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Bahrain (01/06)


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Flag of Bahrain is red with a white serrated band--with five white points--on the hoist side.

PROFILE

OFFICIAL NAME:
Kingdom of Bahrain

Geography
Area: 727 sq. km. (274 sq. mi.); approximately four times the size of Washington, DC. Bahrain is an archipelago of 36 islands located off the eastern coast of Saudi Arabia. The four main islands are joined by causeways, and make up about 95% of the total land area.
Cities: Capital--Manama, pop. (2002 est.) 148,000. Other cities--Al Muharraq.
Terrain: Low desert plain (highest elevation point--122 m).
Climate: Hot and humid from May-September, with average highs ranging from 30o-40o C (86o-104o F). Maximum temperatures average 20o-30o C (68o-86o F) the remainder of the year.

People
Nationality: Noun and adjective--Bahraini(s).
Population (July 2005 est.): 688,345, including about 235,108 non-nationals.
Annual growth rate (2005 est.): 1.51%.
Ethnic groups: Bahraini 63%, Asian 19%, other Arab 10%, Iranian 8%.
Religions: 98% Muslim (Shi'a 70%, Sunni 30%), with small Christian, Jewish and Hindu communities.
Languages: Arabic (official), English, Farsi, and Urdu are also widely spoken.
Education: Education is not compulsory, but is provided free to Bahrainis and non-nationals at all levels, including higher education. Estimated net primary school attendance (1991-2001)--84%. Adult literacy, age 15 and over (2003 est.)--89.1% for the overall population (male 91.9%, female 85%).
Health: Infant mortality rate (2005 est.)--17.27 deaths/1,000 live births. Life expectancy--72 yrs. males, 77 yrs. females.
Work force (2005 est.): 380,000 of which 59% are foreigners and 20.8% female.

Government
Type: Constitutional hereditary monarchy.
Independence: August 15, 1971 (from the United Kingdom).
Constitution: Approved and promulgated May 26, 1973; suspended on August 26, 1975; the National Action Charter was approved by a national popular referendum on February 14-15, 2001, and a new constitution was issued on February 14, 2002.
Branches: Executive--King (chief of state); Prime Minister (head of government); Council of Ministers (cabinet) is appointed by the King and headed by the Prime Minister.
Legislative--The bicameral parliament (al-Majlis al-Watani) consists of a 40-member elected House of Deputies and a 40-member Shura Council appointed by the King. Members of both chambers serve four-year terms. Judicial--High Civil Appeals Court. The judiciary is independent with right of judicial review.
Administrative subdivisions: 12 municipalities (manatiq): Al Hidd, Al Manamah, Al Mintaqah al Gharbiyah, Al Mintaqah al Wusta, Al Mintaqah ash Shamaliyah, Al Muharraq, Ar Rifa' wa al Mintaqah al Janubiyah, Jidd Hafs, Madinat Hamad, Madinat 'Isa, Juzur Hawar, Sitrah.
Political parties: None. Formal parties are banned, but political societies have been sanctioned since 2001 and were formally allowed to register per a July 2005 law.
Suffrage: Universal at age 18.

Economy
GDP (2005 est.): $11.58 billion.
Real GDP growth rate (2005 est.): 5.9%.
Per capita GDP (2005 est.): $20,500.
Natural resources: Oil, natural gas, fish, pearls.
Agriculture (less than 1% of GDP): Products--fruit, vegetables, poultry, dairy products, shrimp, fish.
Industry: Types--oil and gas (13.1% of GDP), manufacturing (12.4% of GDP), aluminum.
Services: Finance (24.2% of GDP), transport and communications (8.9% of GDP), real estate (9.2% of GDP); government services (14.8% of GDP).
Trade (2004--12.4% of GDP): Exports--$8.14 billion: oil and other mineral products, base metals, textiles. Major markets--India (4.3%), U.S. (2.9%), Saudi Arabia (3.0%), Japan (1.7%), South Korea (1.4%). Imports--$7.83 billion: crude oil, machinery and appliances, transport equipment, foodstuffs. Major suppliers--Saudi Arabia (32.4%), U.S. (5.6%), France (4.8%), U.K. (6.1%), Germany (6.1%), Japan (7.3%).

PEOPLE
Bahrain is one of the most densely populated countries in the Middle East; about 89% of the population lives in the two principal cities of Manama and Al Muharraq. Approximately 66% of the indigenous population is originally from the Arabian Peninsula and Iran. Bahrain currently has a sizeable foreign labor force (about 34% of the total population). The government's policies on naturalization remain controversial. In June 2002, the King issued a decree allowing citizens of the Gulf Cooperation Council (GCC) to take up dual Bahraini nationality. Opposition political groups charge that the government is granting citizenship to foreign nationals who have served in the Bahraini armed forces and security services to alter the demographic balance of the country, which is primarily Shi'a. According to passport officials, about 40,000 individuals have been naturalized over the past 50 years (about 10% of the total population).

The indigenous population is 98% Muslim. Although more than two-thirds of the indigenous population is Shi'a Muslim, the ruling family and the majority of government, military, and corporate leaders are Sunni Muslims. The small indigenous Christian and Jewish communities make up the remaining 2% of the population. Roughly half of foreign resident community are non-Muslim, and include Christians, Hindus, Baha'is, Buddhists and Sikhs.

Bahrain has invested its oil revenues in developing an advanced educational system. The first public schools for girls and boys were opened in the 1920s. The government continues to pay for all schooling costs. Although school attendance is not compulsory, primary and secondary attendance rates are high, and literacy rates are currently among the highest in the region. Higher education is available for secondary school graduates at the Bahrain University, Arabian Gulf University and specialized institutes including the College of Health Sciences--operating under the direction of the Ministry of Health--which trains physicians, nurses, pharmacists, and paramedics. The government has identified providing educational services to the Gulf Cooperation Council as a potential economic growth area, and is actively working to establish Bahrain as a regional center for higher education.

HISTORY
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.

In the 1830s the Al Khalifa signed the first of many treaties establishing Bahrain as a British Protectorate. Similar to the binding treaties of protection entered into by other Persian Gulf principalities, the agreements entered into by the Al Khalifa prohibited them from disposing of territory and entering into relationships with any foreign government without British consent in exchange for British protection against the threat of military attack from Ottoman Turkey. The main British naval base in the region was moved to Bahrain in 1935 shortly after the start of large-scale oil production.

In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain initially joined the other eight states (Qatar and the seven Trucial Sheikhdoms now the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. The nine sheikhdoms still had not agreed on terms of union by 1971, however, prompting Bahrain to declare itself fully independent on August 15, 1971.

Bahrain promulgated a constitution and elected its first parliament in 1973, but just two years later, in August 1975, the Amir disbanded the National Assembly after it attempted to legislate the end of Al-Khalifa rule and the expulsion of the U.S. Navy from Bahrain. In the 1990s, Bahrain suffered from repeated incidents of political violence stemming from the disaffection of the Shi'a majority. In response, the Amir instituted the first Bahraini cabinet change in 20 years in 1995 and also and increased the membership of the Consultative Council, which he had created in 1993 to provide advice and opinion on legislation proposed by the cabinet and, in certain cases, suggest new laws on its own, from 30 to 40 the following year. These steps led to an initial decline in violent incidents, but in early 1996 a number of hotels and restaurants were bombed, resulting in several fatalities. Over 1,000 people were arrested and held in detention without trial in connection with these disturbances. The government has since released these individuals (see Government and Political Conditions Section below for details).

GOVERNMENT AND POLITICAL CONDITIONS
Shaikh Hamad bin Isa Al Khalifa succeeded the throne in March 1999, after the death of his father Shaikh Isa bin Hamad Al Khalifa, Bahrain's ruler since 1961. He championed a program of democratic reform shortly after his succession. In November 2000, Shaikh Hamad established a committee to create a blueprint to transform Bahrain from a hereditary emirate to a constitutional monarchy within 2 years. The resulting "National Action Charter" was presented to the Bahraini public in a referendum in February 2001. In the first comprehensive public vote in Bahrain since the 1970s, 94.8% of voters overwhelmingly endorsed the charter. That same month, Shaikh Hamad pardoned all political prisoners and detainees, including those who had been imprisoned, exiled or detained on security charges. He also abolished the State Security Law and the State Security Court, which had permitted the government to detain individuals without trial for up to 3 years.

On February 14, 2002, one year after the referendum endorsing his National Action Charter, Shaikh Hamad pronounced Bahrain a constitutional monarchy and changed his status from Amir to King. He simultaneously announced that the first municipal elections since 1957 would be held in May 2002, and that a bicameral parliament, with a representative lower house, would be reconstituted with parliamentary elections in October 2002. As part of these constitutional reforms, the government also created an independent financial watchdog empowered to investigate cases of embezzlement and violations of state expenditure in July 2002.

Turnout for the May 2002 municipal elections was 51%, with female voters making up 52 % percent of voters. Turnout for the 2002 parliamentary elections--the first in almost three decades--was 53% in the first round and 43% in the second round, despite the fact that the four political societies, including the largest Shia society, organized a boycott to protest constitutional amendments enacted by the King that gave the appointed upper chamber of parliament voting rights equal to the elected lower chamber. Sunni Islamists won 19 of the 40 seats. Despite strong participation by female voters, none of the female candidates standing in these elections won a parliamentary seat. The new parliament held its first joint sitting in December 2002. Bahrain will hold elections for the five municipal councils in May 2006 and for the 40 seats in the lower house of parliament in October 2006.

Bahrain has 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 regulations created with the help of British advisers in the early 20th century. In 2001, Shaikh Hamad created the Supreme Judicial Council to regulate these courts and separate the administrative and judicial branches of government.

Principal Government Officials
King--Shaikh Hamad bin Isa Al Khalifa
Crown Prince and Commander in Chief of the Bahrain Defense Force--Shaikh Salman bin Hamad Al Khalifa
Prime Minister--Shaikh Khalifa bin Salman Al Khalifa
Deputy Prime Minister and Islamic Affairs Minister--Shaikh Abdullah bin Khaled Al Khalifa
Deputy Prime Minister for Ministerial Committees--Shaikh Mohammad bin Mubarak Al Khalifa
Deputy Prime Minister and Transport and Communications Minister--Shaikh Ali bin Khalifa Al Khalifa
Foreign Minister--Shaikh Khalid bin Ahmed Al Khalifa

Ambassador to the United States--Dr. Naser M.Y. Al Belooshi
Ambassador to the United Nations--Tawfeeq Al-Ahmed Al-Mansoor

Bahrain maintains an embassy in the United States at 3502 International Drive N.W., Washington, D.C. 20008; tel: [1] (202) 342-1111; fax: [1] (202) 362-2192. The Bahraini Mission to the UN is located at866 Second Avenue, New York, NY 10017; tel: [1] (212)223-6200; fax [1] (202) 319-0687.

ECONOMY
The first Gulf state to discover oil, 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. Revenues from oil and natural gas currently account for 13.1% of GDP and provide about 74% of government income. The Bahrain Oil Company refinery built in 1935, the first in the Gulf, has a capacity of about 260,000 b/d. Since 1980, 60% of the refinery has been owned by the Bahrain National Oil Company and 40% by the U.S. company Caltex. Saudi Arabia provides most of the crude for refinery operation via pipeline. Through an agreement with Saudi Arabia, 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. Growth in the hydrocarbons sector will be contingent upon new discoveries--Bahrain awarded exploration rights to Malaysia's Petronas and the U.S.' Chevron Texaco after the resolution of Bahrain's long-standing territorial dispute with Qatar, but no meaningful finds have been announced to date. Bahrain's other industries include the majority state-owned Aluminum Bahrain (Alba)--which operates the largest aluminum smelter in the world outside Eastern Europe with an annual production of about 720,000 metric tons (mt) in 2005 after the completion of an expansion program--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. Bahrain is a regional financial and business center; international financial institutions operate in Bahrain, both offshore and onshore, without impediments, and the financial sector is currently the largest contributor to GDP at 24.2%. More than 100 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms. Bahrain has also made a concerted effort to become the leading Islamic finance center in the world, standardizing regulations of the Islamic banking industry. It currently has 28 Islamic banks--the largest concentration of Islamic financial institutions.

Bahrain is working to develop other service industries such as information technology, healthcare and education. The government has used its oil revenues to build an advanced infrastructure in transportation and telecommunications. The transport and communications sector grew by almost 9% in 2002 and is likely to expand as the government proceeds with liberalization of the state-owned telecommunications industry. The state monopoly--Batelco--was broken in April 2003. Bahrain's international airport is one of the busiest in the Gulf. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East.

The government of Bahrain moved toward privatizing the production of electricity and water by licensing Al Ezzal to construct an independent power plant that will cost $500 million. It is expected to start operating at full capacity in April 2006. In January 2006, the Finance Minister announced that Al Hidd Power Plant will be sold for $738 million to consortium of British, Japanese, and Belgian companies.

Regional tourism is also a significant source of income. The government continues to favor large-scale tourism projects. It opened the only Formula One race track in the Middle East in 2004, and has awarded tenders for several tourist complexes.

Government revenues continue to be largely dependent on the oil industry. Bahrain has received significant budgetary support and project grants from Saudi Arabia, Kuwait, and the United Arab Emirates. The reconstituted parliamentary process has produced spirited debate over government spending, particularly defense spending, but no actual reductions. Ministry of Defense spending will account for 18% of current spending in 2005 and 2006 based on the budget approved by parliament in July 2005. The Ministry of Education and Ministry of the Interior are the second and third largest spenders. The bulk of capital outlays have been allocated to improving housing and infrastructure in line with government efforts to raise the standard of living of the Shi'a population and to attract foreign investment.

The government has also started to extend protections to workers. Private sector employees won permission to form unions in late 2002; King Hamad has given his tentative approval for the formation of unions in government departments. As part of the government's labor reform program, it presented legislation to parliament to form the Labor Market Regulatory Authority (LMRA) and establish a fund to support the training of Bahraini workers.

Bahrain and the United States signed a free trade agreement in September 2004. The Bahraini parliament ratified it in July 2005, and the U.S. Congress followed in December 2005. President Bush signed the agreement into law in January 2006. Entry-into-force is pending as Bahrain completes implementing legislation.

DEFENSE
The Bahrain Defense Force (BDF) numbers about 9,000 personnel and consists of army, navy, air force, air defense, and royal guard units. The public security forces and the coast guard are separate from the BDF and report to the Ministry of the Interior. Bahrain's defense spending since 1999 has been steady. The government spends around $440 million annually on their military, about 20% of current expenditures. The reconstituted parliamentary process has produced spirited debate over government spending, particularly defense spending, but no actual reductions.

With the help of the U.S. and the Gulf Cooperation Council (GCC), Bahrain has made significant efforts to upgrade its defense systems and modernize its armed forces over the last 20 years. In 1982, the GCC gave Bahrain $1.7 billion for this purpose. Since the 1991 Gulf War, the U.S. has provided military and defense technical assistance and training to Bahrain from foreign military sales (FMS), commercial sources, excess defense article sales (EDA) and under the International Military and Education Training (IMET) program. The U.S. Office of Military Cooperation in Bahrain is attached to the U.S. Embassy and manages the security assistance mission. U.S. military sales to Bahrain currently total $2.5 billion. Principal U.S. military systems purchased by the BDF include eight Apache helicopters, 54 M60A3 tanks, 12 F-16C/D aircraft, 14 Cobra helicopters, and the TPS-59 radar system. Bahrain has received $255 million in U.S. EDA since 1995.

Military exercises are conducted on a regular basis to increase the BDF's readiness and improve coordination with the U.S. and other GCC forces. The BDF also sends personnel to the United States for military training. This training includes courses from graduate level professional military education down to entry level technical training.

FOREIGN RELATIONS
Since achieving independence in 1971, Bahrain has pursued a policy of close consultation with neighboring states. Bahrain became a member of the United Nations and the Arab League in 1971. In 1981 it joined its five neighbors--Saudi Arabia, Oman, Kuwait, the U.A.E. and Qatar--to form the strategic Gulf Cooperation Council (GCC). Bahrain has complied with GCC efforts steps to coordinate economic development and defense and security planning. In December 1994, for example, Bahrain concurred with the GCC decision to drop secondary and tertiary boycotts against Israel. Bahrain also responded positively to Kuwait's request to deploy the GCC collective defense force, "Peninsula Shield," during the build up and execution of Operation Iraqi Freedom (OIF) in 2003.

In addition to maintaining strong relations with its largest financial backers, Saudi Arabia, Kuwait and the U.A.E., Bahrain has worked to improve its relations with Qatar and Iran in recent years. Bahrain-Iran relations have been strained since the discovery in 1981 of an Iran-sponsored coup plot in Bahrain. Bahraini suspicions of the Iranian role in local unrest in the mid-1990s remain. However, with the fall of Saddam Hussein's regime in Iraq, Bahrain has begun taking steps to improve relations with Iran. These efforts have included encouraging Bahrain-Iran trade and maritime security cooperation.

On March 16, 2001, the International Court of Justice (ICJ) announced its judgment on the long-standing maritime delimitation and territorial dispute between Bahrain and Qatar. The binding judgment awarded sovereignty over the Hawar Islands and Qit'at Jaradah to Bahrain and sovereignty over Zubarah (part of the Qatar Peninsula), Janan Island and Fasht ad Dibal to Qatar. The peaceful settlement of this dispute has allowed for renewed co-operation.

Bahrain's strategic partnership with the U.S. has intensified since 1991. Bahraini pilots flew strikes in Iraq during the 1991 Gulf War, and the island was used as a base for military operations in the Gulf. Bahrain also provided logistical and basing support to international Maritime Interdiction efforts to enforce UN sanctions and prevent illegal smuggling of oil from Iraq in the 1990s. Bahrain also provided extensive basing and overflight clearances for a multitude of U.S. aircraft operating in support of Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF). Bahrain also deployed forces in support of Coalition operations during both OEF and OIF. Bahrain is currently offering humanitarian support and technical training to support the reconstruction of the Iraqi banking sector, and has offered support for each stage of Iraq's political transformation. Bahrain has also cooperated effectively on criminal investigation issues in support of the campaign on terrorism; the Bahrain Monetary Agency moved quickly to restrict terrorists' ability to transfer funds through Bahrain's financial system.

U.S.-BAHRAINI RELATIONS
The American Mission Hospital, affiliated with the National Evangelical Church, has operated continuously in Bahrain for more than a century. Bahrain has also been a base for U.S. naval activity in the Gulf since 1947. When Bahrain became independent, the 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 Salman Al Khalifa made a state visit to Washington. In 2001, Amir Hamad bin Isa Al-Khalifa made his first visit to the U.S. after succeeding his father in 1999. He returned to Washington on an official visit in January 2003. King Hamad made an official visit to Washington in November 2004 to meet with President Bush and cabinet-level officials.

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. Currently the headquarters of the U.S. Navy's Fifth Fleet, the U.S. designated Bahrain a Major Non-NATO Ally in October 2001.

U.S.-Bahraini economic ties have grown steadily since 1932, when Americans participated in the development of Bahrain's oil industry. Bahrain is a regional base for numerous American banks and firms. President Bush signed the U.S.-Bahrain free trade agreement (FTA) into law in January 2006.

Principal U.S. Embassy Officials
Ambassador--William T. Monroe
Deputy Chief of Mission--Susan Ziadeh
Political/Economic Officer--Steven Bondy
Economic/Commercial Officer--Stephen Simpson
Consular Officer--Sara Cobb
Public Affairs Officer--Wyn Hornbuckle
Management Officer--Raymond Kengott

The U.S. Embassy in Bahrain is located off Sheikh Isa Highway, at Building 979, Road 3119, Block 321, Zinj, Manama, Bahrain. The mailing address is P.O. Box 26431, Manama, Bahrain; tel: [973] 242-700; fax: [973] 272-594. The embassy's hours of operation outside of Ramadan are 8:00 a.m. - 4:00 p.m., Saturdays-Wednesdays.



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