Analysis of Bahrain's Economy's strength and weakness Essay

Analysis of Bahrain's Economy's strength and weakness - Essay Example Crude oil derivatives produced from imported crude oil form a significant part of exports. Many industrial projects are under way. Unemployment {mainly among young Bahrainis}, declining oil reserves and decreasing underground water resources comprise Bahrain’s three main problems with long term implications (Wikipedia.org). The first strength is the realization of the need for maximum oil conservation. It has stabilized its oil production at 6,400 m3 or 40,000 barrels per day with the aim of stretching its oil reserves to 15 years (Wikipedia.org). Secondly, it has realized it cannot depend on oil for long and should diversify its economy. It has made commendable progress in this direction. It is utilizing its idle oil refineries to refine crude oil imported from its giant oil producer neighbors, particularly Saudi Arabia. Its ‘Persian Gulf Petrochemical Company’ is operating as a joint venture between Bahrain, Kuwait and Saudi Arabia, to produce petroleum derivatives methanol and ammonia. ‘Aluminium Bahrain’ is the largest factory of its kind in the world that produces 525,000 metric tons yearly. ‘The Arab Iron and Steel Company’ produces 4 million tons of iron ore pellets. Bahrain has a giant shipbuilding and repair yard that gets lucrative business from the hundreds of oil tankers and commercial ships plying to and from the Gulf nations. Its most commendable diversification is in financing: its impediment-free regulations have attracted more than 100 offshore banking institutions in ad dition to many onshore institutions (Wikipedia.org). Thirdly, it has provided an attractive setting to attract multinational firms. It has a modern infrastructure. Its airport serves 22 international carriers. Its seaports provide direct and regular links to Europe, the Far East and the U.S. It has a state-of-the-art communication network. These facilities have attracted a large number of banks and multinational