The population is predominately Muslim and includes both the Sunni and the Shiʿi sects, with the latter in the majority. The ruling family and many of the wealthier and more influential Bahrainis are Sunni, and this difference has been an underlying cause of political and social tension. Christians constitute about half of the remaining one-fifth of the population, with the rest consisting of Jews, Hindus, and Bahāʾīs.

Settlement patterns

The majority of the population now dwells in towns, but in the north and northwest of the main island, where irrigation has long been carried out using artesian water, there are numerous small villages and isolated dwellings where horticulture is the way of life. This area has an aspect of great fertility, which contrasts starkly with the bare desert appearance of much of the country. Villages consist, for the most part, of substantial flat-roofed houses built of stone or concrete. Some of the temporary settlements of fishermen and the poor are still constructed of barasti (branches of the date palm). There is little permanent settlement either in the southern half of Bahrain Island or on the smaller islands.

More than one-third of the population lives in the two principal cities, Manama and Al-Muḥarraq. Manama, with its port of Mīnāʾ Salmān, is the largest city and contains the main government offices, the business and financial district, many large hotels, Western-style shops, and a traditional Arab souk (market). It has a distinctly modern appearance as compared with Al-Muḥarraq, which is densely settled and has many narrow, winding streets. Other major settlements are ʿAwālī, near the centre of Bahrain Island, built largely for expatriate employees of the Bahrain Petroleum Company B.S.C. (Bapco); Madīnat ʿĪsā (Isa Town), a community established by the government in 1968; the sizable settlements of Al-Rifāʿ al-Shamālī (North Rifāʿ), Al-Rifāʿ al-Sharqī (East Rifāʿ), and Al-Rifāʿ al-Gharbī (West Rifāʿ); and Madīnat Ḥamad, completed in 1984.

Demographic trends

The population of Bahrain has been steadily growing, increasing almost 2 percent a year. Birth rates are below average, but immigration rates are the sixth highest in the world. About one-half of the population is foreign-born. Life expectancy is high, males living on average to about 77 and females to 81. The death rate is well below the world average, and the major causes of death are diseases of the circulatory or respiratory system and cancer. About one-fifth of the population is under the age of 15.

Agriculture and fishing

Less than 3 percent of Bahrain is arable, and agriculture contributes only a marginal proportion of the gross national product. The majority of Bahrain’s food is imported, but agricultural production meets some local needs, including a large portion of vegetables and dairy products. Tomatoes, dates, bananas, citrus fruits, mangoes, pomegranates, and alfalfa (lucerne) are among the main crops. Cattle breeding and poultry farming are also encouraged by the government, while camels and horses are bred for racing. The increasingly polluted waters of the gulf, mainly caused by spillages from Kuwaiti oil installations during the Persian Gulf War, have killed off economically valuable marine life (notably shrimp) that were important to the fishing industry. Fisheries have remained largely unexploited despite some government attempts to privatize and modernize the industry.

Resources and power

Bahrain’s oil production has always been small by Middle Eastern standards, and refining crude oil imported from Saudi Arabia has been of much greater importance since vast oil fields were discovered on the mainland; in 1998 Bapco began a major modernization project for its refinery. Bahrain’s only oil field, Al-Baḥrayn (also known as Awali), is rapidly depleting. Several oil companies, however, have been granted exploration rights by the government. The country’s offshore natural gas supplies are somewhat more substantial. Petroleum and natural gas resources and production are nationalized, but in the 1990s the government began encouraging foreign investment in the sector.

Manufacturing

The traditional industries of Bahrain were building dhows (lateen-rigged sailing vessels), fishing, pearling, and the manufacture of reed mats. These activities are now carried out on only a small scale.

Ship repair is handled at Mīnāʾ Salmān, near Manama, and at a large yard operated on Al-ʿAzl Island. Light industries include the production of building materials, furniture, soft drinks, plastics, and a wide range of consumer goods. The government has a significant financial stake in all these modern industries. In addition to the aluminum smelter operated by Alba, an aluminum rolling mill was opened in 1986 that manufactures such products as door and window frames.

Finance

The government has encouraged the growth of banking, insurance, and other financial services, and consequently Bahrain has become an important financial centre, notably of offshore banking. These activities have increasingly contributed to the country’s balance of payments. Bahrain has also been able to benefit from its long tradition as a commercial centre. The country’s central bank is the Bahrain Monetary Agency, which also issues the Bahraini dinar, the national currency. In addition to offshore banking units, there are local and foreign commercial banks, as well as investment banks. The Bahrain Stock Exchange opened in 1989.