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Bahrain Foreign Trade and the Balance of Payments
Traditionally, Bahrain was the entrepôt and
distribution
center for the northern Persian Gulf region. Since
independence,
however, it has lost much of its role as a result of the
development of nearby Saudi Arabian ports and strong
competition
from Dubayy in the UAE in the southern gulf. Oil continues
to be
the most important item in the country's international
trade,
representing well over one-half of the total value of both
exports and imports. The industrial diversification
program has
resulted in the creation of non-oil manufactured exports,
while
investments in agriculture have reduced significantly the
importation of certain food commodities.
The total value of imports in 1989, the latest year for
which
statistics have been published, was about US$2.8 billion,
a 34
percent decrease from the 1982 total of US$3.7 billion
(see
table 17, Appendix). The cost of crude petroleum, imported from
Saudi
Arabia for processing at the Sitrah oil refinery, declined
to
US$1.5 billion in 1988, compared with US$1.9 billion in
1982 and
US$2.5 billion in 1981. This significant drop, however,
resulted
more from the steady fall in international oil prices than
from a
decrease in the actual number of barrels imported. The
major nonoil imports included machinery and transportation
equipment,
manufactured goods, alumina, chemicals, food, and live
animals.
In 1989 Bahrain's principal trading partners were
Britain,
the United States, and Japan, accounting for approximately
16.3
percent, 12.4 percent, and 10.5 percent, respectively, of
total
imports (see
table 18, Appendix). Other major import
sources
included Australia, the Federal Republic of Germany (West
Germany), Italy, and Saudi Arabia.
In 1989 the value of Bahrain's exports was US$2.8
billion,
down 12 percent from 1984. Depressed oil prices,
especially in
the 1986-88 period, continued to erode the value of oil
and oil
products, the principal components of the export trade.
Non-oil
exports consisted of manufactured goods, in particular
aluminum
products but also some construction materials. The chief
trading
partners were Saudi Arabia, the United States, and the
UAE,
accounting for 18.2 percent, 7.3 percent, and 6.9 percent,
respectively, of all exports in 1989. Other export markets
included Japan, India, Kuwait, and the Republic of Korea
(South
Korea).
The value of Bahrain's imports was slightly less than
the
value of its exports in 1989. Preliminary estimates for
1990
indicated that the trade balance would also have a slight
surplus. The favorable balance was attributed to the
dramatic
rise in oil prices that followed the Iraqi invasion of
Kuwait.
Data as of January 1993
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