Bahrain

Bahrain's identity in the region is special. Though Bahrain was the first Gulf state to discover oil and to have an-oil based economy in the 1930s, its reserves are the smallest. Consequently, Bahrain was the first GCC country to begin to diversify its economy. Bahrain’s economy remains predominantly hydrocarbon based, petroleum production and refining still account for 60% of Bahrain’s export revenues and 70% of government revenues, and unemployment (estimated at 15% in 2005) continued to be a longterm challenge.

Bahrain built an aluminum smelter in the 1970s, Alba, which was later expanded to become the largest in the world, and has developed several downstream industries, such as the manufacture of cans and venetian blinds. Bahrain also became the major financial center for the Middle East, as many of the banks and other financial institutions fled the Lebanese civil war and set up in Bahrain in the 1980s and 90s. Though it was surpassed by Dubai, and even Qatar, Bahrain remained a major center for Islamic banking. It has a strong tourism industry, especially in conference tourism, which employed close to 20% of the labor force and contributed roughly 15% to GDP. In the late 1990s, Bahrain began to open its economy and had the most liberal economic regulatory infrastructure in the USCENTCOM AOR.

Bahrain was the first state in the region to use demographic studies in economic planning and to provide extensive statistical information and make it available to private business. It was also the first Gulf regional base for scheduled airline services and has developed over the last three decades as the center for regional finance, duty-free port legislation and industrial areas. It leads the region in international trade, patents and intellectual property rights legislation, which is based on western patents laws. It was the first country in the Middle East to install a satellite communication system.

The indigenous population is 98% Muslim. Although some 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. In practice, the Sunni Muslim citizen population enjoyed favored status, and the Shia population faced discrimination. Islamic studies are a part of the curriculum in government schools and mandatory for all public school students. The Maliki school of Sunni jurisprudence forms the basis for the curriculum, which does not include the Jaafari traditions of Shia Islam.

Iran tried to fuel existing resentment over the inferior place of Shia in the social and economic structure. The government sought to moderate the socio-religious cleavage by appointing Shia to cabinet posts and senior civil service posts, although generally not in security-related positions. A failed coup d'état against the Al Khalifa in 1981 resulted in the expulsion or trial of many Shia dissidents; Iran had armed and trained most of those convicted. A number of persons were arrested in 1987 in another plot linked to Iran. In 1989 twenty-two persons were sentenced to prison by the Supreme Court of Appeal, sitting as the Security Court, for plotting to overthrow the government; no claim was made of Iranian involvement.

Beginning in February 2011, the country experienced a sustained period of unrest, including mass protests calling for political reform and some sectarian violence. Fueling Shiite unrest is the fact that Bahrain is generally poorer than most of the other Persian Gulf monarchies, in large part because Bahrain has largely run out of crude oil reserves. An emergency State of National Safety Law was implemented by royal decree under constitutional authority from March 15 to June 1. During that period, military and civilian security forces carried out extensive security operations and arrested.

Bahrain is one of the most densely populated countries in the world; 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 50% 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. The BDF and the police are run by Sunni Bahrainis, but are said to supplement their ranks with unknown percentages of paid Sunni Muslim recruits from neighboring countries, including Pakistan, Yemen, Jordan, Iraq, and elsewhere. According to passport officials, about 40,000 individuals have been naturalized over the past 50 years (about 10% of the total population).

Until relatively recently, the history of Bahrain was one of colonial domination. Annexed in the 4th century CE by the Persian Sassanid Empire and conquered in the 8th century by the Abbassids, who began a process of Islamization, Bahrain became in the early sixteenth century a major trading centre under the Portuguese, who were in turn driven out by the Persians in 1602. The period 1783 to 1820 saw a brief interlude of independence, after the al-Khalifa family evicted their colonial masters. In 1820, as a result of pressure from Britain, a treaty was signed between the two countries. This was followed by a second in 1861, which institutionalized Bahrain's status as a British protectorate.

Oil was discovered in 1931, after which followed a period of national assertion. Bahrain later joined the neighbouring Trucial States and Qatar in the Federation of Arab Emirates. 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.

When in 1971 Bahrain was granted independence, its rulers chose not to join the United Arab Emirates. Although a constitution was adopted in 1973, the newly elected National Assembly was dissolved by the al-Khalifas in 1975, accused by them of obstructing government.

The 1979 Iranian revolution was a catalyst for mobilization of the repressed Shi'a majority against the Sunni ruling class, since when the political climate has been one of unrest. Bahrain was the object of a 1981 Iranian sponsored coup, the only GCC country so threatened. In 1986 a causeway between the island and the Saudi mainland was completed, increasing both the already strong influence of Saudi Arabia on Bahraini policy and the influx of Saudi tourists, who take advantage of Bahrain's less restrictive social environment. Along its their Saudi neighbours, Bahrain participated in the US-led coalition against Saddam after the Iraqi invasion of Kuwait in 1990.

As in Saudi Arabia, the period following the war saw a rise in political and religious opposition, prompting the government to appoint a Consultative Council in place of the dissolved assembly. Reforms fell well short of protesters' demands, however, and dissidence continued, buoyed by the new power of Iraqi Shia after the fall of Saddam.