Dr. Hassan Abdulla Fakhro Minister of Industry and Commerce

eing first has its advantages. In Bahrain, it has almost always coincided with a new era for the economy

In the 1930s, Bahrain was the first country in the Gulf region to discover oil, and this discovery reshaped its economic landscape. Basically a merchant nation up until then, deriving the majority of its income from transit trade and pearl trading, oil was to eclipse all else in the country’s economic sphere. Although a government report in 1964 indicated that a third of the goods imported into the country were subsequently re-exported, a sign that the country’s latent trading sense was still alive and well, oil that same year accounted for more than 65% of public revenues.

This was not necessarily a bad thing, according to Minister of Industry & Commerce Dr. Hassan Abdulla Fakhro. He says that the government recognized at a very early stage that proven reserves were limited. Consequently, higher public revenues in Bahrain meant greater investment in infrastructure and human resource development.

The oil industry also provided employment and indirectly paved the way for the growth of the modern day serviced-based economy by allowing for the organic development of indigenous businesses, which provided services ranging from banking and insurance to engineering to oil companies. Oil also provided the energy for industrial development; crude oil and gas were used for manufacturing petroleum bi-products as well as for powering heavy industries such as iron and steel.

In short, economic diversification in Bahrain started nearly 30 years ago – and was strengthened by a 1975 commercial law that set the scene for the growth of commerce and the creation of the financial sector.

In 1993, Bahrain, along with Kuwait, set another first. They became founding members of the World Trade Organization – the first among Gulf states to do so. This launched another new era in Bahrain’s economic history, in which the private sector became a driving force in development.

In 2006, the country established another first when it signed a Free Trade Agreement (FTA) with the U.S. before any of its regional counterparts. This will undoubtedly, if past history is anything to go by, launch another and new successful stage in the country’s economy.

“Bahrain adopted an open-market policy as a economic development strategy, and it is for this reason that the FTA was negotiated. It provides access to the U.S. for Bahraini manufacturers and service providers, and encourages new inward investment both from U.S. enterprises wishing to take advantage of the provisions of national treatment and investors who want to export products from Bahrain to the U.S. market. In a sense, the FTA will allow Bahrain the opportunity of regaining its entrepôt status, which was a feature of its early economics,” says Dr. Fakhro.