Bahrain

Bahrain became a British protectorate, after the Al Khalifa family had taken Bahrain from the Persians in 1782, and had created treaties with the UK in hopes of protecting Bahrain; Bahrain became sovereign in 1971. With its petroleum processing and refining industry, and despite low oil reserves, Bahrain has become an international banking center. Al Wifaq won the majority of the seats in the legislature in the 2006 parliamentary and municipal elections; Al Wifaq is the largest Shi’a political group. Nonetheless, street demonstrations expressing Shi’a discontent have returned. Bahrain is led by King HAMAD bin Isa Al Khalifa, who assumed power in 1999.

Main Airports

Bahrain International (BAH)

U.S. Embassy

Sheikh Isa Highway, at Building 979, Road 3119, Block 321, Zinj, Manama, Bahrain
tel: [973] 242-700

Statistics

GDP: purchasing power parity:

$15.83 billion (2005 est.)

GDP - real growth rate:

5.9% (2005 est.)

GDP - per capita: purchasing power parity:

23,000 (2005 est.)

Inflation rate (consumer prices):

2.7% (2005 est.)

Labor force:

380,000
note: 44% of the population in the 15-64 age group is non-national (2005 est.)

Exports:

$11.17 billion (2005 est.)

Exports - partners:

Saudi Arabia 3%, US 2.5%, UAE 2.2% (2005)

Imports:

$7.83 billion (2005 est.)

Imports - partners:

Saudi Arabia 36.5%, Japan 6.6%, Germany 6.4%, US 5.4%, UK 5%, UAE 4.1% (2005)

Population:

698,585

Population growth rate:

1.45% (2006 est.)

Population Below Poverty Line:

NA%

Major Industries:

petroleum processing and refining, aluminum smelting, iron pelletization, fertilizers, offshore banking, insurance, ship repairing, tourism

Employing Workers: *

Registering Property: *

Enforcing Contracts: *

Closing a Business: *

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator

Bahrain

Region

Bahrain Risk Assessment

Country Rating

Rating: A3

Changes in generally good but somewhat volatile political and economic environment can affect corporate payment behaviour. A basically secure business environment can nonetheless give rise to occasional difficulties for companies. Corporate default probability is quite acceptable on average.

Risk Assessment

A dynamic non-oil sector was the main economic driver in 2007, growing at a good clip (up an estimated seven per cent), but nonetheless not as rapid as the expansion over the past two years, which was underpinned by the start-up of a fifth aluminium smelter by the state-owned Alba company. The sector benefited from a highly liquid economy and the regional boom spurred by high barrel prices, which fostered household consumption and public and private investment. The financial sector and construction continued to outperform. After their good performance in 2006, services associated with tourism continued to trend up. In the hydrocarbon sector, meanwhile, oil production stopped declining and a five per cent increase in gas production resulted in positive growth estimated at 0.5 per cent for the sector while the overall economy grew an estimated 6.3 per cent last year. In a still-buoyant regional context, the six-per cent economic growth should be maintained in 2008. In view of the investment dynamic in the region, financial services will remain buoyant as will construction, stimulated by the implementation of many industrial, property, and infrastructure projects. The privatisation programme and the gradual liberalisation of public services have attracted foreign investment.

Buoyed by the barrel prices, the external financial situation has been healthy with a liquidity crisis relatively unlikely. Despite the growth of imports fuelled by the stronger domestic demand and the rising cost of the products imported, especially oil, external accounts have shown large surpluses allowing the country to accumulate foreign assets. Thanks to the oil revenues, the government has enjoyed room to manoeuvre to develop infrastructure and invest in the education and health sectors. Despite the regional geopolitical tensions and a shaky social climate, the business climate has been good, underpinned by the opportunities available to investors and by the regional dynamic.

STRENGTHS

• As the leading financial centre in the region, Bahrain has nonetheless been contending with growing regional competition.
• The economy is open and diversified (hydrocarbons, aluminium, financial services and tourism).
• Government officials have pursued dynamic policy to foster investment.
• Maintaining good relations with the United States, the kingdom hosts the fifth fleet and the two countries have concluded a free-trade agreement.

• The decline of oil production is worrying, with the economy remaining very dependent on oil revenues and its industry energy intensive.
• The disparities in living standards and institutional representation between the ruling Sunnite minority and the Shiite majority in the country have been recurring sources of tension.
• Unemployment has remained high among the local population with the Bahrainisation of jobs being a slow process in view of its potential effect on corporate competitiveness.

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• Automobile
• Bags, Cases & Boxes
• Chemicals
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• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
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• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation