Table of Contents
Cultural and Societal 5
Business Climate 12
Government and Military 16
OVERVIEW OF BAHRAIN
History of Bahrain
Bahrain was once part of the ancient civilization of Dilmun and served as an important link in trade routes between Sumeria and the Indus Valley as much as 5000 years ago. Since the late 18th century Bahrain has been governed by the Al-Khalifa family, which created close ties to Britain by signing the General Treaty of Peace in 1820. A binding treaty of protection, known as the Perpetual Truce of Peace and Friendship, was concluded in 1861 and further revised in 1892 and 1951. This treaty was similar to those entered into by the British Government with the other Persian Gulp principalities. It specified that the ruler could not dispose of any of his territory except to the United Kingdom and could not enter into relationships with any foreign government other than the United Kingdom without British consent. The British promise to protect Bahrain from all aggression by sea and to lend support in case of land attack.
After World War II, Bahrain became the center for British administration of treaty obligations in the lower Persian Gulf. In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain joined the other eight states (Qatar and the seven Trucial Sheikhdoms, which are now called the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. By mid-1971, however, the nine sheikhdoms still had not agreed on terms of union. Accordingly, Bahrain sought independence as a separate entity and became fully independent on August 15, 1971, as the State of Bahrain.
Cultural and Societal
To truly understand the society and culture of Bahrain it is necessary to know what it is based on. Society and culture in Bahrain is based on Islamic religious beliefs. These beliefs are not only the moral standards for the country, but they are also the legal standards for all commerce, criminal, civil, and political codes. From a western standpoint this can be very confusing and different to comprehend. To alleviate some confusion the following is a small summary of Islamic beliefs. The following is by no means a complete summary and many beliefs, laws, and other religious criteria has been left out for expediencies sake.
One of Islam’s literal meanings is the “True Religion”. An Islamic follower, or Muslim, believes that all people practice Islam even though they do not acknowledge it. They claim that their God, Allah, is the same as the Jewish and Christian God Ellohim. Their religion was founded near the sixth century by a cleric named Muhammad (Please note that his name is spelled many different ways and this is the one chosen for this report). Muhammad claimed to have had revelations from Allah dictating how a follower of Islam should act. Since those days sixth century Islamic morals have dominated the Middle East.
This can be very confusing for a westerner at first. Instead of being just part of life, as many people view religion in the west, Islamic followers believe it is everything to them. Based on its linguistic origin, the Arabic word ‘Islam’ means to achieve peace–peace with God, peace within oneself, and peace with the creations of God through submission to God and commitment to His guidance.
Islam is not a new religion but the final culmination and fulfillment of the same basic truth that God revealed through all His prophets to every people. For a fifth of the world’s population, Islam is not just a personal religion but a complete way of living. Over a billion people from all races, nationalities and cultures across the globe are Muslim–from the rice farms of Indonesia to the deserts in the heart of Africa; from the skyscrapers of New York to the Bedouin tents in Arabia.
Only 18% of Muslims live in the Arab world; a fifth are found in Sub-Saharan Africa; and the world’s largest Muslim community is in Indonesia. Substantial parts of Asia are Muslim, while significant minorities are to be found in the Central Asian Republics, India, China, North and South America, Eastern and Western Europe.
Muslims believe in the One, Unique, Incomparable, Merciful God–the Sole Creator, Sustainer and Cherisher of the Universe; in the Angels created by Him; in the Prophets through whom His revelations were brought to humankind; in the Day of Judgment and in individual accountability for actions; in God’s complete authority over destiny, be it good or bad; and in life after death.
What do they believe in?
Muslims believe that God sent his messengers and prophets to all people beginning with Adam (Adam) and including Noah (Nuh), Abraham (Ibrahim), Lot (Lut), Ishmael (Isma’il), Isaac (Ishaq), Jacob (Ya’qub), Joseph (Yusuf), Job (Ayb), Moses (Musa), Aaron (Harun), David (Dawud), Solomon (Sulayman), Elias (Ilyas), Jonah (Yunus), John the Baptist (Yahya), and Jesus (‘Isa); peace be upon them all.
God’s final message to humanity, a reconfirmation of the eternal message and a summing up of all that has gone before, was revealed to the Last Prophet Muhammad (peace be upon him) through the Archangel Gabriel.
One becomes a Muslim by believing and proclaiming that There is none worthy of worship except God, and that Muhammad is the Messenger of God. By this declaration the believer announces his or her faith in all God’s messengers, and the Scriptures (in their pristine original form) that these messengers brought.
What effect did Islam have on the world?
The Muslim community expanded rapidly after the Prophet’s death. Within a few decades, the territory under Muslim rule had extended onto three continents–Asia, Africa and Europe. Over the next few centuries this Empire continued to expand and Islam gradually became the chosen faith of the majority of its inhabitants. Among the reasons for the rapid and peaceful spread of Islam was the simplicity of its doctrine–Islam calls for faith in only One God worthy of worship. Islam also repeatedly instructs human beings to use their powers of intelligence and observation.
As Muslim civilization developed, it absorbed the heritage of ancient civilizations like Egypt, Persia and Greece, whose learning was preserved in the libraries and with the scholars of its cities. Some Muslim scholars turned their attention to these centers of learning and sought to acquaint themselves with the knowledge taught and cultivated in them. They, therefore, set about with a concerted effort to translate the philosophical and scientific works available to them, not only from the Greek and Syriac languages (the languages of eastern Christian scholars), but also from Pahlavi, the scholarly language of pre-Islamic Persia, and even from Sanskrit, an ancient Indian language.
Most of the important philosophical and scientific works of Aristotle; much of Plato and the Pythagorean school; and the major works of Greek astronomy, mathematics and medicine such as the Almagest of Ptolemy, the Elements of Euclid, and the works of Hippocrates and Galen, were all rendered into Arabic. Furthermore, important works of astronomy, mathematics, and medicine were translated from Pahlavi and Sanskrit. As a result, Arabic became the most important scientific language of the world for many centuries and the depository of much of the wisdom and the sciences of antiquity.
The achievement of scholars working in the Islamic tradition went far beyond translation and preservation of ancient learning. These scholars built upon and developed the ancient heritage before passing it on to the West.
Muslims excelled in art, architecture, astronomy, geography, history, language, literature, medicine, mathematics, and physics. Many crucial systems such as algebra, the Arabic numerals, and the very concept of the zero (vital to the advancement of mathematics), were formulated by Muslim scholars and shared with medieval Europe. Sophisticated instruments that would make possible the later European voyages of discovery were invented or developed, including the astrolabe, the quadrant and navigational charts and maps.
What does this mean?
This means that when a westerner enters an Islamic nation they are going to face some new ordeals. Here are a few of the differences from western culture:
Hospitality- Hospitality is very different in Bahrain than a westerner might be used to. You can walk down the street, and if you are hungry more often than not you can find someone willing to take you to their house and fix a meal for you, and if you happen to know the person at all it will be free. This also works for when you have no place to stay. Sometimes they will let you stay at their house with their family.
Music- The music that you will hear in this country will be different than what westerners are used to. While there is freedom there, you cannot drive down the street with your music loud in most areas, and the music that you do hear will rarely ever have any profanity or graphic lyrics.
Dress- In Bahrain you might find western clothes readily available. However, most of the older generation will be wearing the customary robes. They wear these not only at home, but also out in public and business areas. The younger generation, however, is now westernized and normally wears western style dress.
Female- This might be the strangest custom that a westerner will encounter. In this culture woman, for the most part, are unseen and unheard. Women do not hold jobs as in western cultures, nor are they allowed to conduct business on a regular basis. In this culture woman are said to be cherished and therefore are not allowed full rights under the Bahrain system of government.
While these are not the only differences that a westerner need be aware of, they are some of the most noticeable aspects of society.
The Ministry of Education in Bahrain is the official authority for running and administering the governmental educational institutions and supervising private education.
The Ministry mission is represented in ensuring education for all, and improving its quality and standard to meet the learners, the national development requirements and the labor market needs. It will ultimately develop the integrated-balanced personality of the Bahrain good citizen who is able to think and has belief in the Islamic faith and belonging to the Arab nation and international family.
As directed by the political leadership, the Ministry of Education is concerned with the modernization of educational institutions in the country, providing all the material and moral requirements. It believes that human resources represent the main and absolute element in achieving the overall development in all fields.
Therefore, the Ministry of Education has been interested in the continuous educational development, activating the school role, strengthening society’s confidence in it, linking it with labor and production sector, and making education more relevant to the Bahrain society and more effective to participate in achieving the national objectives.
The Ministry also has made its efforts in guiding education to be in conformity with the world rapid development, getting ready for the 21st century and facing the technological-scientific development through the preparation of Bahrain citizens to live their coming era with its technological and knowledgeable challenges, confidently and enthusiastically. Therefore, all the necessary powers and abilities were directed, modern technology was initially introduced to the Ministry’s schools represented in using computers as a teaching-learning tool. Plans were set to eradicate students, administrators, teachers’ computer illiteracy, and have been implemented since 1998/99.
Recently, an ambitious project to introduce Internet in schools was launched to utilize the Internet in activating the connection and gaining knowledge and information efficiently. It helps to push teaching and learning ahead.
The Objectives of the Education Programs
To secure educational opportunities for children in poor communities, in order that they can improve their future prospects.
Providing university education for students within target groups throughout the world.
Confronting illiteracy in the developing communities.
Building and financially supporting educational institutions from kindergartens, primary and secondary schools, up to colleges and universities.
Sponsoring teachers and paying their salaries and other related benefits.
Sponsoring students at various levels, including post-graduate studies.
The program provides training for teachers at various grades, and boarding facilities for students.
Bahrain Business Climate
Bahrain began to diversify its industry from simple oil production into petroleum refining, petrochemicals, downstream industries, manufacturing, ship repair, and services in the late 1960’s. Their aim was to accelerate economic growth and to provide more employment for Bahrainis. In 1995 the workforce was 272,100, of which only 40% were Bahraini. There was also a 12% unemployment rate (5,100 persons) in 1995.
The government is responsible for and unprecedented series of industrial development and employment initiatives. These initiatives have been further strengthened and enhanced by legislation allowing 100% foreign ownership to onshore companies and a more equitable agency law. The government has also encouraged private sector investment by maintaining its commitment to zero taxes on corporate and personal income.
There would be no world-class multinational company to consider a major investment anywhere unless the infrastructure was in place. Bahrain has easy access to an enormous regional market through an excellent road system and a causeway linking Bahrain with eastern Saudi Arabia. The island state has become the international financial services capital of the Middle East. Most major Arab financial institutions have offices in Bahrain, as do many international banks, branches of foreign insurance companies and exempt companies trading offshore. The country is also an international and regional wholesale inter-bank money market centered on its offshore banking sector, which was first established in 1975 with assets equaling $70 million US dollars.
Bahrain has a firm but flexible regulatory environment, directed by the Bahrain Monetary Agency. The Bahraini dinar is freely convertible and stable currency, firmly linked to the US dollar. Bahrain has also had mostly a consistent stock exchange in recent years. The gross volume of shares increased from 62 million in 1989 to nearly 400 million in 1993. Servicing the financial and business sectors is a digital telecommunication system as advanced as any in the world. Services include exclusive private channels, access to international databases and the Internet plus specially developed communication systems for bank treasury options.
Recently there has been a major push to attract information technology companies. World class computer and software companies such as Silicon Graphics and Digital Equipment have chosen Bahrain as their regional base for sales and support operations. By attracting such businesses and investment to Bahrain, the government can point to ten purpose-built industrial areas accommodating over 500 different manufacturing and service companies.
Bahrain is a key player in world financial and banking services. Its strategic location between east and west time zones and its advanced digital telecommunications systems enable it to communicate with all financial and business centers during the day. The country is an international and regional wholesale interbank money market centered on its offshore banking sector. The offshore financial sector today has assets of some US $70 billion and the daily foreign exchange turnover of all Bahrain’s financial institutions totals some US $4 billion.
International law firms, insurance companies, certified public accountants, management and public relations consultants, financial analysts, and advisers are all represented in the well-integrated services sector. This has of course stimulated the evolution of other related financial establishments including the Bahrain Stock Market, the money exchange sector, the real estate and construction business, and other commercial enterprises.
Bahrain is home to some 90 commercial banks, investment houses and offshore banking units (OBUs). There are also over 50 representative offices, money and foreign exchange brokers, and about 60 local, foreign, and exempt insurance companies. Bahrain’s economy is estimated to be growing at a rate close to 5% with financial services now accounting for some 18 % of all economic activity. Banks are investing in major projects and lending at an ever-increasing pace to investors. The Bahrain Monetary Agency (BMA) is the force behind the moves to improve the already high reputation of Bahrain in banking circles. The BMA maintains sound reporting and accounting arrangements, which strictly adhere to the best international practice. It conforms to international standards in the area of supervision and focuses increasingly on the quality rather than the quantity of bank assets. Bahrain has never had to revoke a banking license and has avoided the severe losses, which have occurred in some other financial centers. Because no financial sector can ever be immune to external happenings, the BMA announced a Deposit Protection Scheme. Under this scheme, the commercial bank deposits of both residents and non-residents, in local or foreign currency, will be protected up to a prescribed level in the event of the liquidation of a bank operating in Bahrain. The concept of protection was further enhanced by issuing a regulation relating to the licensing, regulation and supervision of advisers providing investment and other financial advice in or from Bahrain. This protects investors from the possibility of negligence or fraud.
Economic prosperity both in Bahrain and the Gulf is now firmly established as a fact. Private sector growth and its future potential have been augmented as the government’s dominant role declines. Internationally, the investment community has become increasingly aware of the advantages of globalization and a sustained low inflationary growth. These factors will surely give a major impetus to the financial services sector and help Bahrain to sustain its place as the financial capital of the Middle East for many years to come.
With a safe and cosmopolitan lifestyle and mature industrial infrastructure, with industrial incentives unique to the region, with its reputation as a banking center, with a legal system geared to protection of capital and with its strategic location, Bahrain offers itself as a premier Middle East investment location.
Government in Bahrain
Bahrain is a traditional monarchy. Members of the al-Khalifa family hold the majority of key government positions. The emir is a respected leader, and the royal family is generally well liked in spite of growing distrust in the Shiite community. The country employs the traditional Islamic administrative system of the majlis , which allows people to petition the emir directly. Bahrain has no legislature, political parties and elections are prohibited.
Military in Bahrain
Bahrain has several military branches: Ground Force, Navy, Air Force, Coast Guard, and Police Force. A male is eligible for the military at the age of 15-49. The availability of military manpower is 220,670. Bahrain spends $276.9 million on military forces annually, which is 4.5% of the GDP.