Bahrain Industry Sectors

Bahrain, like many other Gulf States has historically relied on oil as its primary source of income. However, with Bahrain’s oil reserves forecasted to run dry within the next 10 to 15 years, the Bahraini government identified its need to diversify its economy and reduce its dependence on oil.

Since the 1960s, the Kingdom of Bahrain embarked on an economic diversification programme – through the promotion of other natural resources such as natural gas, and attracted foreign investments and industries; including the aluminum industry.

Bahrain, like many other Gulf States has historically relied on oil as its primary source of income. However, with Bahrain’s oil reserves forecasted to run dry within the next 10 to 15 years, the Bahraini government identified its need to diversify its economy and reduce its dependence on oil.

Since the 1960s, the Kingdom of Bahrain embarked on an economic diversification programme – through the promotion of other natural resources such as natural gas, and attracted foreign investments and industries; including the aluminum industry.

Today, the services sector, particularly finance and tourism, have been key drivers for Bahrain’s economy – and an important facet in its economic diversification.

An agriculture industry in Bahrain is virtually non-existent; contributing only 0.5 percent to GDP. This is not surprising taking into account Bahrain’s geography; where water to make land arable is scarce and soil bears high salinity levels making crops hard to grow.

Bahrain Industry Sectors: Heavy Industries

Bahrain’s heavy industries include petroleum processing and refining, aluminium smelting, iron pelletization, fertilizers and ship repairing.

Heavy industries and services remain the backbone of Bahrain’s economy, making up 58 percent and 41.5 percent of Bahrain’s GDP respectively in 2010.

There has also been increasing signs of the government’s attempt to diversify Bahrain’s economy and reduce dependence on oil. According to statistics, Bahrain’s oil production has gradually decreased from 48,610 barrels/day in 2007 to 48,520 barrels/day in 2008.

Between 2005 and 2010, the volume of service exports has also grown by over 40 percent; while non-oil exports have tripled over the same period.

Bahrain Industry Sectors: Services 

Bahrain’s service sector encompasses Islamic and offshore banking, insurance and tourism.

In the future, Bahrain’s service sector is expected to pilot Bahrain’s economic growth. In 2009, the finance sector contributed to nearly 27 percent of GDP and 40 percent of Bahrain’s total economic growth.

Today, Bahrain competes with Malaysia to be the Islamic banking hub for banks, financial institutions and financial services.