LYCOS RETRIEVER 
Bahrain: Persian Gulf
built 630 days ago
In Bahrain, petroleum (oil product) producing and processing is about 60% of the money from export, 60% of government money, and 30% of Gross Domestic Product. The economy has changed as the sales of oil have changed since 1985, for example, during and after the Persian Gulf War of 1990 - 1991. Bahrain has high quality communications and transport, and so the country is home to many international companies with business in the Persian Gulf. A large part of the country's income comes from petroleum products made from imported crude oil. There are several major industrial projects being built. Unemployment, especially among young people, and the decrease of both oil and water resources are major economic problems.
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In spite of its improved ties with Iran at the beginning of the decade, Bahrain's moves appear to be a message for the Persian state. Iran is a revisionist challenger that is unsatisfied with the present balance of power in the Gulf region. Iran's strategy in this respect is perceived negatively by Bahrain since the island country has a 70 percent Shi'a population that is ruled by the Sunni al-Khalifa dynasty.
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![[Country Map]](http://retrieverimages.lycos.com/images/b/a/h/bahrain/i/018.jpg)
The site of the ancient Bronze Age civilization of Dilmun, Bahrain was an important center linking trade routes between Mesopotamia and the Indus Valley as early as 5,000 years ago. The Dilmun civilization began to decline about 2,000 B.C. as trade from India was cut off. From 750 B.C. on, Assyrian kings repeatedly claimed sovereignty over the islands. Shortly after 600 B.C., Dilmun was formally incorporated into the new Babylonian empire. There are no historical references to Bahrain until Alexander the Great's arrival in the Gulf in the 4th century B.C. Although Bahrain was ruled variously by the Arab tribes of Bani Wa'el and Persian governors, Bahrain continued to be known by its Greek name Tylos until the 7th century, when many of its inhabitants converted to Islam. A regional pearling and trade center, Bahrain came under the control of the Ummayad Caliphs of Syria, the Abbasid Caliphs of Baghdad, Persian, Omani and Portuguese forces at various times from the 7th century until the Al Khalifa family, a branch of the Bani Utbah tribe that have ruled Bahrain since the 18th century, succeeded in capturing Bahrain from a Persian garrison controlling the islands in 1783.
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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, in August 2006 Bahrain and the US 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.
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Bahrain was proclaimed a kingdom in 2002, and the Shura was dissolved prior to the assembly elections. Because King Hamad had established an appointed upper house in the national parliament, which had not been part of the charter approved in 2001, a number of groups (including the largest Shiite association) called for an electoral boycott; turnout in the October elections was 53%. The elected deputies were largely moderate Sunnites and independents. The election marked the first time that women in a Arab Persian Gulf monarchy could vote or run for national office. Shiite-Sunni tensions in Bahrain increased again after the U.S. invasion of Iraq.
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In terms of its economy, Bahrain is consistently ranked as the most free economy in the Middle East and the Arab world by the Wall Street Journal and Heritage Foundation’s Index of Economic Freedom. For this reason, the Kingdom of Bahrain is the Middle East venue of choice for international investors including HSBC, IBM, UPS and Ericsson. International corporations ... choose Bahrain as their regional base, notably, Citicorp, American Express, Nomura Investment Banking, Arab Banking Corporation, Gulf International Bank, DHL and Investcorp.
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