Overview

The Kingdom of Bahrain comprises an archipelago of islands with a total size of 712 sq. km (less than one third the size of the Australian Capital Territory), situated in the Persian Gulf, to the east of Saudi Arabia and west of Qatar. Bahrain also shares a maritime border with the Islamic Republic of Iran. Bahrain has a population of around 1.58 million people (2023), over half of whom are foreign nationals (mainly migrant workers). The majority of Bahrainis are Shi'a Muslims, while Bahrain's ruling family is Sunni.

In 1783, the Al-Khalifa family captured Bahrain from the Persians. During the 19th century, the Al-Khalifas secured their hold on the islands of Bahrain by entering into a series of treaties with the United Kingdom to make Bahrain a British protectorate. The archipelago attained its independence from the United Kingdom in 1971.

Facing declining oil reserves, Bahrain has sought to diversify its economy through developing a manufacturing industry and becoming an international banking centre. The state-owned Alba is one of the world's largest aluminium smelters. Bahrain has also styled itself as a tourism destination and plays host to several international sporting events, including a Formula One Grand Prix. Bahrain also hosts international gatherings such as the annual Manama Dialogue (regional security forum) organised by the International Institute for Strategic Studies.

Political overview

Bahrain's Head of State is His Majesty King Hamad bin Isa al-Khalifa, who acceded to the throne in 1999. The monarch appoints the Prime Minister. The current Prime Minister is HRH Crown Prince Salman bin Hamad Al Khalifa. Bahrain has a bicameral National Assembly (al-Jamiyh al-Watani), consisting of the Shura Council (Majlis Al-Shura, also called the Consultative Council) and the Council of Representatives (Majlis Al-Nuwab). The 40 Shura Council representatives are appointed by the monarch. The 40 Council of Representatives members are elected by an absolute majority vote in single-member constituencies to serve four-year terms. A second, run-off round is held if no candidate receives an absolute majority in the first round. Parliamentary elections were first held in 2002, with the next scheduled for November 2026. The Shura Council has limited legislative powers.

In early 2011, amid a wave of violent street clashes between mainly Shi'a protestors demanding political reform, and the police, security forces, and Sunni supporters of the government, King Hamad declared a state of emergency. The Gulf Cooperation Council (GCC) deployed forces to restore order in an operation named "Peninsula Shield".

Constitutional amendments in 2012 increased the powers of parliament. The most recent parliamentary and municipal elections were in November 2022.

Foreign policy

Bahrain's primary foreign policy focus is on its GCC neighbours. Bahrain also plays a key role in regional security architecture. It hosts the United States Navy's Fifth Fleet and United Kingdom naval base.

In June 2018, Bahrain, with Saudi Arabia, the United Arab Emirates and Egypt, cut off diplomatic ties and implemented a blockade of Qatar. At the GCC Leader's Summit on 5 January 2021, agreement was reached between Gulf leaders to re-establish relations with Qatar and gradually re-open borders and airspace.

On 15 September 2020, Bahrain and Israel signed the Abraham Accords in Washington, DC, establishing diplomatic relations between the two countries. On 31 March 2022, Israel hosted the Foreign Ministers of Bahrain, Egypt, Morocco, the UAE and the US at the Negev Summit.

As a result of the Yemeni Houthis attacking maritime targets in the Red Sea, Australia and Bahrain, alongside Canada, the Netherlands and New Zealand, has provided support for the US and UK defensive strikes against Houthi targets in Yemen since 12 January 2024.

Bilateral relations

The Australia-Bahrain relationship is friendly, long-standing and based on trade. It predates the establishment of formal ties with other Gulf countries. Australia maintained a Consulate-General in Bahrain from 1964 until 1986. The Bahraini Embassy in Jakarta is accredited to Australia; our Embassy in Riyadh is accredited to Bahrain.

In April 2024, Bahrain hosted the first bilateral Senior Officials’ Talks in Manama.

Economic overview

Bahrain’s GDP of USD $4.68 billion dollars (2024) is heavily dependent on oil and gas. 

Facing declining oil reserves, Bahrain has invested strongly in communications and transport infrastructure, and worked to attract multinational businesses. It has achieved some diversification, but oil revenue remains 85 per cent of government revenue and 10 per cent of GDP. The highest growing non-oil sectors of the economy are hotels and restaurants, government services and finance. Low oil prices, most recently during COVID-19, place pressure on the national budget.

Aluminium is Bahrain's second biggest export after oil. Aluminium Bahrain (Alba), one of the world's largest smelters, has expended production, through its Line 6 Expansion Project (adding an extra 540,000 metric tonnes per annum, in 2020, to previous one million mtpa). Bahrain also continues to seek new natural gas supplies as feedstock to support its petrochemical and aluminium industries. In response to fiscal pressures from the effect of low oil prices, the government is gradually lifting the price of gas supplies to industry.

Other major economic activities are finance including Islamic banking, construction and tourism.

As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state.

Trade and investment

Australia and Bahrain have had a commercial relationship for many years. In 2023, two-way goods and services trade totalled close to AUD $1.88 billion. Australia is Bahrain's fourth biggest import source with our exports mainly comprising alumina, meat, dairy products and wheat.

There are opportunities for Australian business to assist Bahrain in developing arable land, improving productivity and optimising water resources.

High level visits

• December 2016: Australian Special Envoy for Human Rights.
• April 2014: Minister for Agriculture visited Bahrain with industry delegation.

Updated: April 2022