Nation at a Glance - Bahrain

History

In 1783, the Sunni Al-Khalifa family took power in Bahrain. In order to secure these holdings, it entered into a series of treaties with the UK during the 19th century that made Bahrain a British protectorate. The archipelago attained its independence in 1971. A steady decline in oil production and reserves since 1970 prompted Bahrain to take steps to diversify its economy, in the process developing successful petroleum processing and refining, aluminum production, and hospitality and retail sectors, and also to become a leading regional banking center, especially with respect to Islamic finance. Bahrain's small size and central location among Gulf countries require it to play a delicate balancing act in foreign affairs among its larger neighbors.The Sunni-led government has long struggled to manage relations with its large Shia-majority population. In early 2011, amid Arab uprisings elsewhere in the region, the Bahraini Government confronted similar pro-democracy and reform protests at home with police and military action, including deploying Gulf Cooperation Council security forces to Bahrain. Political talks throughout 2014 between the government and opposition and loyalist political groups failed to reach an agreement, prompting opposition political societies to boycott parliamentary and municipal council elections in late 2014. Ongoing dissatisfaction with the political status quo continues to factor into sporadic clashes between demonstrators and security forces.

Location: Middle East, archipelago in the Persian Gulf, east of Saudi Arabia

Border Countries: 0 km

Total Area: 760 sq km Land: 760 sq km Water: 0 sq km

Climate: Arid; mild, pleasant winters; very hot, humid summers

Terrain: Mostly low desert plain rising gently to low central escarpment

Natural resources: Oil, associated and nonassociated natural gas, fish, pearls

Land use: Agricultural land: 11.3%arable land 2.1%; permanent crops 3.9%; permanent pasture 5.3% Forest: 0.7% Other: 88% (2011 est.)

Ethnic groups: Bahraini 46%, Asian 45.5%, other Arab 4.7%, African 1.6%, European 1%, Other 1.2% (includes Gulf Co-operative country nationals, North and South Americans, and Oceanians) (2010 est.)

Languages: Arabic (official), English, Farsi, Urdu

Religions: Muslim 70.3%, Christian 14.5%, Hindu 9.8%, Buddhist 2.5%, Jewish 0.6%, Folk religion <.1, Unaffiliated 1.9%, Other 0.2% (2010 est.)

Population: 1,378,904 (July 2016 est.)

Literacy: 95.7%; Male: 96.9%; Female: 93.5% (2015 est.)

Administrative divisions: 4 governorates (muhafazat, singular - muhafazah); Asimah (Capital), Janubiyah (Southern), Muharraq, Shamaliyah (Northern)

Economy: Low oil prices have generated a budget deficit of at least a $3.5 billion deficit in 2017, nearly 10% of GDP. Bahrain has few options for covering this deficit, with low foreign assets and fewer oil resources compared to its GCC neighbors. In 2016 the three major US credit agencies downgraded Bahrain’s sovereign debt rating to “junk” status, citing persistently low oil prices and the government’s high debt levels. Nevertheless, Bahrain in 2017 was able to raise about $4 billion by issuing international debt. Oil comprises 85% of Bahraini budget revenues, despite past efforts to diversify its economy, build communication and transport facilities for multinational firms with business in the Gulf, and expand infrastructure development. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. It plans to introduce a Value Added Tax (VAT) by the end of 2018. Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. In April 2018 Bahrain announced it had found a significant oil field off the country’s west coast, but is still assessing how much of the oil can be extracted profitably. In 2011, Bahrain experienced economic setbacks as a result of domestic unrest driven by the majority Shia population; however, the economy recovered in 2012-15, partly as a result of improved tourism. In addition to addressing its current fiscal woes, Bahraini authorities face the long-term challenge of boosting Bahrain’s regional competitiveness — especially regarding industry, finance, and tourism — and reconciling revenue constraints with popular pressure to maintain generous state subsidies and a large public sector. Since 2015, the government lifted subsidies on meat, diesel, kerosene, and gasoline and has begun to phase in higher prices for electricity and water.

Agriculture - products: Fruit, vegetables; poultry, dairy products; shrimp, fish

Industries: Petroleum processing and refining, aluminum smelting, iron pelletization, fertilizers, Islamic and offshore banking, insurance, ship repairing, tourism