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Bahrain

Flag of Bahrain

Bahrain country brief

Overview

The Kingdom of Bahrain comprises an archipelago of islands with a total size of 712 sq. km (less than one third the size of the Australian Capital Territory), situated in the Persian Gulf, to the east of Saudi Arabia and west of Qatar. Bahrain also shares a maritime border with the Islamic Republic of Iran. Bahrain has a population of around 1.5 million people (2018), almost half of whom are foreign nationals (migrant workers). The majority of Bahrainis are Shi'a Muslims, while Bahrain's monarchy is Sunni.

In 1783, the Al-Khalifa family captured Bahrain from the Persians. During the 19th century, the Al-Khalifas secured their hold on the islands of Bahrain by entering into a series of treaties with the United Kingdom to make Bahrain a British protectorate. The archipelago attained its independence in 1971.

Facing declining oil reserves, Bahrain has sought to diversify its economy through developing a manufacturing industry and becoming an international banking centre. The state-owned Alba is one of the world’s largest aluminium smelters. Bahrain has also styled itself as a tourism destination and plays host to several international sporting events, including a Formula One Grand Prix. Bahrain also hosts international gatherings such as the annual Manama Dialogue (regional security forum) organised by the International Institute for Strategic Studies.

Political overview

Bahrain's Head of State is King Hamad bin Isa al-Khalifa, who acceded to the throne in 1999. The monarch appoints the Prime Minister. Bahrain has a bicameral National Assembly (al-Jamiyh al-Watani), consisting of the Shura Council (Majlis Al-Shura) and the Council of Representatives (Majlis Al-Nuwab). The 40 Shura Council representatives are appointed by the monarch. The 40 Council of Representatives members are elected by an absolute majority vote in single-member constituencies to serve four year terms. A second, run-off round is held if no candidate receives an absolute majority in the first round. Parliamentary elections were first held in 2002.

In early 2011, amid a wave of violent street clashes between mainly Shi'a protestors demanding political reform, and the police, security forces, and Sunni supporters of the government, King Hamad declared a state of emergency. The Gulf Cooperation Council (GCC) deployed forces to restore order in an operation named "Peninsula Shield".

Constitutional amendments in 2012 increased the powers of parliament. The most recent parliamentary and municipal elections were in November 2014. Large numbers of independent candidates were elected. The main Shi'a opposition party, Al-Wefaq and a group of smaller Shi'a opposition parties boycotted the elections. Al-Wefaq was subsequently disbanded by the government.

Foreign policy

Bahrain's primary foreign policy focus is on its GCC neighbours. Bahrain also plays a key role in regional security architecture. It hosts the United States Navy's Fifth Fleet and United Kingdom naval base.

In June 2018, Bahrain, with Saudi Arabia, the United Arab Emirates and Egypt, cut off diplomatic ties and implemented a blockade of Qatar. Negotiations towards a resolution have not been successful and relations with Qatar remain strained.

Bahrain is a member of the United Nations, International Monetary Fund, World Bank, World Trade Organization, GCC, League of Arab States, Organisation of Islamic Cooperation and Organization of Petroleum Exporting Countries.

Bilateral relations

The Australia-Bahrain relationship is long-standing and based on trade. It predates the establishment of formal ties with other Gulf countries. Australia maintained a Consulate-General in Bahrain from 1964 until 1986. The Bahraini Embassy in Jakarta is accredited to Australia; our Embassy in Riyadh is accredited to Bahrain. Bahrain provides port access to Australian naval ships.

Economic overview

Facing declining oil reserves, Bahrain has invested strongly in communications and transport infrastructure, and worked to attract multinational businesses. It has achieved some diversification, but oil revenue remains 85 per cent of government revenue and 10 per cent of GDP. Low oil prices, most recently during COVID-19, place pressure on the national budget.

Aluminium is Bahrain's second biggest export after oil. Aluminium Bahrain (Alba), one of the world's largest smelters, plans to expand production. Bahrain continues to seek new natural gas supplies as feedstock to support its petrochemical and aluminium industries. In response to fiscal pressures from the effect of low oil prices, the government is gradually lifting the price of gas supplies to industry.

Other major economic activities are finance including Islamic banking, construction and tourism.

As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. Subsequent to this FTA being signed the GCC decided to negotiate FTAs as an economic group.

Trade and investment

Australia and Bahrain have had a commercial relationship for many years. In 2018-19, our merchandise exports were worth $1.43 billion. Australia's exports mainly comprised alumina, meat, motor vehicles, dairy products and wheat.

There are opportunities for Australian business to assist Bahrain in developing arable land, improving productivity and optimising water resources.

High level visits

  • December 2016: Australian Special Envoy for Human Rights.
  • April 2014: Minister for Agriculture visited Bahrain with industry delegation.

Updated July 2020.

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