Bahrain gained full control of its oil in May 1975, and in
1978 it was decided to nationalize all concessions. In
addition to the establishment of other industries, the state
promotes the extraction of copper and aluminum in
In other areas of economic policy, the country is
indulging in extreme liberalism, and the multinationals are
strongly encouraged to establish their businesses in the
archipelago, with generous tax rules and free access to
transfer capital. The country has been transformed into an
intermediate station dedicated to re-exporting all types of
goods to the region's capitals. Here you will find the BAPCO
refinery, the second largest in the Middle East, which
refines both local and Saudi crude.
In 1981, Bahrain was admitted to the Gulf Cooperation
Council, an organization inspired by the United States, to
control the region militarily and politically, curb the
Iranian Islamic revolution and oversee opposition groups in
the Member States.
One of the most persecuted groups, the Bahrain Liberation
Movement, has its primary support among oil workers,
students and liberals. It was a member of the Gulf
Liberation Movement until 1981 in the style of a number of
other movements from the area.
In late 1986, Bahrain purchased ground-to-air missiles
and aircraft from the United States to defend itself against
a possible Iranian invasion. It allowed the construction of
a North American military airport and at the same time
allowed the US Navy to use its naval bases for patrol in the
Gulf, as Washington had already done in recent months during
the Iran-Iraq war.
In November 1986, a highway connecting Saudi Arabia and
Bahrain was inaugurated, which in practice ceased to be an
island. During the first year, the highway was used by about
1 million vehicles.
Despite these huge projects, the fall in oil prices
caused the country to face a number of crises, and in 1989
it was forced to apply for loans to keep budgets coherent.
Kuwait and Saudi Arabia contributed $ 100 million annually
to support the government of Manama.
In March 1991 - following Iraq's defeat in the Gulf War -
the leaders of Egypt, Syria and the six Arab Member States
of the Riyadh Cooperation Council signed an agreement with
the United States to "guarantee the security of the region".
In July, the government of Bahrain declared that it would
allow foreign companies to take full control of all the
local businesses needed! Up to this point, all companies in
Bahrain were subject to a requirement that local capital be
51% of the shares. This change was part of the effort to
attract foreign investment to offset the losses caused by
the Gulf War.
After Kuwait, Bahrain was the emirate that suffered most
during the conflict. The country was threatened by the oil
pollution, the Black Sea, and for several months the smoke
from the burning oil sources in Kuwait darkened the sky over
Bahrain. In the economic plan, the effects of the invasion
of Kuwait could be clearly recorded and the subsequent war
against Iraq also began to be felt. Deposits in private
banks were reduced by between 30 and 40%, and the 75 foreign
banks established in Bahrain in 1981 had dwindled to 51 by
the end of 1991.
By the end of 1992, foreign capital that had disappeared
out of the country was slowly returning. In the same year,
Bahrain actively participated in the Middle East Peace
Conference, which took place in Madrid, in which, in
addition to Israel, 10 Arab countries participated.