Bahrain, a general overview of Economy
The Kingdom of Bahrain is an archipelago, composed of thirty six islands located in the middle of the Arabian Gulf. Bahrain is located twenty miles off the eastern coast of Saudi Arabia and ~15 miles north of Qatar. Surface-wise, the country is relatively small - it covers roughly 270 square miles. It’s climate is desert-like with very hot summers often exceeding 110° F. Winters are mild both temperature and rainfall wise – the Winter temperatures average around 60° F (hot periods are from April to October).
From Pearls to Petroleum Drilling
Historically Bahrain was a significant player in the pearl production/export business - pearls it dominated Bahrain’s economy through the Second World War. At the beginning of the 1930s oil was discovered in Bahrain a new era in the economy of the country started. The leadership quickly acted to improve the aging and underdeveloped infrastructure and swiftly moved to the number one spot in the region if evaluated from the per-capita revenue. Today, in Bahrain, oil and oil derivatives production and processing account for about 60% of all exports and government revenues (see Bahrain Petroleum company BAPCO – it’s also an equivalent of one third of the overall GDP Bahrain today has the fourth largest income per capita in the Middle East and the average person in Bahrain has the highest life expectancy in the Gulf and a rate of literacy that exceeds many Western countries.
From Petroleum Drilling to Finance/Islamic Banking
On the other hand Bahrain’s oil resources are fairly limited if compared to other Gulf states. The Bahrain government realized this (one of the drawbacks of revenues depending on oil related income has to do with wild swings in the commodity prices) and it’s encouraging foreign and domestic investments with an aim of diversifying the country’s economic base. As a result of such activities, Bahrain has been fairly successful in developing industry, trade, banking sector and financial markets. In addition alternative industries are emerging as well. For example aluminum production has been on the rise and so far it has been very successful factor in the overall economic and business growth of the kingdom (for more on aluminum business in Bahrain see: Bahrain Aluminium Extrusion Company (BALEXCO). Furthermore, Bahrain is respected as a strong banking centre with a focus on investment and a variety of services provided via Islamic banking practices (see the site of the leading global Islamic Bank (Al Baraka)). Bahrain was named the world’s fastest growing financial center by the City of London’s Global Financial Centres Index (2008). For more detail’s consult the Ministry of Finance’s website.
When researching the fundamental's of Bahrain's economy you may also be interested in the following emerging business sectors, companies and/or institutions:
- Transportation (Gov Site, a ministry)
- International Banking (HSBC Site)
- BNP Paribas (Int’l Bank)
- Real Estate (CB Richard Ellis)
- Investment Management (Inovest)
Bahrain’s Looking Ahead
Bahrain has modern, efficient and functional business communication and transport facilities which led many large international corporations to establish presence in Bahrain. The growth of various business activities related to this also attracted a number of management and technology consulting companies, as well as audit, tax and regulatory experts. The construction sector attracted large international builders and a large number of logistics companies set up their shop in the kingdom as well. In 2004, the country reinforced the economic ties with the leading global economy, the USA. Bahrain signed the US-Bahrain Free Trade Agreement in order to remove the barriers to trade between the two friendly nations.