Editing Economy of Bahrain (section)

== Diversification ==
Though [http://earthtrends.wri.org/text/economics-business/variable-638.html Current GDP per capita] {{Webarchive|url=https://web.archive.org/web/20120504135206/http://earthtrends.wri.org/text/economics-business/variable-638.html |date=2012-05-04 }} shrank by 2.4% in the 1980s, it bounced back to a growth of 36% in the 1990s as a result of successful diversification initiatives.  Bahrain's urgency in embracing economic liberalisation is due to its need to diversify the economy away from its limited oil supplies. Unlike its Persian Gulf neighbours, Bahrain has little oil wealth and the economy has expanded into [[banking]], heavy industries, [[retail]] and [[Tourism in Bahrain|tourism]]. The Kingdom is the main banking hub for the [[Persian Gulf]] and a centre for Islamic finance, which has been attracted by the strong regulatory framework for the industry. According to the [[International Monetary Fund]]'s Financial System Stability Assessment of Bahrain's financial regulatory environment, published on 6 March 2006, found:

* The financial system is enjoying strong performance under favorable circumstances, and is likely to remain a major contributor to overall growth. The main risk stems from potential overheating in the economies of the region, but the system should be resilient to likely shocks.
* Prudential regulations are modern and comprehensive, and supervision is generally effective, especially in the dominant banking sector. Supervisory capacity needs to be expanded in line with new regulations and to keep up with the growth and increasing sophistication of financial institutions.
* The further expansion of the Islamic sector, the development of housing finance, and the deepening of securities markets are important for the future growth of the financial system. The banking and insurance sectors will eventually undergo consolidation. [http://www.imf.org/external/pubs/ft/scr/2006/cr0691.pdf]

In 2005, Bahrain signed the [[US-Bahrain Free Trade Agreement]], becoming the first Persian Gulf state to sign such a bilateral [[trade agreement]] with the [[United States]]. A massive privatization programme is underway to sell off key government assets: utilities, banks, financial services, and [[telecommunications]] have started to come under the control of the private sector.

As a result, the economy has been well positioned to exploit the extra revenues generated in the region thanks to the sustained high oil prices since 2002. In January 2006, the [[United Nations Economic and Social Commission for Western Asia]] cited Bahrain as the [https://www.tradearabia.com/news/TTN_99455.html fastest growing economy] in the Arab world.

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%.  Bahrain has at times received significant budgetary support and project grants from [[Saudi Arabia]], [[Kuwait]] and the [[United Arab Emirates]].

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. [[Tourism in Bahrain|Tourism]], especially from the region, has proved another significant source of income.

Bahrain has benefited from the oil boom since 2001, with economic growth of 5.5%. It has succeeded in attracting investment from other Persian Gulf states partly because it used the revenues of the 1970s-early 80s boom to invest in infrastructure development and other projects to improve the standard of living; health, education, housing, [[electricity]], water, and roads all received attention.

The success of ventures such as the [[Bahrain Grand Prix]] has raised the Kingdom's international profile, and combined with the boom in [[Islamic banking]], has encouraged major airlines to resume services to the country, with [[Lufthansa]] announcing on 14 March 2006 that it would schedule [http://www.gulf-daily-news.com/Story.asp?Article=138106&Sn=BNEW&IssueID=28360  three flights a week to Muharraq from Frankfurt] {{Webarchive|url=https://web.archive.org/web/20071011203959/http://www.gulf-daily-news.com/Story.asp?Article=138106&Sn=BNEW&IssueID=28360 |date=2007-10-11 }}.

As part of its efforts to build a modern economy, Bahrain has initiated a series of labour reforms under Minister of Labour [[Majeed Al Alawi]] in order to bring the labour market into line with international standards. Bahrain intends to expand its high tech industries, invest in research and development, and strengthen its competitive edge within a global economy. In 2006,it was announced that the Bahrain Science and Technology Park,a Kuwait Finance House Bahrain initiative would be a reflection of this effort to create a diversified economy, provide high quality jobs for locals and international workforce, providing a place for innovative and inventive thinking that will have direct benefits to the island nation.

In 2009 it was announced that the Bahraini Government would be developing land next door to the [[Bahrain International Circuit]]. The project being managed by @Bahrain is a mix of facilities including an exhibition and convention facility, a choice of hotel accommodations ranging from mid-market to luxury, a multi-purpose indoor arena, an automotive club and engineering facility, retail and leisure establishments, a tech-tainment (technology interacting with entertainment) centre, a research institute, a technology park and a focus on education and training. @Bahrain is part of the Mumtalakat group of companies and will dedicate  more than 1 million square meters of business, entertainment and educational space with a value in excess of $2bn (BD 850 million), making it one of the largest investment projects to take place in Bahrain in the past five years.<ref>{{cite web|url=http://gulf-daily-news.com/NewsDetails.aspx?storyid=248950|title=Gulf Daily News » Business News » Jobs 'for generations to come'|access-date=3 March 2015}}</ref>

In July 2023, Bahrain's national origin exports decreased by 23%, valued at BD323 million, while imports fell by 6% to BD441 million, resulting in a trade deficit of BD68 million, according to the Information & eGovernment Authority (iGA) report.<ref>{{Cite news  |date=2023-08-25 |title= Bahrain-origin exports dip 23% to $848mln in July |language=en |work=Zawya |url= https://www.zawya.com/en/economy/gcc/bahrain-origin-exports-dip-23-to-848mln-in-july-uru6pgek  |access-date=2023-08-31}}</ref>

Overall during 2023, Bahrain's GDP grew by 2.45%, with the non-oil sector showing a robust increase of 4.48%, indicating the country's successful efforts towards economic diversification.<ref>{{Cite web |date=2023-12-26 |title=Bahrain's Economy Records 2.45% Growth in Q3 2023 |url=https://www.gulf-insider.com/bahrains-economy-records-2-45-growth-in-q3-2023/ |access-date=2024-04-10 |website=Gulf Insider |language=en-US}}</ref> The Bahrain Economic Development Board played a crucial role in enhancing Bahrain's investment climate, actively facilitating the entry of international investors and expanding the sectors open to 100% foreign ownership, including significant initiatives in the oil and gas sectors under certain conditions.<ref>{{Cite web |title=Bahrain's development plans facilitate economic diversification |date=17 July 2023 |url=https://oxfordbusinessgroup.com/reports/bahrain/2023-report/economy/sustainable-growth-medium-and-long-term-development-plans-implemented-to-guide-efforts-to-facilitate-economic-diversification-overview/}}</ref>