The strategic geographical location of Bahrain in the centre of the Persian / Arabian Gulf has confronted civilisations for over 6,000 years seeking for better trading routes. Bahrain, –“two seas” in Arabic- was known as Dilmum by the Sumerian or Tylos by the Greeks. Sumerians, Assyrians and later Portuguese, Persians and British used the islands as a centre of trade and an important hub of the commerce between India and the Arab region. It was also well known for its buoyant pearling industry that influenced further trade. It is precisely the historic influence of traders in Bahrain what has shaped the personality of Bahrainis, known for their hospitality, trading skills and cosmopolitanism compared to its neighbours. The country was controlled by Portugal during the 16th century and intermittently by the Persians during the 17th and 18th Century.
The arrival of Al Khalifa
The current ruling family of Bahrain, the Al-Khalifa arrived at Bahrain around the beginning of the XIX Century. They expelled the Persians and took over the country. One hundred years later, pressure from constant invasions led the Al Khalifa tribe to sign a treaty with Great Britain and in 1861 Bahrain became a protectorate of the British Empire. After over one century of British domination Bahrain became an independent country in 1971. It joined the United Nations and other international organisations including the Arab League. During the protectorate Bahrain culture flourished and local trading families started prosperous business that contributed to the creation of some of the biggest family conglomerates that have continued to grow and operate until today.
The Discovery of Oil
Under the British rule Bahrain, historically ahead of the region in many respects, also the first public university for boys in 1919 and for girls ten years later. It was the first country in the region to discover oil in 1932 and to build a refinery, which is currently undergoing a massive overhaul. The country benefited greatly from the 70´s oil boom but early realised of its limited and declining hydrocarbons reserves. A policy towards diversification of the economy was set to move away the country’s economic dependence on oil turning it into petroleum processing and refining. It set the beginning of the industrialisation process of Bahrain. Following its diversification efforts, Bahrain also turned itself into the financial hub of the Arab World snatching the top spot from Beirut which had been the financial centre of the region but had succumbed during its prolonged civil war throughout the 70s and 80s. Financial services contribute today to a large part of Bahrain’s GDP. Competition in the region is increasing rapidly with financial centres growing in most of the countries of the Gulf and some as Dubai, presenting serious threats.
Bahrain has effectively orchestrated major achievements in its history given the small size of its territory and its insignificance related to big neighbours like Saudi Arabia, the world’s number one oil exporter and a country as big as the five largest countries of the EU together with a population of 27 million people. Thus, diplomacy in an archipelago of hardly 1,3 million people but located strategically in the heart of the Persian/Arabian Gulf has been the key element in its foreign relations over the years.
Bahrain becomes a British Protectorate
Establishment of a formal government structure and bureaucracy
Bahrain Petroleum Company (BAPCO) starts operations under the commands of the Standard Oil Company of California
Discovery of Oil
BAPCO starts operations of its first refinery, also the first built in the Gulf
Sheikh Isa bin Salman al Khalifa becomes the new Emir of Bahrain.
Bahrain becomes an independent country from Britain.
Aluminium Bahrain (ALBA), the largest aluminium smelter of the region, started operations.
Emir enacts a new constitution
The Emir revokes the Constitution approved only two years before.
Bahrain acts as a founding member of the Gulf Cooperation Council (GCC).
The Saudi - Bahrain causeway was inaugurated linking the island to the continent.
Bahrain joins forces to defend Kuwait during the Gulf war
A series of demonstrations demanding social and political reforms swept the country.
H.M. King Hamad bin Isa Al Khalifa became King of Bahrain and set in motion what became a decade of reforms in the Kingdom
National Action Charter published, setting out the key principles for the government of
· the establishment of a constitutional monarchy
· parliamentary elections
· universal suffrage for men and women
National Action Charter was ratified by a national, popular referendum with 98.4 percent of voters in favour
The Supreme Council for Women was established
The EDB was established under the chairmanship of HRH Prince Salman bin Hamad Al Khalifa, the Crown Prince
Liberalisation of the telecommunications sector and establishment of the Telecommunications Regulatory Authority (TRA)
On the diversification road
Ahead of its neighbours the first aluminium smelter of the region, ALBA (Aluminium Bahrain) started operations in 1971 to become over the years one of the largest aluminium smelters of the world. The creation of ALBA prompted the birth and growth of a new range of industries that used aluminium as feedstock. Sideline, the petrochemical industry was booming together with the port facilities of Bahrain, especially the ship repairing industry. Location has also favoured the expansion of the country into logistics leveraging the island natural conditions.
In 1981 Bahrain became a founding member of the Gulf Cooperation Council (GCC) and in 2006 the Bahrain-USA Free Trade Agreement (FTA) entered into force with Bahrain becoming the first country in the GCC in doing so.
In 1986 a bridge changed dramatically the island’s potential when the Bahraini-Saudi causeway was inaugurated opening a new world of opportunities. The 25 kilometres causeway is the only link of Bahrain to mainland and connects the island with the oil-rich Eastern region of Saudi Arabia, the biggest market of the Arab world.
In 1994 a series of demonstrations demanding an increase in democracy and greater social reforms swept the country. The sectarian division of the population between the ruling minority, the Sunnis, and the rest two thirds of the population, the Shiites, emerged and continued until 1999 when the Emir of Bahrain, Sheikh Isa bin Salman al-Khalifa, died after almost 40 years in power. His son Sheikh Hamad bin Isa al-Khalifa inherited the conflict but soon promoted a series of reforms that included an amnesty to political prisoners and the return of the exile. The 14th of February of 2001, 98 percent of Bahrainis voted “yes” to the National Action Chapter, which proclaimed Bahrain as a Constitutional Monarchy. In 2002 the King promulgated a new Constitution. The first constitution of Bahrain was approved in 1973 just after independence from Great Britain and revoked by the Emir only two years later. The new Constitution provided the establishment of a bicameral parliament with an upper house (Shura Council) composed of 40 members appointed directly by the king and a lower house (Council of representatives) composed of the same number of members and elected through universal suffrage. Parliamentary elections in 2002 were boycotted by the opposition composed primarily by Shiites that did not agree with the creation of an upper house in Parliament. The final results showed that 50 percent of the voters of Bahrain elected a parliament with a leading Sunni majority and a Shiite-led minority opposition. Parliamentary elections in 2006 and 2010 showed similar results with the Shiite-led opposition failing to secure a majority. In 2008 Bahrain released a roadmap of the reforms and developments needed in the country towards 2030 to improve the economy and living standards of its people: The Economic Vision 2030. The strategy included further need of diversification, greater role of the private sector and the need of infrastructure developments.
The Arab Spring that erupted in Tunisia in 2011 and spread all over the region hit Bahrain harder than any other country in the region. Young Bahrainis took the streets demanding a better distribution of wealth and a greater participation of the Shiite population majority in strategic government positions. The escalation of the protests was translated into a brutalisation of the repression and the arrival of Saudi troops. Bahrain is also the host country of the US Navy’s Fifth Fleet. Following the government crackdown, the Al Wefaq Party, the biggest opposition party, withdraw from its 18 parliamentary seats. A special election was held in 2011 to cover the empty seats that were finally replaced by Independents.
The government of Bahrain claims that protests in the country are supported by nearby Iran which is interfering in the country´s internal politics and futher sectarisation.
The repression to the uprisings led to the National Dialogue, a round of negotiations between the different factions. The Al-Khalifa government was represented by Crown Prince Salman bin Hamad bin Isa Al Khalifa. The Bahrain Independent Commission of Inquiry (BICI) was also launched by the King to investigate the police behaviour and brutality during the confrontations in order to distil responsibilities.
Despite all efforts, the opposition claims reforms are still too vein and are taking too long to be implemented. Uprisings continue although limited and scattered over the villages. The political crisis and the global financial turndown have had an important impact in Bahrain’s economy that nevertheless has started to recover in 2013 with the expansion of its industry and a number of infrastructure projects coming on line. Politically, an imminent solution seems impossible to reach while demands of the sides seem to be irreconcilable.
Bahrain Tender Board established to ensure transparency, fairness and equal opportunity across all public sector and government transactions
Appointment of the first woman government minister - Dr Nada Haffadh, as Health Minister
Bahrain launched a programme of labour market reforms, including the creation of the
Labour Market Regulatory Authority (LMRA) and Tamkeen, Bahrain’s independent authority, which formulates strategic and operational plans to invest in Bahraini employability (formerly the Labour Fund)
Free Trade Agreement with the USA was signed
A programme of education and training reforms launched leading to the creation of the
Bahrain Polytechnic, the Quality Assurance Agency (QAA) and Bahrain Teachers College
Shura Council member Alice Samaan became the first woman to chair a parliamentary
session in the Arab world
Bahrain became the first country in the Middle East to introduce smart cards
Establishment of a single, independent regulator of the financial system, the Central
Bank of Bahrain (CBB)
The Bahrain Mumtalakat Holding Company (Mumtalakat) was established.
H.M. King Hamad launched Bahrain’s Vision 2030 and the National Economic Strategy (NES)
United Nations Development Programme (UNDP) ranked Bahrain fourth of 155 countries worldwide for its efforts in building the capabilities of women
Bahrain became the first Gulf state to allow foreign workers to move freely between jobs without the consent of their previous employer
The National Health Regulatory Authority (NHRA) established
The $360m Khalifa Bin Salman Port (KBSP) started operations
His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa was presented with the Millennium Development Goals award in recognition of his crucial role in engineering Bahrain’s development prowess. This is the Premier’s third top UN honour – already winner of the UN-Habitat Scroll of Honour and the UNESCO Avicenna Gold Medal in recognition of his efforts to promote heritage and culture
The Salman Industrial City opened, encompassing several key infrastructure projects in the Hidd area such as the Bahrain International Investment Park (BIIP), Bahrain Investment Wharf (BIW) and Hidd industrial Zone
National Dialogue was carried out following a period of unrest. The dialogue concluded with several recommendations on the economic front, including the importance of further diversifying the economy, encouraging the role of the private sector, the potential for redirecting subsidies, the potential for levying indirect taxes and corporate taxes, resolving the issue of high growth of guest workers, supporting innovation programmes
The Royal Bahrain Hospital was inaugurated by the Minister of Health, His Excellency, Sadiq Al-Shehabi
The Government issued its second interim report on the implementation of the recommendations put forward by the Bahrain Independent Commission of Inquiry (BICI) on November 21st 2012. Implementation so far has included:
· Wide and deep reform of the security forces, incorporating human rights and legal training for officers, led by international policing experts, John Timoney I and John Yates and the creation of an Independent Ombudsman
· The establishment of a fully independent National Human Rights Institution, run in line with the Paris Principles, alongside access for the International Committee of the Red Cross to detention centres. Review and reform of key laws, including those on freedom of speech, and the creation of a Special Investigations Unit to determine government accountability regarding key issues of concern
The annual Index of Economic Freedom, published by The Heritage Foundation and the
Wall Street Journal, again ranked Bahrain the MENA region’s most economically free country, ranked 1st out of 15 countries
The National Dialogue entered its second phase with the aim of bringing together the various segments of
Bahraini society to further reform in the country and to reach a consensus between all participants.
Bahrain became one of only three countries to receive a UN e-Government special award for making significant progress in improving its e-service and strengthening its service delivery through e-participation
Former US President Bill Clinton stresses the pivotal role of His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Chairman of the EDB, in promoting Bahrain as a key centre for balanced economic openness. Speaking at the Clinton Global Initiative, he also hailed Bahrain’s economic achievements
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
Stay tuned - Stay Ahead
Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession. Bahrain is a small island in the Arabian Gulf with an incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain. Banagas, Nass Corporation, BBK and DHL were GGC strategic partners in the development of the series among others.
FindMe in Bahrain is available at the local bookstores Jashamal and online as well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.
FindMe in Saudi offers a multi-faceted overview combining business and leisure, economy and heritage. The book aims to capture the current development of Saudi Arabia in the words of the people who live and work there. It is an authoritative source of information for investors, businessmen and travellers produced to firmly position KSA as an attractive investment destination.
In contains general information about the country´ economic performance and who is who as a sectorial overview and a leisure guide.
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