Bahrain economy

Bahrain Bay (Illustration) © TheBahrain.Com

Bahrain economy


Economy
Economy

Economy

Bahrain is often considered one of the most progressive countries in the Middle East. Since independence from Britain in 1971, it has achieved astonishing growth figures, mainly as a result of large oil reserves. Bahrain’s political system has evolved into a constitutional monarchy, which was formally established in 2002 under King Hamad bin Isa al-Khalifa. The Sunni al-Khalifa clan has governed the country since the late 18th century and its members constitute the vast majority of the ruling elite, most notably in Prime Minister Khalifa bin Salman al-Khalifa. Bahrain experienced heavy turmoil as revolutions spread across the Middle East in early 2011. The wave of demonstrations on Bahrain’s streets has not resulted in the toppling of the regime but has forced it to make some concessions.

In 2010, Bahrain was ranked as number 13 in the Index of Economic Freedom, making it the freest economy in the Middle East/North Africa region. Bahrain remains a close ally to the West. In 2006, it was the first country in the Persian Gulf to sign a Free Trade Agreement (FTA) with the United States. Bahrain seeks to diversify its economy, for example by establishing itself as a world leader in Islamic finance. Still, the oil industry remains the dominant factor in the economy – about 70% of government revenues stems from petroleum production and refining.

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