Bahrain's Economy and Economic Development

However, Bahrain's petroleum reserves atomic number 18 dwindling and the country has made great progress in developing its banking and financial services sector as a means of diversifying. The lack of oil for exporting means the g overning has recognized the need to launch a costly curriculum of capital enthronisation in order to diversify its economy. With mention to frugal performance, GDP in Bahrain was 4.1% in 2001 in similitude to 5.3 percent in 2000 and 4.3 percent in 1999, (Overview, 2002). Bahrain uses a pegged currency, the dinar (BD.376/U.S. Dollar), which is rigidly controlled and historically very sound.

While consumer price lump is very low, below one percent since 1995, pomposity as gauged by the GDP deflator is a lot higher. In 2000, inflation was 14 percent due to oil prices mandating sharp increase in the current value of GDP output (Overview, 2002). Unemployment mud a major source of social tension. While official estimates put the unemployment rate at just under six percent, analysts estimate it may be much higher in the 30 percent range in disenfranchised populations similar the Shiites (Overview, 2002). During the 1990s the country experienced a high direct of social unrest as the Shiite's demanded parliament be restored.

disdain Bahrain's declining oil reserves, petroleum revenues still make up over 25 percent of GDP (Overview, 2002). Stability in the theatrical role was threatened by the dispute between Bahrain and Qatar over ownership of the Hawar Island

It is to this end that Bahraini economic leaders make water been strengthening economic cooperation with Japan. Economic victimization Bahrain (EDB) has pursued a six-fold strategy to attract Japanese investors. virtuoso of these strategies is changing the image of Bahrain and its economy from being closed to be open, diversified, and liberal. Bahrain promotes the fact that of all the oil-dependent economies in the Gulf Cooperation Council (GCC) states it is the least dependent.

Japan-Bahrain avocation stood at approximately $400 million in 2001, and as economic analyst Titus Filio writes, "Bahrain's economic development authorities have continuously worked to strengthen Bahrain-Japan economic relations to increase sentiency of the investment environment in the Kingdom among Japanese investors" (EDB, 2002, 1).

Since Bahrain is rivulet out of oil and increasing its reliance on gas, the giving medication must continue to enact reforms aimed at generating capital investment as the economy makes a transition from reliance on petroleum to others sectors such(prenominal) as financial services, aluminum, tourism and others. further efforts lead need enacted to continue to attract foreign investment, such as improving cooperation and stability in the region and cut corruption by instituting real forms aimed at curbing practices that back up it. Increased expansion of the financial services sector give boost economic growth when coupled with anti-corruption policies. Bahrain must besides continue to minimize social unrest by chronic to democratize its political institutions and markets. While King Hamad is committed to the constitutive(a) monarchy which has won praise from President Bush, fundamentalist powers in Bahrain guard tight control over protest. As Hamad recently stated, "Bahrain will remain an open society in which dissenting opinions ar accepted as long as the opposition be committed to this land and 100 percent faithful to Bahrain" (King, 2002, 1). This investigate demon
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