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Most of the population of Bahrain is concentrated in the two principal cities, Manama and Al Muharraq. The indigenous people--66% of the population--are from the Arabian Peninsula and Persia. The most numerous minorities are Europeans and South and East Asians.

Islam is the dominant religion. Though Shi'a Muslims make up more than two-thirds of the population, Sunni Islam is the prevailing belief held by those in the government, military, and corporate sectors. Roman Catholic and Protestant churches, as well as a tiny indigenous Jewish community, also exist in Bahrain.

Bahrain has traditionally boasted an advanced educational system. Schooling and related costs are entirely paid for by the government, and primary and secondary attendance rates are high. Bahrain also encourages institutions of higher learning, drawing on expatriate talent and the increasing pool of Bahrainis returning from abroad with advanced degrees. Bahrain University has been established for standard undergraduate and graduate study, and the College of Health Sciences--operating under the direction of the Ministry of Health--trains physicians, nurses, pharmacists, and paramedics.

Bahrain was once part of the ancient civilization of Dilmun and served as an important link in trade routes between Sumeria and the Indus Valley as long as 5,000 years ago. Since the late 18th century, Bahrain has been governed by the Al Khalifa family, which created close ties to Britain by signing the General Treaty of Peace in 1820. A binding treaty of protection, known as the Perpetual Truce of Peace and Friendship, was concluded in 1861 and further revised in 1892 and 1951. This treaty was similar to those entered into by the British Government with the other Persian Gulf principalities. It specified that the ruler could not dispose of any of his territory except to the United Kingdom and could not enter into relationships with any foreign government other than the United Kingdom without British consent. The British promised to protect Bahrain from all aggression by sea and to lend support in case of land attack.

After World War II, Bahrain became the center for British administration of treaty obligations in the lower Persian Gulf. In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain joined the other eight states (Qatar and the seven Trucial Sheikhdoms, which are now called the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. By mid-1971, however, the nine sheikhdoms still had not agreed on terms of union. Accordingly, Bahrain sought independence as a separate entity and became fully independent on August 15, 1971, as the State of Bahrain.

Bahrain is a hereditary emirate under the rule of the Al Khalifa family. The Amir, Sheikh Isa bin Sulman Al Khalifa, and his brother, Prime minister Khalifa bin Sulman Al Khalifa, govern Bahrain in consultation with a council of ministers. The government faces few judicial checks on its actions. Despite their minority status, the Sunnis predominate because the ruling family is Sunni and is supported by the armed forces, the security service, and powerful Sunni and Shi'a merchant families.

In 1973, the Amir enacted a new constitution, setting up an experimental parliamentary system and protecting individual liberties. But just two years later, in August 1975, the Amir disbanded the National Assembly. No date has been announced for the reintroduction of representative institutions, though a petition and other forms of protest have called for their return. In January 1993, the Amir appointed a 30-member Consultative Council to contribute "advice and opinion" on legislation proposed by the cabinet and, in certain cases, suggest new laws on its own. Political unrest broke out in December 1994 and included sporadic mass protests, skirmishes with local law enforcement, arson, and property attacks. In June 1995, the first Bahraini cabinet change in 20 years took place, producing mixed public response. In 1996, the Amir increased the membership of the Consultative Council to 40 and expanded its powers. The first session of the new Council began October 1, 1996.

Bahrain's six towns and cities are administered by one central municipal council, the members of which are appointed by the Amir. A complex system of courts, based on diverse legal sources including Sunni and Shi'a Sharia (religious law), tribal law, and other civil codes and regulation, was created with the help of British advisers in the early 20th century. This judiciary administers the legal code and reviews laws to ensure their constitutionality.

Amir--Sheikh Isa bin Sulman Al Khalifa
Crown Prince and Commander in Chief of Bahrain Defense Force--Sheikh Hamad bin Isa Al Khalifa
Prime Minister--Sheikh Khalifa bin Sulman Al Khalifa
Minister of Foreign Affairs--Sheikh Mohammad bin Mubarak Al Khalifa
Ambassador to the United States--Mohammed Abdul Ghaffar
Ambassador to the United Nations--Abdul Aziz Buallay

Bahrain maintains an embassy in the United States at 3502 International Drive NW, Washington, DC 20008; tel: (202) 342-0741; fax: (202) 362-2192). The Bahraini UN Mission is located at 747 3rd Avenue, New York, NY 10017; tel: (212) 751-8805.

Bahrain has a mixed economy, with government control of many basic industries, including the important oil and aluminum industries. Between 1981 and 1993, Bahrain Government expenditures increased by 64%. During that same time, government revenues continued to be largely dependent on the oil industry and increased by only 4%. The country has run a deficit in nine out of the last 10 years. Bahrain has received significant budgetary support and project grants from Saudi Arabia, Kuwait, and the United Arab Emirates.

Bahrain's small economy is basically strong, despite the budget deficits. It is so small that it suffers from virtually any change in the region or world. Privatization, which could help reduce Bahrain's deficit, is moving ahead. Utilities, banks, financial services, telecommunications, and other areas will shortly come under the control of the private sector.

The government has used its modest oil revenues to build an advanced infrastructure in transportation and telecommunications. Bahrain is a regional financial and business center. Regional tourism is also a significant source of income. Bahrain benefited from the region's economic boom in the late 1970s and 1980s. During that time, the government emphasized infrastructure development and other projects to improve the standard of living; health, education, housing, electricity, water, and roads all received attention.

Petroleum and natural gas, the only significant natural resources in Bahrain, dominate the economy and provide about 60% of budget revenues. Bahrain was the first Persian Gulf state to discover oil. 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 per day (b/d), and reserves are expected to last 10-15 years. The Bahrain Oil Company refinery was built in 1935, has a capacity of about 250,000 b/d, and was the first in the Gulf. After selling 60% of the refinery to the state-owned Bahrain National Oil Company in 1980, Caltex, a U.S. company, now owns 40%. Saudi Arabia provides most of the crude for refinery operation via pipeline. Bahrain also receives a large portion of the net output and revenues from Saudi Arabia's Abu Saafa offshore oilfield.

The Bahrain National Gas Company operates a gas liquefaction plant that utilizes gas piped directly from Bahrain's oilfields. Gas reserves should last about 50 years at present rates of consumption.

The Gulf Petrochemical Industries Company is a joint venture of the petrochemical industries of Kuwait, the Saudi Basic Industries Corporation, and the Government of Bahrain. The plant, completed in 1985, produces ammonia and methanol for export.

Bahrain's other industries include Aluminum Bahrain, which operates an aluminum smelter--the largest in the world with an annual production of about 525,000 metric tons (mt)--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 (4 million tons annually) 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 United States, have reacted by scaling back their operations or leaving the area. This decrease in business confidence was exacerbated by the Gulf war. Nevertheless, more than 100 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms. Bahrain's international airport is one of busiest in the Gulf, serving 22 carriers. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East.

Bahrain plays a modest, moderating role in regional politics and adheres to the views of the Arab League on Middle East peace and Palestinian rights. Bahrain is a member of the GCC, established on May 26, 1981 with five other Gulf states. The country has fully complied with steps taken by the GCC to coordinate economic development and defense and security planning. However, Bahrain and fellow GCC member, Qatar, continue to argue over claims to the Hawar Islands.

Because of its small size and limited wealth, Bahrain has not taken a leading role in regional or international affairs. Rather, it generally pursues a policy of close consultation with neighboring states and works to narrow areas of disagreement. During the Gulf war, Bahraini pilots flew strikes in Iraq, and the island was used as a base for military operations in the Gulf.

Since achieving independence in 1971, Bahrain has maintained friendly relations with most of its neighbors and with the world community. In December 1994, it concurred with the GCC decision to drop secondary and tertiary boycotts against Israel. In many instances, it has established special bilateral trade agreements.

Bahrain-Iran relations have been strained since the Iranian revolution and the 1981 discovery of a planned Iran-sponsored coup in Bahrain. However, with the decline of Iraq as a regional power broker, Bahrain has begun taking steps to improve relations with Iran and increase regional harmony. These efforts have included encouraging Bahrain-Iran trade, although Bahraini suspicions of Iranian involvement in local unrest appear to have slowed these steps toward improved relations.

When Bahrain became independent, the traditionally excellent U.S.-Bahrain relationship was formalized with the establishment of diplomatic relations. The U.S. embassy at Manama was opened September 21, 1971, and a resident ambassador was sent in 1974. The Bahraini embassy in Washington, DC, opened in 1977. In October 1991, Amir Isa bin Sulman Al Khalifa made a state visit to Washington, after which he visited other parts of the U.S. as well.

In 1977, the agreement establishing Bahrain as the home port for the United States Navy's Middle East Force (MIDEASTFOR) was terminated. MIDEASTFOR was subsumed into NAVCENT, a part of U.S. Central Command in Tampa, Florida. Bahrain now is host to the Navy's Fifth Fleet.

The U.S. Department of Defense-sponsored Bahrain School remains, along with a small, administrative support unit. After the Gulf war, close cooperation between the two nations helped to stabilize the region. Bahrain has expressed a willingness for cooperation with plans for joint exercises, increased U.S. naval presence in the Gulf and cooperation on security matters.

U.S.-Bahraini economic ties have grown steadily since 1932, when Americans began to help develop Bahrain's oil industry. Currently, many American banks and firms use Bahrain as a base for regional operations. In 1986, the United States displaced Japan to become the top exporter to Bahrain.

Ambassador--David Ransom
Deputy Chief of Mission--George Staples
Economic/Commercial Officer--Donald A. Roberts
Political Officer--Denise Valois
Consular Officer--Morris William Roberts
Public Affairs Officer (USIS)--John Moran
Agricultural Trade Officer--Edwin Porter (resident in Dubai, UAE)
Administrative Officer--William Blaine

The U.S. embassy in Bahrain is located off Sheikh Isa Highway, Building 979, Road 3119 (next to the Al-Ahli Sports club), Block 331, Zinj, Manama, Bahrain. The mailing address is PO Box 26431, Manama, Bahrain; tel: (973) 273300, after hours 275126; fax: (973) 272594. The embassy's hours are 8:00 a.m.-4:00 p.m., Saturdays-Wednesdays.

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U.S. Department Of State information for The State of Bahrain.

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