic tradition of high bureaucracy in Korea is markedly different from Japan where Samurai, warriors rather than literati, assumed major roles in the government.

Promptly after my departure from domestic politics, I was invited by the Secretary-General of the United Nations to serve as one of his three Special Envoys on Climate Change. The others were Gro Harlem Brundtland, former Prime Minister of Norway and Ricardo Lagos, former President of Chile.

As the Special Envoy, I traveled widely to solicit the support of the world leaders. Through these trips, I found out that the world leaders were clear about the need for us to work together to adapt to the effects of climate change and to assist those who are least able to do so.

I heard many speak of their national actions and strategies, dispelling myths about inaction. At the same time, virtually everyone said or implied that the current level of effort globally was not commensurate with the challenges of stabilizing concentrations of greenhouse gases at a safe level. In sharing views about how to address the situation, I was impressed by the continuing support that leaders shared for the principles of the United Nations Framework Convention on Climate Change, which have proved robust and durable over the years. In particular, I noted the clear emphasis on the ‘principle of common but differentiated responsibilities,’ and the recognition of the special circumstances of developing countries.

Thus, at home and abroad, I witnessed a growing consensus to abandon the conventional economic approach of ‘Grow First, Clean Up Later.’ A new and fresh policy framework was needed in its place, one that would enable economic growth, prevent environmental degradation and enhance climatic sustainability. What was desperately required at this stage was clear and unrelenting leaderships to translate these desires into practical policy action that could bring about this change in reality.

While I was spending my happy and leisurely post-political life, thus concentrating on international public activities, the newly-elected President of Korea invited me to join his government as Prime Minister in January 2008. When that call came, I had some idea, with 20 years of experiences in domestic and international public service, of how to assist the President in changing Korea’s traditional development paradigm to move ahead in a rapidly changing world. Such a change was necessary if the new administration was to achieve the goal of transforming Korea into Global Korea, a truly responsible member of the international community that would contribute towards addressing global as well as domestic issues and challenges.

It was against this backdrop that President Lee Myung-bak, when he attended the G-8 Summit Outreach Meeting on Climate Change in Toyako, Japan in July 2008, made a public announcement that Korea, (a) will become an early mover in tackling the global issue of climate change, (b) would play a bridging role between developed and developing countries, (c) would do its best to refine the Kyoto Protocol’s market-based mechanism to encourage the non-Annex 1 countries of the Kyoto Protocol to join forces to reduce carbon emissions voluntarily and (d) would establish the East Asia Climate Partnership with an initial endowment of 200 million US dollars as a venue for more intensive deliberation for the major carbon emitters in the region: China, India, Japan, Korea, Indonesia and other ASEAN countries.

One month after the G-8 Outreach Summit, Korea proclaimed on the occasion of the 60th anniversary of the founding of the Republic of Korea on August 15th, 2008 that Low Carbon, Green Growth would be Korea’s new national vision. This vision aimed at shifting the current national development paradigm from the quantity-oriented and fossil fuel development to a quality-oriented, sustainable development model. Unlike in the traditional, quantity-oriented growth model where labor and capital are major factors of production, the most important factors under the new quality-oriented growth paradigm would be new ideas, transformational innovations and the state of art technology.

Through the new paradigm of low carbon, green growth, Korea aimed to kill three birds with one stone; (a) creating new engines of high growth, (b) ensuring climatic and environmental sustainability and (c) contributing more to the process of international negotiations to fight against global warming and climate change.

Unfortunately, as we were preparing to put this new national vision into policy action, the Lehman Brothers collapsed on September 15th 2008, producing devastating global financial repercussions. I had to grapple with the ripple effects of the so-called once in a century credit tsunami. Consumer confidence remained very low while anxiety levels continued to soar. The pervasiveness of exotic instruments and various toxic assets in our capital markets meant that any remedy was rendered deficient at best. At the time of the Lehman Brother’s downfall and global stagnation that followed immediately, the road ahead seemed to be long and arduous and the success was contingent on all the stake-holders doing their parts. By this time, it was an incontrovertible fact that the principle global challenges that Korea faced were twofold; the global financial crisis and climate change.

In order to put the new national vision of Low Carbon Green Growth into policy action and at the same time to address the devastating financial crisis, we began to work out various measures. On 6th January 2009, I, in my capacity as the Prime Minister, announced the Green New Deal Policy. Beyond creating the enabling conditions for green growth, it also sought, through a New Deal component, to stimulate jobs and restore growth. In economic-technical terms, the policy was an amalgam of a long-term policy of expanding growth potentiality through innovation and a short-term policy of creating jobs and revitalizing the national economy through fiscal stimulus.

The policy aimed at facilitating the transition towards a green economy while stimulating jobs. As a combination of neo-classical, supply-side economic policy with Keynesian, demand-oriented policy prescriptions, the New Deal portion of the policy was designed to phase out as the national economy recovered, leaving only green growth as the major economy goal to deal with.

Korea’s Green New Deal Policy received a very favorable comments and responses from the global environmental and financial community such as United Nations Environment Programme (UNEP) and HSBC. The HSBC analysed that over 80 percent of Korea’s policy package contained green growth component. As you may know, the large proportion of New Deal policy package has been traditionally spent on pure public works. Korea was the only OECD member country that registered a positive growth during the first quarter of 2009.

To further translate green growth paradigm into policy, we announced a blueprint mapping out 17 new engines of growth. These included six projects under the category of green technology industries such as renewable energy, low-carbon energies, LED applications, green transportation system, advanced water management and the state of art green cities, another six industries in the category of fusion technology including IT fusion with manufacturing technology such as robot applications, new materials and nano fusion, bio-medicine and value-added food industries. Finally, an additional five projects make up of the high value-added job creating industries such as green financing, contents and software development, MICE, and tourism.

Since the inauguration of the new Park Geun-hye government in February this year, Korea has been putting a great emphasis on the creative economy with social inclusiveness as the most important policy objectives. Whether she will succeed in once again elevating the global economic ranking and status of Korea will be contingent on all the Koreans working together to achieve the goals that she has set. However, there are a lot of newly emerging problems that Korea has to solve on the way.

First, Korea is rapidly becoming an aging society. The fertility rate has fallen rapidly, affecting the future labour force and adversely influencing on the size of domestic demand in due course.

Second, the savings rate has gone from one of the highest in the world at the time of rapid development to one of the lowest, about 3 percent in the case of household savings in 2012. This is one of the lowest in the world, affecting domestic investment adversely and making Korea to rely heavily on foreign financial resources.

Third, the discrepancy between the largest conglomerates and the small and medium companies has been growing over the years. The conglomerates have become more globalized and innovative while the small and medium companies are short of entrepreneurial capability and innovation, becoming a drag on the fast economic progress.

Fourth, the service sector is rather underdeveloped and needs revamping. The service sector needs the international competition and the opening of the service sector such as education and health has been met by the strong opposition of various domestic interest groups.

Fifth, the labor market needs drastic reform and the labor bureaucracy has to go through revamping. The hostile labor disputes and strikes sap much of Korea’s economic potentiality.

There are several other challenges that we have to address if Korea were to take off once again and to become truly one of the most advanced countries in the world.

I have put you through a crash course on the recent Korean economy. How could the Korean economy grow so fast during the last half century? What then are the lessons of Korea’s fast growth and transformation to other developing economies? I would like to pinpoint a few relevant factors that made Korea grow fast.

The first is the high-level leadership and vision. Just as the late Sultan was the great visionary for Brunei, one cannot deny that President Park Chung-hee offered a very effective leadership and a great vision for the development of Korea. It was due to him that Korea overcame insurmountable odds to galvanize the nation to aspire to a higher standard of modern living in record time. Korea is undoubtedly the most successful developing country to have graduated on to the big league of industrialized powers over the last 30 years. The lesson to take away from Korea’s transformative experiences is that leadership and vision matter. With committed strong and clean political leadership armed with an inspiring national vision, huge challenges could be met and daunting vulnerabilities could be mitigated.

The second is education and innovation in technologies. The United Nations Development Programme (UNDP) publishes the Human Development Report every year and this year’s report is entitled, “The 2013 Human Development Report – The Rise of the South: Human Progress in a Diverse World”. In the human development index of this report, Korea is ranked 12th among the 121 countries. Norway is the first, US the 3rd, Japan the 10th, Brunei the 36th and China is ranked 101st.

Education lies at the cornerstone of the remarkable transformation of Korea. Educational performance is vital to economic growth and human development. This is also evidenced in a 2009 OECD assessment which found that four of the five highest performing educational systems in the world are Korea, Shanghai, Hong Kong and Singapore.

Education was crucial in enabling Korea to close the technological gap early in its development path by developing local technical knowhow and expertise fostered. The Korea Institute of Science and Technology established in early 1960s was able to attract many foreign-educated scientists and engineers back to Korea to help Korea’s economic and technological progress. Korea may be one of the very few countries which registered a huge reverse brain drain.

Third, early global market access and enlargement also greatly contributed to economic and human progress in Korea. With the fundamentals of a successful market economy firmly established through the export-oriented industrialization strategy of the early 1960s to 1970s, Korea, in the mid-1980s, had already been transitioned into a market economy fully integrated into the global markets.

In the early 1990s, top-down reforms for rapid financial liberalization without adequate regulation and supervision of the financial system left Korea vulnerable to the external shocks of the Asian financial crisis of 1997-98. Despite this, far-reaching reforms since then in the banking and financial sectors, though not fully satisfactory, and the strengthening of the international framework and corporate governance have rendered the Korean economy more resilient, transparent and efficient. Proof of this was shown in the Korea’s rapid recovery from the initial shock of the global financial crisis of 2008 when Lehman Brothers suddenly collapsed.

Fourth, while the speed and breath of Korea’s economic transformation are often recognized, the success of Korea development model also lies in its concurrent focus on social inclusiveness. The point is that economic growth is the key to unlocking human potential and development; but it must be accompanied by serious measures to spread income and wealth. For example, the Saemaul Undong, or the New Community Movement launched in Korea in 1970 sought to rectify the growing difference in income and living standards between the rural areas and the industrializing urban cities.

As a result of such conscious efforts, Korea has been free of fundamental social exclusion resulting from large-scale poverty, entrenched income inequalities, unequal access to education or deep-seated gender discrimination. Korea was a model of fast growing development economy with the income inequality under tight control.

Fifth, good governance is the key to economic success. Clean government is another. The so-called Miracle on the Han River and Korea’s continued economic and social development would not have been possible without the implementation of a well-developed social infrastructure and the emergence of a professional and effective public administration. The ability to translate the high level vision into strategic planning across all levels of governance, and the ability to move from policy to action through government guidance and oversight were key elements of the early, government-led industrialization. While the first and second five year plans were being implemented in Korea, no government officials at all levels spared their energy and time, sacrificing even their personal and family lives to the economic prosperity of the nation and to benefit of the people.

Last but not least, the role of enterprising entrepreneurs has to be added as one of the factors of Korea’s economic success. Lee Byung-chul who founded the Samsung Corporation, the global leader in manufacturing DRAM memory chip, TV, smartphones, TV among others, Chung Ju-young who built up Hyundai Group of shipbuilding, automobile and construction, Park Tae-jun of Pohang Steel, the founders of LG, GS, SK among others are the entrepreneurs who contributed greatly to the Korea’s rapid economic development.

Visionary leadership, education and innovation, globalization, social inclusion, good governance, and effective public administration and entrepreneurship are some of the lessons that Korea can share with the aspiring developing and emerging economies.

I cannot complete my speech without reference to Brunei.

Already the people of Brunei are enjoying one of the highest standards of living in the world in general and in Asia in particular. Its per capita GNI topped US$45,690 in 2012 is only superseded by US$52,613 in Singapore.

The recent Human Development Report 2013 by the UNDP shows that Brunei belongs to the group of the very high human development. There are only 5 Asian countries that belong to this group of 47 countries.

This remarkable achievement was made possible through a series of remarkably visionary leadership in Brunei, the late Sultan Omar ‘Ali Saifuddien Sa’adul Khairi Waddien provided the strong leadership having helped Brunei and the people of Brunei enjoy the independence of the nation as well as the economic history. What the late Sultan has taught us is that it is the leader who makes all the difference.

Following the late Sultan’s royal leadership, His Majesty Sultan Haji Hassanal Bolkiah has been offering a very wise leadership not only to the people of Brunei but also to the people of the region. He is one of the most respected leaders in the region and I am confident that under his stewardship, Brunei will become richer and happier place to live in the coming years.

Brunei has launched Wawasan Brunei 2035, Brunei’s National Vision 2035, in 2008. Under the dynamic and experienced leadership of His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince, I am sure that Wawasan 2035 will reap the concrete results in acquiring the highly skilled group of educated people in Brunei, in offering a good quality of life for all in Brunei and advancing dynamic and sustainable Brunei economy in the future.

I wish you all good health, success and happiness.

SOAS Memorial Lecture 2010 – Bingkisan Mutiara dari Zaman Pemerintahan Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien oleh Pg Setia Negara Pg (Dr) Hj Mohd Yusof Pg Hj Abdul Rahim

Syarahan oleh:

Pg Setia Negara Pg (Dr) Hj Mohd Yusof Pg Hj Abdul Rahim

SOAS Memorial Lecture 2010
Chancellor Hall, University Brunei Darussalam
Brunei
7hb Oktober 2010

Al-Marhum Duli Yang Teramat Mulia Mulia Paduka Seri Begawan Sultan Haji Omar ‘Ali Saifuddien yang juga dikenali sebagai Pengiran Muda Tengah pada zaman remajanya telah diputerakan pada 23 September 1914. Setelah baginda menaiki tahta pada tahun 1950, Baginda dikenali sebagai Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien. Baginda sejak kecil lagi telah dididik dan diasuh dengan pendidikan agama Islam. Baginda adalah seorang pelajar yang rajin dan tekun terutama dalam mempelajari bacaan Al-Quran. Atas nasihat Pengarah Pelajaran Negeri pada ketika itu, maka pada tahun 1932, Baginda telah berangkat ke luar negeri untuk melanjutkan pelajaran di Maktab Melayu Kuala Kangsar Perak (Malay College Kuala Kangsar). Kebawah Duli Yang Maha Mulia boleh dikatakan beruntung kerana telah diterima untuk belajar ke maktab ini. Baginda telah menuntut sehingga tahun 1936. Maktab Melayu Kuala Kangsar Perak sebenarnya bukanlah maktab biasa tetapi sebuah maktab yang ditubuhkan khusus bagi anak-anak kerabat diraja, pembesar-pembesar dan orang-orang kenamaan negeri-negeri di Semenjung Tanah Melayu atau Malaya belajar dan meninggikan ilmu pengetahuan mereka.

Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien adalah anak kesayangan bonda Baginda. Oleh itulah ketika menuntut Maktab Melayu Kuala Kangsar Baginda ditemani oleh dua orang anak Kerabat Diraja iaitu Yang Teramat Mulia Pengiran Pemanca Pengiran Mohammad Alam ibni Pengiran Bendahara Pengiran Abdul Rahman dan Yang Amat Mulia Pengiran Maharaja Lela Pengiran Muda Abdul Kahar ibni Pengiran Pemancha Pengiran Anak Mohd Yassin.

Setelah berjaya menamatkan pengajian di Maktab Melayu Kuala Kangsar, Kebawah Duli Yang Maha Mulia berangkat balik ke Brunei dan ditugaskan untuk memegang jawatan dalam sektor kerajaan. Baginda pada mulanya telah diaturkan berkhidmat sebagai Pegawai Kadet di Jabatan Hutan Kuala Belait. Dengan jawatan ini Kebawah Duli Yang Maha Mulia memperolehi banyak pengalaman yang berharga terutama sekali dapat bergaul dengan ramai pegawai-pegawai Jabatan Hutan atau ‘forest’. Baginda juga banyak bergaul dengan rakyat biasa. Ini membolehkan baginda untuk mengalami, merasai dan melihat sendiri bagaimana keadaan kehidupan rakyat pada masa itu. Ketika bertugas di Kuala Belait, Kebawah Duli Yang Maha Mulia pernah dijunjung menghadiri majlis “bersimbah” – bersilam dengan air. Ia adalah satu adat yang terdapat dalam masyarakat Belait. Baharu sahaja sampai ke tempat majlis, sedang Baginda melangkah dari lanting untuk naik ke tangga, baginda telah disimbah dengan air. Tetapi dengan tersenyum Baginda menceduk dari lanting air ini lantas membalas siraman tersebut. Ini membayangkan bagaimana mesranya baginda dengan rakyat baginda itu. Selepas bekerja di Kuala Belait barulah baginda dipindahkan untuk bekhidmat Jabatan Daerah Brunei dan Muara. Baginda kemudiannya melangsungkan perkahwinan dengan Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Raja Isteri Pengiran Anak Damit ibni Pengiran Bendahara Pengiran Abdul Rahman. Ketika itu terdapat dua wazir sahaja di Brunei iaitu Duli Pengiran Bendahara dan Duli Pengiran Pemanca.

Pada tahun 1941 Brunei jatuh di bawah pemerintahan tentera Jepun. Bagaimanpun penceramah , Yang Amat Mulia Pengiran Setia Negara Pengiran Dr. Haji Mohd Yusof tidak dapat menceritakan pengalaman yang telah dialami oleh Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien ketika itu kerana Yang Amat Mulia melanjutkan pelajar di Hiroshima Jepun. Yang Amat Mulia kembali ke Brunei pada tahun 1945 setelah Jepun menyerah kalah kepada tentera Bersekutu. Pada masa itu Brunei pemerintahan tentera British atau British Military Administration (BMA). Brunei hanya dikembalikan kepada sistem pemerintahan awam di bawah pentadbiran seorang Governor General pada tahun 1947. Pada tahun tersebut juga ayahanda mertua kepada Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien yang menyandang jawatan Pengiran Bendahara telah mangkat. Dengan itu Baginda telah dilantik menggantikan jawatan tersebut. Dengan lantikan ini dengan sendirinya memberikan peluang kepada Baginda untuk menimba pengalaman lebih luas sebagai pembesar dan pentadbir negara sebelum menjadi Sultan.

Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien telah ditabalkan menjadi Sultan Brunei Ke-28 apabila Seri Paduka Kekanda Baginda Sultan Ahmad Tajuddin lindung dalam perjalanan ke Singapura pada 4 Oktober 1950. Jenazah Baginda telah dipelihara oleh Sultan Johor dan kemudiannya diterbangkan ke Brunei. Sebelum dimakamkan, pengganti Baginda telah diputuskan dengan Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Omar ‘Ali Saifuddien telah diangkat menjadi Sultan Brunei yang baru pada 6 Jun 1950, ketika usia Baginda 36 tahun.

Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Haji Sultan Omar ‘Ali Saifuddien menaiki tahta dengan berbekalkan pengalaman yang luas dari pergaulan Baginda dengan putera-putera raja dan anak datuk-datuk Malaya. Setelah tiga tahun di atas takhta, Baginda bercita-cita untuk mengadakan perlembagaan baru bagi Negara Brunei Darussalam. Baginda menyedari Brunei pada masa itu tidak mempunyai perlembagaan bertulis dan segala kuasa pemerintahan telah dijalankan Residen British. Brunei ketika itu hanya menerima segala nasihat Residen British. Untuk merealisasikan cita-cita Baginda bagi mewujudkan perlembagaan sendiri Brunei, Dengan yang demikian Baginda telah menitahkan supaya dilantik satu Jawatankuasa Penasihat Perlembagaan Brunei. Tujuh orang telah dipilih dan dilantik oleh Residen British pada 15 Mei 1953. Mereka ini juga dikenali sebagai “Tujuh Serangkai” yang terdiri dari :

• Yang Amat Mulia Pengiran Maharaja Lela Pengiran Muda Abdul Kahar bin Pengiran Pemancha Pengiran Anak Mohd Yasin(Pengerusi);
• Yang Amat Mulia Pengiran Shahbandar Sahibul Bandar Pengiran Haji Mohd Salleh bin Pengiran Anak Haji Muhammad;
• Yang Berhormat Pehin Orang Kaya Di-Gadong Seri Lela Haji Awang Mohd Yusof bin Pehin Jawatan Dalam Haji Awang Mohd Husain;
• Yang Berhormat Pehin Orang Kaya Shahbandar Haji Awang Ahmad bin Haji Awang Daud;
• Yang Mulia Dato Panglima Awang Abu Bakar bin Awang Jambol;
• Yang Berhormat Pengiran Mohd Ali bin Pengiran Mohd Daud;
• Yang Berhormat Pengiran Mohd Yusof bin Pengiran Haji Abdul Rahim.

Tujuh Serangkai inilah memainkan peranan sebagai penasihat dalam proses mengwujudkan Perlembagaan Negeri Brunei. Selain jawatan kuasa ini ada lagi satu badan yang dilantik mengandungi enam orang ahli.

Tujuh Serangkai telah dititahkan untuk melawat seluruh pelusuk Negeri Brunei dengan tujuan mendapatkan pandangan rakyat jelata di samping menerangkan hasrat Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien untuk membentuk perlembagaan baru Negeri Brunei. Hasil daripada lawatan ini didapati semua orang menyokong sepenuhnya hasrat tersebut. Tua muda bersetuju dan mereka berpendapat Brunei sudah sepatutnya mempunyai perlembagaan sendiri. Mereka juga mengetahui bahawa pilihan raya untuk memilih pemimpin sudah pun dilakukan di luar negeri. Orang-orang Brunei masa itu telah mempunyai semangat kebangsaan, perasaan kasih dan cintakan negara, terutama sekali di kalangan guru-guru lulusan Maktab Perguruan Sultan Idris Tanjung Malim atau Sultan Idris Training College (SITC).

Kemudian Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien telah menitahkan Tujuh Serangkai untuk berangkat melawat Malaya untuk mendengar pandangan penduduk di sana tentang hasrat Brunei untuk mengadakan perlembagaan. Pada ketika itu Malaya dalam perintah darurat kerana ancaman Kominis. Yang Amat Mulia Pengiran Setia Negara adalah yang paling muda dalam rombongan tersebut. Rombongan telah sempat berjumpa dan berbincang dengan beberapa orang pembesar dan orang kenamaan Malaya mengenai perlembagaan Brunei yang sedang dirancang ini. Apabila rombongan tiba di Malaya salah satu negeri yang dikunjungi ialah Negeri Sembilan. Penasihat British selaku pentadbir negeri ini telah mengaturkan lawatan ke Sungai Buluh yang merupakan salah sebuah kubu kuat Parti Kominis Malaya. Kunjungan yang dibuat berjalan lancar tanpa menghadapi sebarang masalah. Namun seminggu selepas itu rombongan mendengar khabar bahawa tujuh orang polis yang melalui jalan yang pernah dilalui oleh rombongan Tujuh Serangkai telah terkorban diserang oleh gerila Kominis.

Sekembali ke Brunei segala pengalaman dan lawatan di Malaya telah disembahkan Ke hadapan Majlis Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Haji Sultan Omar ‘Ali Saifuddien. Setelah itu Tujuh Serangkai telah dititahkan untuk membuat laporan dan sokongan bertulis kepada baginda. Tujuh Serangkai sepakat untuk menyembahkan laporan yang mengandungi bukan sahaja sokongan tetapi juga mencadangkan perkara-perkara yang boleh dilakukan dan yang tidak boleh dilakukan oleh pemerintah. Yang Amat Mulia Pengiran Setia Negara telah dipilih untuk merangka dan menulis laporan dan sokongan yang akan disembahkan ini. Yang Amat Mulia mengambil masa sebulan lebih untuk menyiapkannya. Setelah siap laporan dan sokongan ini mengandungi 50 muka surat dan telah ditandatangani oleh ahli-ahli Tujuh Serangkai. Ia telah disembahkan ke hadapan Majlis Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Haji Sultan Omar ‘Ali Saifuddien. Semasa disembahkan Baginda telah mengemukakan soalan satu persatu secara tuntas mengenai perkara-perkara yang terkandung dalam laporan dan sokongan tersebut. Namun laporan dan sokongan ini tidak boleh digunakan sebagai perlembagaan yang sebenar kerana ianya ditulis dalam bentuk yang biasa sahaja. Oleh itu Baginda telah melantik seorang peguam dari Malaya iaitu Dato Panglima Bukit Gantang Abdul Wahab untuk mengubal Perlembagaan Negeri Brunei yang baru dengan dibantu oleh Dato Neil Lawson (lawyer).

Setelah Perlembagaan tersebut selesai digubal oleh Dato Panglima Bukit Gantang, ianya dibawa untuk dirundingkan dengan Kerajaan British. Yang Mulia Dato Perdana Menteri Awang Ibrahim bin Jaafar, Yang Teramat Mulia Pengiran Pemancha Mohammad Alam ibni Pengiran Bendahara Pengiran Abdul Rahman, Yang Mulia Dato Marsal bin Maun (Menteri Besar), Yang Dimuliakan Pehin Jawatan Dalam Haji Mohd Noh, Yang Amat Mulia Pengiran Paduka Tuan Pengiran Abu Bakar dan Yang Dimuliakan Pehin Orang Kaya Laksamana Haji Taha adalah antara ahli rombongan yang menyertai untuk merunding Perlembagaan Negeri Brunei di London. Hal yang paling sulit sekali dalam rundingan ini ialah untuk membatalkan jawatan Residen British di Brunei, tetapi Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Sultan Haji Omar ‘Ali Saifuddien memang berazam dan bertekad untuk mewujudkan jawatan Menteri Besar bagi menggantikan jawatan Residen British. Setelah beberapa kali berulang-alik ke London barulah selesai dan jawatan Menteri Besar dipersetujui untuk dibentuk dan jawatan Residen British digantikan dengan jawatan Pesuruhjaya Tinggi British yang hanya menguasai hal-ehwal luar Brunei sahaja. Colonial Secretary atau Setiausaha Tanah Jajahan di London, melalui Mr Anthony Abel dan Mr Gilbert, telah mengesahkan bahawa Kerajaan British telah bersetuju supaya seorang Menteri Besar dilantik untuk melaksanakan mentadbir Kerajaan Brunei. Dalam proses penggubalan Perlembagaan Negeri Brunei 1959, tidak ada orang lain yang menyembahkan menasihat kepada Kebawah Duli Yang Maha Mulia Paduka Seri Baginda Haji Sultan Omar ‘Ali Saifuddien selain daripada Tujuh Serangkai dan enam orang ahli jawatankuasa tadi.

SOAS Memorial Lecture 2009 – The Legacy Of Sultan Haji Omar ‘Ali Saifuddien by His Excellency Dato Laila Utama Lee Kuan Yew

Speech by:

His Excellency Dato Laila Utama Lee Kuan Yew
Minister Mentor Of The Republic Of Singapore

SOAS Memorial Lecture 2009
International Convention Centre, Berakas Brunei
25th February 2009

I am honoured that, with the consent of His Majesty Sultan Haji Hasasnal Bolkiah of Brunei Darussalam, the Sultan Haji Hasssanal Bolkiah Foundation has invited me to deliver the first of the Sultan Haji Omar ali Saifuddien Memorial Lectures. It is fitting and proper that the Seri Begawan Should be commemorated. At a turning point in its history, the Brunei Sultanate would have ceased to exist as an independent state without him. In august 1963, Indonesia was opposing the proposed Federation of Malaysia and confronting Malaya and Singapore. Only eight months earlier, on 8 December 1962, Brunei had faced a revolt by Sheikh Azahari of the Partai Rakyat Brunei (PRB) and British forces from Singapore put down the rebellion. It was a time of great peril when the Sultan decided not to join the proposed Federation. Singapore went ahead and join the Federation. Sultan Omar Ali was under great pressure from the British who had hinted that they would be leaving the region soon. But he stood firm. He put his position as Sultan and the fate of his people on the line. His judgment was that the British would be responsible enough to give him some time to get his country in better shape before British forces left.

Let me briefly recount his personal history. Sultan Haji Omar Ali Saifuddien Sa’adul Khairi Waddien the Third was born on 23 September 1914 in Kampong Sultan Lama, a ward in Kampong Ayer. He was the second surviving son of Sultan Muhammad Jamalul Alam the Second, the 26th Sultan of Brunei and the Raja Isteri Fatimah, the seventh in a family of ten. He received an informal traditional Islamic education based on the study of the Quran. He was taught good manners, respect for elders and Islamic prayers. He was interest in traditional Malay literature and was familiar with the text of the Hikayat and Syair. He had a bent for Malay poetry and wrote four works of poetry. That earned him the accolade ” Penyair Diraja” or “Royal Poet”.

In 1932, at the age of 18, he left with two of his cousins to enroll at the Malay College in Kuala Kangsar, Malaya. He studied there for four years and returned with a Standard 4 examination certificate. He then entered the State Administrative Services with the encouragement of the British Resident, later Governor of North Borneo, R E Turnbull. He was stationed in Kuala Belait for a year, lived and worked in the jungle in Ulu Belait. After a year, he joined the Legal Department as a cadet officer, and learned aspects of civil and criminal law, understudying H Hughes-Hallet, the Assistant British Resident.

In 1938, he left the legal department and devoted his time to study region under well-know religious teachers. In 1941, he joined the Resident’s Office. On 6 September 1941, he married Pengiran Anak Damit, the daughter of the Pengiran Bendahara. Brunei was occupied by the Japanese military in early 1942. He was nominated to the State Council from 29 June 1942 and worked at the Governor’s office at the request of the Japanese military administration.

His brother, the Sultan Ahmad Tajuddin, died on 4 June 1950, and Omar Ali was proclaimed Sultan on 6 June 1950. He was crowned on 31 May 1951 as Brunei’s 28th Sultan at the age of 35. He was made a Knight by the British monarch.

I first met him in September 1960 when he had invited the Yang Di-Pertuan Negara of Singapore, Yusof bin Ishak, me as the new Prime Minister and our wives to Bandar Brunei for his 46th birthday celebrations. He had gathered some Malay literary figures from the Dewan Bahasa Dan Pustaka in Kuala Lumpur, including Syed Nazir, the then-President of the Dewan. He spent time the next few days discussing Malay literary works.

The late Sultan was a modest man. He was soft-spoken, with a frequent smile when speaking to his friends. He lived a simple and frugal life. For his birthday, he had build an annexe to the old Istana. It was not air-conditioned. He did not like air-conditioning. The room that my wife and I stayed in within this newly-built annexe was very hot, like an oven even at night. The sun would shine on the building in the afternoon and there was not enough ventilation. So I quietly moved out to stay at the rest-house in a room with a window-model air-conditioner. It was during this visit to Brunei that we struck up a friendship that was to grow and endure the rest of his life.

On 27 may 1961, Tunku Abdul Rahman, the Malayan Prime Minister, at an address to the Foreign Correspondents Association in Singapore, mooted the formation of Malaysia, to include Brunei, Sarawak, North Borneo (subsequently to be named Sabah), Singapore and Malaya. On 5 December 1961, Sultan Sir Omar Ali described the Malaysia proposal as very attractive. In January 1962, he appointed a Brunei-Malaysia Commission to report on the opinion of the people. On 18 July 1962, the Sultan stated that he accepted the Malaysia proposal in principle, but that it did not necessarily mean it was final. If agreement could not be reached on important conditions affecting benefits to the people and the state, Brunei would not participate in the Malaysia plan.

In August 1962, the Partai Rakyat Brunei (PRB) won a landslide victory in four District Council (LegCo). The PRB won 54 seats and had all the 16 members required for the LegCo. But they could not form the government. The 17 government nominees outnumbered the PRB in the 33-member Council. Sheikh Azahari, Leader of the PRB rejected the proposal that Brunei join the proposed Malaysian Federation. Azahari put forward three motions at the LegCo meeting, for 5 December 1962; first to reject the proposal of a Malaysian Federation; second, to request the restoration of Brunei’s sovereignty over Sarawak and North Borneo and the installation of the Sultan as constitutional monarch of the North Borneo Federation; and, third, a request to the British to grant independence to Brunei not later than 1963.

The Speaker of the LegCo disallowed the motions because the issues fell within the purview of the British government under the 1959 British-Brunei Agreement. Sheikh Azahari, the PRB leader, decided to resort to a military wing, Tentera National Kalimantan Utara (TNKU). The revolt began on 8 December. It was put down in short order by British forces flown in from Singapore. On 20 December, Sultan Omar Ali declared a State of Emergency, suspended the Constitution, dissolved the LegCo, and appointed a 14-member Emergency Council comprising four ex-officio members, including the British High Commissioner, Sir Denis White, and 10 members nominated by the Sultan.

Negotiations on Malaysia were resumed in earnest following the end of the rebellion. The Sultan did not accept the terms that Malaya offered him. When the Malaysia Agreement was signed on 9 July 1963 in London, Singapore, North Borneo and Sarawak signed on. Brunei did not. I had been in frequent touch with the Sultan in London, then staying at Grosvenor House. He was very firm in his decision not to join. As a result, after Malaysia was formed on 16 September 1963, Tunku Abdul Rahman, The Prime Minister of Malaysia, recalled hundreds of Malaysian teachers and government officers seconded to serve the Brunei administration. This departure caused a temporary dislocation in Brunei.

Several accounts were given to explain the reasons for Brunei’s decision not to join Malaysian Federation. One account cited disagreement over oil revenues as the primary cause. Kuala Lumpur wanted Brunei to hand over control of its oil to the Federal government after 10 years. Kuala Lumpur also wanted to immediately tax any new oil and mineral finds discovered after Brunei joined Malaysia and to make the Sultan’s contribution of $40 million to federal revenues compulsory rather than voluntary. The sultan was said to have found these terms unacceptable.

Another account from Kuala Lumpur alluded to the Sultan’s unhappiness over the issue of royal precedence. However, I believe Sir Omar was neither willing to compromise Brunei’s control over its oil revenues nor ready to have his privileges as the Ruler of Brunei curtailed. More to the point, the vibes that Sultan Omar Ali felt during the negotiations were that he would become subordinate to Kuala Lumpur’s leaders and he would rank behind Malaysia’s nine Sultans in seniority, besides giving up a chunk of this oil wealth to KL. When we met soon after Singapore was asked to leave Malaysia in august 1965, he nodded with satisfaction that his decision not to join was wiser than Singapore’s acceptance of Malaysia.

Just over two months after Malaysia was formed, on 1 December 1963, the British Colonial Office cut its long-term connection with Brunei. The British High Commissioner in Brunei, no longer called the British Resident, henceforth would deal with Secretary of State for Commonwealth.

When the Labour Government took office in October 1964, it became clear that sooner or later they would withdraw their forces from east of Suez. This would jeopardise Brunei’s secure position as a protectorate. British advisers pressed the Sultan to hasten the implementation of constitutional reforms so that there could be a democratic government in place. In March 1965, a second general election was held for District and Legislative Councillors. 36 candidates contested for 10 LegCo seats in 21-member LegCo that would comprise six ex-officio members and five members nominated by the Sultan. 88 candidates fought for seats in four District Councils. A large number of candidates contesting under political parties were defeated by independents because the political parties were weak.

On 4 October 1967, Sultan Omar Ali, then aged only 53, abdicated in favour of his 21-year-old eldest son, Hassanal Bolkiah, born on 15 July 1946. It was a strategic move he made to buy time before a British withdrawal. I was invited to the coronation of his son in 1968. Protracted negotiations with the British on Brunei’s future continued following the abdication. The Sultan, now the Seri Begawan, dragged out the discussions. He wanted his soon to get familiar with the administration. Moreover, his son was only 21 years old. He deflected pressure to adopt the British adversarial Parliamentary systems.

He argued with the British that he needed a few years for the young Sultan to learn the ropes and strengthen the domestic situation ahead of any constitutional changes. He bought time from 1963 to 1983, over 20 years when the British finally withdrew, and Brunei became an independent state. Without the skilful and determined stand taken by Sultan Omar Ali in the full knowledge that he was risking the future of his Sultanate if the British were to leave precipitately, he saved his dynasty, delayed majority rule before Brunei was ready, and he secured Brunei’s continued defence by an agreement to pay for one British Gurkha battalion that would stay in Brunei under British control. A discreet British presence remained.

The Seri Begawan has preserved Brunei’s oil wealth. He left the bulk of his country’s reserved with the Crown Agents to manage. He was fortunate that Britain acted with responsibility. Most of all, the Seri Begawan played his hand with considerable skill. He pleaded for time to educate enough local Bruneians who could manage the administrations of the country.

Way back in the 1960s, he and I had become close friends. He trusted me because I never took advantage of his friendship to ask for favours. On one occasion, he asked his sons to sit win when I met him and he told them that I was a friend who could be relied upon. He wanted the friendship between us to continue with his sons. It has. The close ties continue between the Sultan and his brothers with the present PM and other leaders of Singapore. Less than three years after independence, on 7 September 1986, he passed away. He was deeply mourned by the people of Brunei. They knew that he had saved their independence and are able to live as they wish, keeping their oil wealth. It was Sir Omar’s statecraft. He built the infrastructure of state. By the 1980s, he had given the sultanate’s 200,000 people a high per capita income of US$20,000, among the world’s most privileged. He strengthened Brunei’s Islamic institutions.

Sultan Omar Ali took calculated risks with courage. He had a keen sense of what was politically possible. During 17 years from 1950 to 1967, he brought economic, social and political developments to Brunei. With two Five-Year Development Plans, he provided for an education systems throughout the state. He built schools to teach English, gave scholarships to promising young students to study in overseas institutions. He provided school children with at least one free meal a day. Religious schools were given high priority. Hospitals, clinics were set up and dental services to school were provided. He eradicated dysentery and malaria. He provided electricity for the whole state. He developed the roads and telecommunication systems. He reclaimed swamp lands and resettled people.

He set up the Royal Malay Regiment in 1961, which evolved into the Royal Brunei Armed Forces. The Currency Board was established in 1967. Sultan Omar Ali had ensured the survival of an independent Malay Muslim monarchy at the end of the 20th century. He had built a strong foundation before passing the mantle to his eldest son, His Majesty Sultan Hassanal Bolkiah has guided Brunei since independence in 1984, a 25-year period, during which Brunei has Progressed in material and social terms. The Old Sultan would have been happy to know that an independent Sultanate in Brunei has progressed in the quarter century after independence. His son, Sultan Hassanal Bolkiah, has preserved his heritage. Sultan Haji Hassanal Bolkiah has continued to expand the number of abler Bruneians who are educated aboard, and created a thicker layer of the higher educated and well-informed elite.

It was good for Brunei that at the time it became independent, the leader of ASEAN was President Soeharto of Indonesia. He knew that I was good friend of the Seri Begawan. So he asked me to invited Brunei to join ASEAN. Brunei did join and became a member of the family of ASEAN states. This consolidated Brunei’s sovereign status, especially when it was recognized by its neighbours. Joining ASEAN also reduced the danger of conflict between Brunei and its neighbours.

The close friendship and mutual that the father established with me have continued in the leaders of the next generation. This is a special relationship. We are the two smallest countries in ASEAN. On natural area of cooperation is defence, where our two countries have a longstanding, deep and extensive relationship that goes back to 1976. There are extensive interactions between the two Defence Ministries and the Armed Forces at all levels, from the Ministers to the younger officers.

All Singapore Prime Ministers and Ministers have scrupulously followed my policy of never taking advantage of our close friendships with the Brunei Royal Family, their Ministers and officials.

The two Armed Forced train together in Singapore and Brunei on a regular basis. They conduct seven joint exercise annually. The Singapore Armed Forces is particularly grateful for the opportunity to conduct some of its training in Brunei, given Singapore’s land constraints.

RBAF officers and soldiers attend a wide range of military courses in Singapore, together with their Singaporean counterparts. These range from technical courses to Officer Cadet School and the Command and Staff Course. Likewise, SAF officers attend courses in Brunei, such as the Executive Development Programme and the RBAF Junior Staff Course. A recent addition is the Scholars Exchange Programme for scholars from the defence establishment of both countries before they depart for their studies. These exchanges have enabled the officers to enhance their military knowledge. More importantly, they get to know one another at a personal level. Such interactions provide the foundation for ensuring that relationship between our two armed forces remains strong in the coming years.

Another important area of collaboration is the Currency Interchangeability Agreement. In December 1964, a year after Malaysia was formed, the Malaysian government decided to terminate the Board of Commissioners of Currency and to issue a new currency for Malaya, Singapore and the Borneo territories, including Brunei. The Malaya-British Borneo Currency Agreement was terminated two years later. The Malaysian government in Kuala Lumpur declined Brunei’s request that it be given a seat on the policy-making body. Also, Malaysia opposed Brunei’s request that the portrait of the Yang Di-Pertuan Agong of Malaysia should not appear on the new notes. Hence, Brunei enacted legislation in January 1967 to form its own Currency Board. Brunei, Malaysia and Singapore adopted a Currency Interchangeability Agreement, which allowed our currencies to be accepted interchangeably in the three countries. Although Malaysia withdrew from the Agreement in may 1973, Brunei and Singapore have maintained the arrangement till today. In June 2007, His Majesty Sultan Hassanal Bolkiah and Prime Minister Lee Hsien Loong celebrated the 40th anniversary of this Agreement and jointly launched two $20 polymer commemorative notes in Bandar Seri Begawan to commemorate the event. This Agreement reflects our long-standing friendship and mutual trust, and has deepened economic ties between Brunei and Singapore.

Singapore’s leaders have continued the close ties with Brunei after my long association with the Seri Begawan and his sons. This association has endured an flourished because it is based on mutual respect and trust, and utmost good faith. Future generations of leaders and officials should build upon and enrich this special relationship.

The history of Brunei has been a most unlikely story of a Sultanate that has survived into the 21st century as an independent oil-rich state in a turbulent part of the world. Singapore and Brunei share fundamental similarities. I remember during one of the Seri Begawan’s visits to Singapore after our independence, he had smiled broadly and, with his eyes twinkling and his moustache twitching, said “You are now like Brunei. It is better for you”. As small states surrounded by bigger neighbours in an increasingly uncertain and complex world, we share similar aspirations and concerns. We can complement on our respective strengths to enhance our development and growth. Both bilaterally and multilaterally with our other partners in ASEAN, we can help ASEAN become an integrated, stable and thriving regional association at peace with one another and with our larger neighbours, including China and India.