According to the 2006 Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal, Bahrain has the most free economy in the Middle East and is twenty-fifth overall in the world. Map of Economic Freedom released by the Heritage Foundation. ... The Heritage Foundation is a public policy research institute based in Washington, D.C., in the United States. ... The Wall Street Journal is an influential international daily newspaper published in New York City, New York with an average daily circulation of 1,800,607 (2002). ...

The survey put Bahrain ahead of regional competitors, United Arab Emirates, Israel and Qatar because "The government has sought to diversify the economy to reduce dependence on Bahrain's declining oil reserves and to encourage foreign investment. Because of its relatively cosmopolitan outlook, modern economy, favorable regulatory structure, and excellent communications and transportation infrastructure, many multinational firms doing business in the Persian Gulf are based in Bahrain."[1]

Macro-economic trend

This is a chart of trend of gross domestic product of Bahrain at market prices estimated by the International Monetary Fund with figures in millions of Bahraini Dinars.

For purchasing power parity comparisons, the US Dollar is exchanged at 0.30 Bahraini Dinars only.

Balance of Payments

Bahrain's current account balance is characterized by surpluses in merchandise trade and international services, and a large deficit in unilateral transfers, which is accounted for by the country's large expatriate workforce sending home a portion of its earnings. In 2003 and 2004, the balance of payments performance improved due to rising oil prices and increased receipts from the services sector. As a result, the current account balance registered a surplus of US$219 million in 2003 and a surplus of US$442 million in 2004, compared with a deficit of US$35 million in 2002. Bahrain's gross international reserves increased substantially in 2004 to US$1.6 billion, compared with US$1.4 billion in the previous three years (2001-2003). Unilateralism is an antonym for multilateralism. ... This article or section does not adequately cite its references or sources. ...

Diversification

Though Current GDP per capita shrank by 2.4% in the Eighties, it bounced back to a growth of 36% in the Nineties as a result of successful diversification initiatives. Bahrain's urgency in embracing economic liberalisation is due to its need to diversify the economy away from its limited oil supplies. Unlike its Gulf neighbours, Bahrain has little oil wealth and the economy has expanded into banking, heavy industries, retail and tourism. The Kingdom is the main banking hub for the Gulf and a centre for Islamic finance, which has been attracted by the strong regulatory framework for the industry. According to the International Monetary Fund's Financial System Stability Assessment of Bahrain's financial regulartory environment, published on 6 March 2006, found: For other uses, see Bank (disambiguation). ... Drawing of a self-service store. ... Bahrain is one of the most popular tourist destinations in the Middle East with over two million tourists a year. ... The International Monetary Fund (IMF) is an international organization that oversees the global financial system by observing exchange rates and balance of payments, as well as offering financial and technical assistance when requested. ... March 6 is the 65th day of the year in the Gregorian Calendar (66th in Leap years). ... For the Manfred Mann album, see 2006 (album). ...

• The financial system is enjoying strong performance under favorable circumstances, and is likely to remain a major contributor to overall growth. The main risk stems from potential overheating in the economies of the region, but the system should be resilient to likely shocks.
• Prudential regulations are modern and comprehensive, and supervision is generally effective, especially in the dominant banking sector. Supervisory capacity needs to be expanded in line with new regulations and to keep up with the growth and increasing sophistication of financial institutions.
• The further expansion of the Islamic sector, the development of housing finance, and the deepening of securities markets are important for the future growth of the financial system. The banking and insurance sectors will eventually undergo consolidation.[2]

In 2005, Bahrain signed the US-Bahrain Free Trade Agreement, becoming the first Gulf state to sign such a bilateral trade agreement with the United States. A massive privatisation programme is underway to sell off key government assets: utilities, banks, financial services, and telecommunications have started to come under the control of the private sector. The U.S.-Bahrain Free Trade Agreement (FTA) was signed September 14, 2004. ... A trade pact is a wide ranging tax, tariff and trade pact that usually also includes investment guarantees. ... Telecommunication involves the transmission of signals over a distance for the purpose of communication. ...

As a result the economy has been well positioned to exploit the extra revenues generated in the region thanks to the sustained high oil prices since 2002. In January 2006, the United Nations Economic and Social Commission for Western Asia cited Bahrain as the fastest growing economy in the Arab world. The United Nations Economic and Social Commission for Western Asia (UNESCWA or ESCWA) was established in 1973 (then as the UN Economic Commission for Western Asia) to encourage economic cooperation among its member states. ...

Between 1981 and 1993, Bahrain Government expenditures increased by 64%. During that same time, government revenues continued to be largely dependent on the oil industry and increased by only 4%. Bahrain has at times received significant budgetary support and project grants from Saudi Arabia, Kuwait, and the United Arab Emirates. 1981 (MCMLXXXI) was a common year starting on Thursday of the Gregorian calendar. ... 1993 (MCMXCIII) was a common year starting on Friday of the Gregorian calendar and marked the Beginning of the International Decade to Combat Racism and Racial Discrimination (1993-2003). ...

The government has used its modest oil revenues to build an advanced infrastructure in transportation and telecommunications. Bahrain is a regional financial and business center. Tourism, especially from the region, has proved another significant source of income. Bahrain is one of the most popular tourist destinations in the Middle East with over two million tourists a year. ...

Bahrain has benefited from the oil boom since 2001, with economic growth of 5.5%. It has succeeded in attracting investment from other Gulf states partly because it used the revenues of the 1970s-early 80s boom to invest in infrastructure development and other projects to improve the standard of living; health, education, housing, electricity, water, and roads all received attention. Lightning strikes during a night-time thunderstorm. ...

The success of ventures such as the Bahrain Grand Prix has raised the Kingdom's international profile, and combined with the boom in Islamic banking, has encourage major airlines to resume services to the country, with Lufthansa announcing on 14 March 2006 that it would schedule three flights a week to Manama from Frankfurt. The Bahrain Grand Prix (Arabic: جائزة البحرين الكبرى) is a Formula One Championship race which first took place at the Bahrain International Circuit on April 4, 2004. ... Deutsche Lufthansa AG (ISIN: DE0008232125) (pronounced ) is the largest German airline, and the second-largest in Europe (behind Air France-KLM, but before British Airways). ... For the Lebanese political coalition, see March 14 Alliance. ... For the Manfred Mann album, see 2006 (album). ...

Hydrocarbon industry

Petroleum and natural gas, the only significant natural resources in Bahrain, dominate the economy and provide about 60% of budget revenues. Bahrain was the first Persian Gulf state to discover oil. Because of limited reserves, Bahrain has worked to diversify its economy over the past decade. Bahrain has stabilized its oil production at about 40,000 barrels (6,400 m³) per day, and reserves are expected to last 10 to 15 years. The Bahrain Oil Company refinery was built in 1935, has a capacity of about 250,000 barrels (40,000 m³) per day, and was the first in the Persian Gulf. After selling 60% of the refinery to the state-owned Bahrain National Oil Company in 1980, Caltex, a U.S. company, now owns 40%. Saudi Arabia provides most of the crude for refinery operation via pipeline. Bahrain also receives a large portion of the net output and revenues from Saudi Arabia's Abu Saafa offshore oilfield. Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... Natural gas is a gaseous fossil fuel consisting primarily of methane but including significant quantities of ethane, butane, propane, carbon dioxide, nitrogen, helium and hydrogen sulfide. ... Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... Caltex is a petrol company. ...

The Bahrain National Gas Company operates a gas liquefaction plant that utilizes gas piped directly from Bahrain's oilfields. Gas reserves should last about 50 years at present rates of consumption.

The Persian Gulf Petrochemical Industries Company is a joint venture of the petrochemical industries of Kuwait, the Saudi Basic Industries Corporation, and the Government of Bahrain. The plant, completed in 1985, produces ammonia and methanol for export.

Bahrain's other industries include Aluminum Bahrain, which operates an aluminum smelter--the largest in the world with an annual production of about 525,000 metric tons --and related factories, such as the Aluminum Extrusion Company and the Persian Gulf Aluminum Rolling Mill. Other plants include the Arab Iron and Steel Company's iron ore pelletizing plant (4 million tons annually) and a shipbuilding and repair yard.

Bahrain's development as a major financial center has been the most widely heralded aspect of its diversification effort. International financial institutions operate in Bahrain, both offshore and onshore, without impediments. In 2001, Bahrain's central bank issued 15 new licenses. More than 100 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms. Bahrain's international airport is one of busiest in the Persian Gulf, serving 22 carriers. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East. Internationally recognised Bahraini companies include Investcorp, the venture capital firm credited with turning around the fortunes of Gucci. Investcorp is a publicly traded boutique investment firm based in Bahrain. ... Gucci, or the House of Gucci, is an Italian fashion and leather goods label. ...

Economy - overview

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 numerous multinational firms with business in the Persian Gulf. A large share of exports consists of petroleum products made from imported crude. 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. Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... Crude can refer to: impure, unsanitary or imperfect Off-color humor (or crude humour) Petroleum in its unprocessed form ‹ The template below has been proposed for deletion. ...

GDP: purchasing power parity - $14.08 billion (2005 est.)

GDP: official exchange rate - $11.58 billion (2005 est.)

GDP - real growth rate: 5.9% (2005 est.)

GDP - per capita: purchasing power parity - $20,500 (2005 est.)

GDP - composition by sector:
agriculture: 1%
industry: 46%
services: 53% (1996 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 0.5% (1998 est.)

Labor force: 295,000 (1998 est.)
note: 44% of the population in the 15-64 age group is non-national (July 1998 est.)

Labor force - by occupation: industry, commerce, and service 79%, government 20%, agriculture 1% (1997 est.)

Unemployment rate: 15% (1998 est.)

Budget:
revenues: $1.5 billion
expenditures: $1.9 billion, including capital expenditures of $NA (1998)

Industries: petroleum processing and refining, aluminium smelting, offshore banking, ship repairing; tourism Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... General Name, Symbol, Number aluminium, Al, 13 Chemical series poor metals Group, Period, Block 13, 3, p Appearance silvery Atomic mass 26. ... An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. ... Italian ship-rigged vessel Amerigo Vespucci in New York Harbor, 1976 A ship is a large, sea-going watercraft. ... Tourists at Oahu island, Hawaii Tourism is the act of travel for predominantly recreational or leisure purposes, and also refers to the provision of services in support of this act. ...

Industrial production growth rate: 3.4% (1995)

Electricity - production: 4,770 GWh (1998)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 1,090 GWh (1999)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: fruit, vegetables; poultry, dairy products; shrimp, fish Fruit stall in Barcelona, Spain. ... Vegetables in a market Venn diagram representing the relationship between (botanical) fruits and vegetables. ... This article or section does not cite its references or sources. ... Dairy products are generally defined as foodstuffs produced from milk. ... Superfamilies Alpheoidea Atyoidea Bresilioidea Campylonotoidea Crangonoidea Galatheacaridoidea Nematocarcinoidea Oplophoroidea Palaemonoidea Pandaloidea Pasiphaeoidea Procaridoidea Processoidea Psalidopodoidea Stylodactyloidea True shrimp are small, swimming, decapod crustaceans classified in the infraorder Caridea, found widely around the world in both fresh and salt water. ... A giant grouper at the Georgia Aquarium Fish are aquatic vertebrates that are typically cold-blooded; covered with scales, and equipped with two sets of paired fins and several unpaired fins. ...

Exports: $3.3 billion (f.o.b., 1998)

Exports - commodities: petroleum and petroleum products 61%, aluminum 7% Pumpjack pumping an oil well near Sarnia, Ontario Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. ... Aluminum is a soft and lightweight metal with a dull silvery appearance, due to a thin layer of oxidation that forms quickly when it is exposed to air. ...

Exports - partners: India 18%, Japan 11%, Saudi Arabia 8%, South Korea 7%, UAE 5% (1997) This article or section does not adequately cite its references or sources. ...

Imports: $3.5 billion (f.o.b., 1998)

Imports - commodities: nonoil 59%, crude oil 41%

Imports - partners: Saudi Arabia 45%, United States 10%, United Kingdom 6%, Japan 5%, Germany 4% (1997)

Debt - external: $2 billion (1997)

Economic aid - recipient: $48.4 million (1995)

Currency: 1 Bahraini dinar (BD) = 1,000 fils ISO 4217 Code BHD User(s) Bahrain Inflation 2. ... Fils can mean Fils River is a river in Germany Fils (currency) is a subdivision of currency used in many Arab countries This is a disambiguation page: a list of articles associated with the same title. ...

Exchange rates: Bahraini dinars (BD) per US$1 - 0.3760 (fixed rate)

Fiscal year: calendar year

References

• This article contains material from the CIA World Factbook which, as a U.S. government publication, is in the public domain. 2006
• This article contains material from the US Department of State's Background Notes which, as a US government publication, is in the public domain. 2003

The World Factbook 2007 (government edtion) cover. ... The public domain comprises the body of all creative works and other knowledge—writing, artwork, music, science, inventions, and others—in which no person or organization has any proprietary interest. ... The Background Notes series is a collection of works by the United States Department of State. ... The public domain comprises the body of all creative works and other knowledge—writing, artwork, music, science, inventions, and others—in which no person or organization has any proprietary interest. ...

External links

• Daily Star (Beirut), 6 January 2006, Bahrain's 'honesty' keeps its economy freest in region
• Gulf News, 7 January 2006, Bahrain ranked freest Arab economy

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