Bahrain

Region: Asia
Capital: Manama
Population: 698,585 (July 2006 est.)
Surface area: 665 sq km
Currency: Bahraini dinar (BHD)
GDP per capita: Purchasing power parity $25,300 (2006 est.)
Background:
In 1782, the Al Khalifa family captured Bahrain from the Persians. In order to secure these holdings, it entered into a series of treaties with the UK during the 19th century that made Bahrain a British protectorate. The archipelago attained its independence in 1971. Bahrain's small size and central location among Persian Gulf countries require it to play a delicate balancing act in foreign affairs among its larger neighbors. Facing declining oil reserves, Bahrain has turned to petroleum processing and refining and has transformed itself into an international banking center. King HAMAD bin Isa Al Khalifa, after coming to power in 1999, pushed economic and political reforms to improve relations with the Shi'a community and Shi'a political societies participated in 2006 parliamentary and municipal elections. Al Wifaq, the largest Shi'a political society, won the largest number of seats in the elected chamber of the legislature. However, Shi'a discontent has resurfaced in recent years with street demonstrations and occasional low-level violence.
Economy – Overview:
With its highly developed communication and transport facilities, Bahrain is home to numerous multinational firms with business in the Gulf. Petroleum production and refining account for over 60% of Bahrain's export receipts, over 70% of government revenues, and 11% of GDP (exclusive of allied industries), underpinning Bahrain's strong economic growth in recent years. Other major segments of Bahrain's economy are the financial and construction sectors. Bahrain is actively pursuing the diversification and privatization of its economy to reduce the country's dependence on oil. As part of this effort, Bahrain and the US in August 2006 implemented a Free Trade Agreement (FTA), the first FTA between the US and a Gulf state. Unemployment, especially among the young, and the depletion of oil and underground water resources are major long-term economic problems.
Major Export Commodities: petroleum and petroleum products, aluminum, textiles
Remittances: Not available
Human Development Index 2005 ranking: 39
Official Development Assistance and Major Development Partners: $150 million; note - $50 million annually since 1992 from the UAE and Kuwait (2002)
Total External Debt: $7.267 billion/ 34.2% of GDP (2006 est.)
Sources:
CIA World Factbook. Central Intelligence Agency. www.cia.gov
World Development Indicators. World Bank www.worldbank.org
Development, Recipient Aid Charts. Organization for Economic Co-operation and Development. www.oecd.org
Human Development Report 2005.United Nations Development Programme. www.undp.org

Updated October 2005