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Bahrain (02/02)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Kingdom of Bahrain
(Changed from State of Bahrain, February 14, 2002)

Geography
Area: 693 sq. km. (268 sq. mi.); about four times the size of Washington, DC. Bahrain is an archipelago consisting of 33 islands, only six of them inhabited.
Cities: Capital--Manama, pop. 145,000. Other city--Al Muharraq, pop. 81,000.
Terrain: Low interior plateau and hill on main island.
Climate: Hot and humid from May-September, temperate from October-April.

People
Nationality: Noun and adjective--Bahraini(s).
Population (2001 est.): 645,351; 66% indigenous.
Ethnic groups: Bahraini 63%, Asian 19%, other Arab 10%, Iranian 8%.
Religions: Shi'a and Sunni Muslim, with small Roman Catholic, Prostestant, and Jewish communities.
Languages: Arabic (official), English, Farsi, Urdu.
Education: Attendance--73%. Literacy (2001)--85.2% (male 89.1% female 69%).
Work force: 330,000 (about 36% indigenous, 44% of the population in the 15-64 age group is nonnational).
Work force: Industry and commerce--74%; services--19%; agriculture--4%; government--3%.

Government
Type: Constitutional Monarchy (as of February 14, 2002).
Independence: August 15, 1971.
Constitution: May 26, 1973; suspended August 26, 1975, amended and ratified again February 14, 2001.
Branches: Executive--Amir (chief of state), prime minister (head of government), Council of Ministers (cabinet). Judicial--independent judiciary with right of judicial review. Appointed Consultative Council (40 members) may review and propose legislation.
Administrative subdivisions: Five governorates.
Political parties: None.
Suffrage: There are municipal elections, and in February 2001 Bahrain held a free popular constitutional referendum in which both men and women over the age of 18 voted. However, this is the extent of Bahrani enfranchisement.

Economy
GDP (2001 est.) $8.1 billion.
Growth rate (2001 est.) 5%.
Per capita GDP (2001 est.) $12,790.
Natural resources: Oil, associated and nonassociated natural gas, fish, pearls.
Agriculture (1% of GDP): Products--eggs, vegetables, dates, fish. Industry (46% of GDP): Types--manufacturing (21% of GDP), oil (16%), aluminum, ship repair, natural gas, fish.
Services (31% of GDP): Banking, real estate, insurance.
Public administration: 20% of GDP.
Trade (2000): Exports--$5.8 billion: petroleum and petroleum products (80%), aluminum (7%), fish. Major markets--Saudi Arabia, U.S., Japan. Imports--$4.2 billion: machinery, industrial equipment, motor vehicles, foodstuffs, clothing. Major suppliers--U.S., U.K., Japan.

PEOPLE
Most of the population of Bahrain is concentrated in the two principal cities, Manama and Al Muharraq. The indigenous people--66% of the population--are from the Arabian Peninsula and Iran. The most numerous minorities are Europeans and South and East Asians.

Islam is the official religion. Though Shi'a Muslims make up more than two-thirds of the population, Sunni Islam is the prevailing belief held by those in the government, military, and corporate sectors. Roman Catholic and Protestant churches, as well as a tiny indigenous Jewish community, also exist in Bahrain.

Bahrain has traditionally boasted an advanced educational system. Schooling and related costs are entirely paid for by the government, and, although not compulsory, primary and secondary attendance rates are high. Bahrain also encourages institutions of higher learning, drawing on expatriate talent and the increasing pool of Bahrainis returning from abroad with advanced degrees. Bahrain University has been established for standard undergraduate and graduate study, and the College of Health Sciences--operating under the direction of the Ministry of Health--trains physicians, nurses, pharmacists, and paramedics.

HISTORY
Bahrain was once part of the ancient civilization of Dilmun and served as an important link in trade routes between Sumeria and the Indus Valley as long as 5,000 years ago. Since the late 18th century, Bahrain has been governed by the Al Khalifa family, which created close ties to Britain by signing the General Treaty of Peace in 1820. A binding treaty of protection, known as the Perpetual Truce of Peace and Friendship, was concluded in 1861 and further revised in 1892 and 1951. This treaty was similar to those entered into by the British Government with the other Persian Gulf principalities. It specified that the ruler could not dispose of any of his territory except to the United Kingdom and could not enter into relationships with any foreign government other than the United Kingdom without British consent. The British promised to protect Bahrain from all aggression by sea and to lend support in case of land attack.

After World War II, Bahrain became the center for British administration of treaty obligations in the lower Persian Gulf. In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain joined the other eight states (Qatar and the seven Trucial Sheikhdoms, which are now called the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. By mid-1971, however, the nine sheikhdoms still had not agreed on terms of union. Accordingly, Bahrain sought independence as a separate entity and became fully independent on August 15, 1971, as the State of Bahrain.

Based on its 1971 constitution, Bahrain elected its first parliament in 1973, but just 2 years later, in August 1975, the Amir disbanded the National Assembly because the Parliament attempted to legislate the end of Al-Khalifa rule and the expulsion of the U.S. Navy from Bahrain. Political unrest broke out in December 1994 and included sporadic mass protests, skirmishes with local law enforcement, arson, and property attacks. In June 1995, the first Bahraini cabinet change in 20 years took place, producing mixed public response. In 1996, the Amir increased the membership of the Consultative Council, which he created in 1993, from 30 to 40, to provide advice and opinion on legislation proposed by the cabinet and, in certain cases, suggest new laws on its own. In 1998 Shaykh Hamad bin Isa Al Khalifa became Amir after the death of his father, Shaykh Isa bin Hamad Al Halifa.

GOVERNMENT AND POLITICAL CONDITIONS  
Bahrain is a hereditary emirate under the rule of the Al Khalifa family. The Amir, Shaykh Hamad bin Isa Al Khalifa, his uncle--Khalifa bin Sulman Al Khalifa (Prime Minister) and Crown Prince Shaykh Salman bin Hamad Al Khalifa (Commander of the Bahraini defense forces), govern Bahrain in consultation with a council of ministers. The government faces few judicial checks on its actions. The Amir recently created the Supreme Judicial Council which is intended to regulate the country's courts and separate the administrative and judicial branches of government. Despite their minority status, the Sunnis predominate because the ruling family is Sunni and is supported by the armed forces, the security service, and powerful Sunni and Shi'a merchant families.

Since 1998, the new Amir has worked to make Bahraini society more democratic and open. Such changes have included the return to the Constitution as the supreme source for the country's laws and the legalization of nongovernmental organizations. On February 14, 2001, the people of Bahrain took part in a popular referendum, in which they approved by 98.4% a return to the Constitution. Among other issues, the referendum paved the way for Bahrain to become a constitutional monarchy and to change the country's official name from the State of Bahrain to the Kingdom of Bahrain (a change which took effect in February 2002).

Along with improvements in basic civil rights protections and freedoms of expression and association, the government took the first steps to return to Bahrainis the right to elect a legislature. In his October 2001 speech to open the tenth session of the Consultative Council, the Amir declared his intention to hold municipal elections in 2002 and legislative elections before 2004. He also stated that the legislative branch of government would have two houses, one directly elected by universal male and female suffrage and the other appointed. Bahrain's progress toward political and economic reform has been steady.

Bahrain's five governorates are administered by the Minister of State for Municipalities and the Environment in conjunction with each Governorate's Governor. A complex system of courts, based on diverse legal sources, including Sunni and Shi'a Sharia (religious law), tribal law, and other civil codes and regulation, was created with the help of British advisers in the early 20th century. This judiciary administers the legal code and reviews laws to ensure their constitutionality.

Principal Government Officials
Amir--Shaykh Hamad bin Isa Al Khalifa
Crown Prince and Commander in Chief of Bahrain Defense Force--
Shaykh Salman bin Hamad Al Khalifa
Prime Minister--Shaykh Khalifa bin Salman Al Khalifa
Minister of Foreign Affairs--Shaykh Mohammad bin Mubarak Al Khalifa

Ambassador to the United States--Khalifa bin Ali Al-Khalifa
Ambassador to the United Nations--Abdul Aziz Bu Alai

Bahrain maintains an embassy in the United States at 3502 International Drive NW, Washington, DC 20008; tel: (202) 342-0741; fax: (202) 362-2192). The Bahraini UN Mission is located at 747 3rd Avenue, New York, NY 10017; tel: (212) 751-8805.

DEFENSE
Under the Ministry of Defense, the Bahrain Defense Force (BDF) numbers about 9,000 personnel and consists of army, navy, air force, air defense, and Amiri guard units. Separate from the BDF, the public security forces and the coast guard report to the Ministry of the Interior. Bahrain, in conjunction with its Gulf Cooperation Council (GCC) partners--Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates--has moved to upgrade its defenses over the last 10 years in response to the threat posed by the Iran-Iraq and Gulf wars. In 1982, the GCC gave Bahrain $1.7 billion to help improve its defenses. Bahrain's defense spending since 1999 has been steady. The government spends around $320 million annually on their military.

After the Gulf war, Bahrain received additional military support from the United States, including the sale of eight Apache helicopters and subsequent sales of 54 M60A3 tanks, 12 F-16C/D aircraft, and 14 Cobra helicopters. Joint air and ground exercises also have been planned and executed to increase readiness throughout the Gulf. Bahrain and the United States signed a Defense Cooperation Agreement in October 1991 granting U.S. forces access to Bahraini facilities and ensuring the right to pre-position material for future crises. In October 2001, President Bush announced his intention to designate Bahrain as a major non-NATO ally.

ECONOMY
Bahrain has a mixed economy, with government control of many basic industries, including the important oil and aluminum industries. 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 received significant budgetary support and project grants from Saudi Arabia, Kuwait, and the United Arab Emirates.

Privatization could help Bahrain's economy. However, as of the Spring 2001 the government of Bahrain still wholly owned the Bahrain Petroleum Company. Utilities, banks, financial services, and telecommunications have started though, to come under the control of the private sector.

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. Regional tourism also is a significant source of income. Bahrain benefited from the region's economic boom in the late 1970s and 1980s. During that time, the government emphasized infrastructure development and other projects to improve the standard of living; health, education, housing, electricity, water, and roads all received attention.

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 Arabian 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 per day (b/d), and reserves are expected to last 10-15 years. The Bahrain Oil Company refinery was built in 1935, has a capacity of about 250,000 b/d, and was the first in the 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.

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 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 (mt)--and related factories, such as the Aluminum Extrusion Company and the 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 Gulf, serving 22 carriers. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East.

FOREIGN RELATIONS
Bahrain plays a modest, moderating role in regional politics and adheres to the views of the Arab League on Middle East peace and Palestinian rights. Since achieving independence in 1971, Bahrain has maintained friendly relations with most of its neighbors and with the world community. It generally pursues a policy of close consultation with neighboring states and works to narrow areas of disagreement.

Bahrain is a member of the GCC, established on May 26, 1981 with five other Gulf states. The country has fully complied with steps taken by the GCC to coordinate economic development and defense and security planning. In December 1994, it concurred with the GCC decision to drop secondary and tertiary boycotts against Israel. In many instances, it has established special bilateral trade agreements. During the Gulf war, Bahraini pilots flew strikes in Iraq, and the island was used as a base for military operations in the Gulf.

Bahrain-Iran relations have been strained since the Iranian revolution and the 1981 discovery of a planned Iran-sponsored coup in Bahrain. Bahraini suspicions of the Iranian role in local unrest in the mid-1990s remain. However, with the decline of Iraq as a regional powerbroker, Bahrain has begun taking steps to improve relations with Iran and increase regional harmony. These efforts have included encouraging Bahrain-Iran trade.

U.S.-BAHRAINI RELATIONS
When Bahrain became independent, the traditionally excellent U.S.-Bahrain relationship was formalized with the establishment of diplomatic relations. The U.S. embassy at Manama was opened September 21, 1971, and a resident ambassador was sent in 1974. The Bahraini embassy in Washington, DC, opened in 1977. In October 1991, Amir Isa bin Sulman Al Khalifa made a state visit to Washington, after which he visited other parts of the U.S. as well. In 2001, Amir Hamad bin Isa Al-Khalifa made his first visit to the U.S. after succeeding his father in 1999.

Since 1948 Bahrain has been the headquarters of U.S. naval activity in the Gulf. Currently, the Naval Support Activity (NSA), occupying 79 acres of land in the center of downtown Manama, is the headquarters of the U.S. Navy's Fifth Fleet. Manama also is the home port for four U.S. Navy minesweepers. During the Gulf War, U.S. and Bahraini aircraft flew thousands of sorties against Iraq. Most recently, Bahrain provided extensive basing and overflight clearances for a multitude of U.S. aircraft operating in support of Operation Enduring Freedom, and the Bahrain Monetary Agency moved quickly to restrict terrorists' ability to transfer funds through Bahrain's financial system. Bahrain also cooperated effectively on criminal investigation issues in support of the campaign on terrorism. In October 2001, President Bush announced his intention to designate Bahrain as a major non-NATO ally.

U.S.-Bahraini economic ties have grown steadily since 1932, when Americans began to help develop Bahrain's oil industry. Currently, many American banks and firms use Bahrain as a base for regional operations. In 1986, the United States displaced Japan to become the top exporter to Bahrain.

Principal U.S. Embassy Officials
Ambassador--Ronald E. Neumann
Deputy Chief of Mission--Robert S. Ford
Political/Economic Officer--Gregory N. Hicks
Economic/Commercial Officer--Tracy Hailey
Consular Officer--Brian L. Simmons
Public Affairs Officer (USIS)--Donna J. Winton
Agricultural Trade Officer--Ron Verdonk (resident in Dubai, UAE)
Administrative Officer--Martin P. Hohe

The U.S. embassy in Bahrain is located off Sheikh Isa Highway, Building 979, Road 3119 (next to the Al-Ahli Sports club), Block 331, Zinj, Manama, Bahrain. The mailing address is PO Box 26431, Manama, Bahrain; tel: (973) 273300, after hours 275126; fax: (973) 272594. The embassy's hours are 8:00 a.m.-4:00 p.m., Saturdays-Wednesdays.



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