bahrain

Middle East Trade Portal

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Bahrain

BAHRAIN

Bahrain's reputation as a relatively liberal and modern Gulf state has made it a favourite with travellers in the region and an excellent introduction to the Middle East. It was once the seat of one of the great trading empires of the ancient world, and is evocative of the past.

Bahrain has been inhabited since ancient times and has even been proposed as the site of the Biblical Garden of Eden. Its strategic location in the Persian Gulf has brought rule and influence from the Assyrians, Babylonians, Greeks, Persians, and finally the Arabs, under whom the island became Muslim. Bahrain was in the ancient times known as Dilmun, later under its Greek name Tylos (see Dilmun for more information), as Awal

Oil was discovered in 1932 and brought rapid modernization to Bahrain. Bahrain was the first place to find oil in the whole region. It also made relations with the United Kingdom closer, evidenced by the British moving more bases there. British influence would continue to grow as the country developed, culminating with the appointment of Charles Belgrave as an advisor; Belgrave established modern education systems in Bahrain.

Economy

In a region experiencing an oil boom, Bahrain has the fastest growing economy in the Arab world, the United Nations Economic and Social Commission for Western Asia found in January 2006. Bahrain also has the freest economy in the Middle East according to the 2006 Index of Economic Freedom published by the Heritage Foundation / Wall Street Journal, and is twenty-fifth freest overall in the world.

In Bahrain, petroleum production and processing account for about 60% of export receipts, 60% of government revenues, and 30% of GDP. Economic conditions have fluctuated with the changing fortunes of oil since 1985, for example, during and following the Persian Gulf crisis of 1990-91. With its highly developed communication and transport facilities, Bahrain is home to multinational firms. A large share of exports consists of petroleum products made from imported crude oil. Construction proceeds on several major industrial projects.

Unemployment, especially among the young, and the depletion of both oil and underground water resources are major long-term economic problems.

In 2004, Bahrain signed the US-Bahrain Free Trade Agreement, which will reduce certain barriers to trade between the two nations.

Bahrain recently became the first Arab country to institute unemployment insurance