Bahrain: System
Essentials Chapter 3: Persian Gulf, Arabian Peninsula
Bahrain: System
Essentials
Agriculture
/ Oil and Gas / Other Industries
/ Finance
Overview
/ Leadership / Infrastructure
/ Population / Fielded Forces
/ Table of Contents
The oil and gas sector dominate Bahrain's economy
Including fishing, agriculture accounts for less than 2% of Bahrain's GDP. Bahrain is not self-sufficient in food production; her heavily subsidized sector produces fruit, vegetables, poultry, dairy products, shrimp, and fish.
Petroleum and natural gas, the only significant natural resources in Bahrain, dominate the economy and provide about 60% of budget revenues. Bahrain was one of the first Persian Gulf States to discover oil and was the first with a refinery. Because of limited reserves, Bahrain has worked to diversify its economy over the past decade. Bahrain has stabilized its oil production at about 40,000 barrels of oil per day and reserves are expected to last 10-15 years.
The Bahrain National Gas Company operates a gas liquefaction plant that utilizes gas piped from Bahrain's oil fields. Gas reserves should last about 50 years at present rates of consumption.
Bahrain's other industries include Aluminum Bahrain, which operates an aluminum smelter, and related factories such as the Aluminum Extrusion Company and the Gulf Aluminum rolling Mill. Other plants include the Arab Iron and Steel Company's iron ore pelletizing plant and a shipbuilding and repair yard.
Bahrain's development as a major financial center has been the most widely heralded aspect of its diversification effort. In 1973, the Bahraini Monetary Agency was formed to provide oversight for the banking and financial sector. Since 1983, the regional economic climate in which these institutions operate has become less favorable because of the region's economic downturn. Banks, including some from the U.S., have reacted by scaling back their operations in the area. This decrease was exacerbated by the Gulf War. Nonetheless, more than 100 offshore banking units and representative offices are located in Bahrain.