According to Countryaah, 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 particular.
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.