110913 Bahrain TIP and Water Report

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WORLD TRADE CENTER San Diego Kingdom of Bahrain January 2012Page 1 of 48

Trade Information Packet

Kingdom of BahrainJanuary 2012

Prepared byHasan AlShuwaikh

Mahmood Mahmood

WORLD TRADE CENTER San Diego

2980 Pacific HighwaySan Diego, CA 92101Tel: 619.615.0868Fax: 619.615.0876

www.wtcsd.org


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Table of Contents

Background ..................................................................................................................... 3

Map ................................................................................................................................. 4

Geography ...................................................................................................................... 4

Demographics ................................................................................................................. 6

Political Framework ......................................................................................................... 7

Communication ............................................................................................................... 9

Transportation ................................................................................................................. 9

Military ........................................................................................................................... 10

Economic Environment ................................................................................................. 10

Trade Overview ............................................................................................................. 14

National Trade with the USA ......................................................................................... 15

Trade Regulations and Standards ................................................................................. 16

Leading Sectors of U.S. Exports ................................................................................... 20

Business Travel ............................................................................................................. 29

Water Report in the Kingdom of Bahrain ....................................................................... 32

Bahrains Five Main Desalination Plants ....................................................................... 33

Water Consumption by Month000,000 Gallons(1997-2007) ................................. 34

Daily Average Consumption by Month000,000 Gallons(1997-2007) ..................... 35

Water Production000,000 Gallons(1997-2007) ..................................................... 36

ImportantContacts ........................................................................................................ 37

Names of the top officials at the Electricity & Water Authority ....................................... 37

Related Websites ............................................................ Error! Bookmark not defined.

World Trade Center Locations ...................................................................................... 45

Appendix ....................................................................................................................... 46

Sources ......................................................................................................................... 48


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BACKGROUND

In 1783, the Al-Khalifa family captured Bahrain from the Persians. In order to securethese holdings, it entered into a series of treaties with the UK during the 19th century

that made Bahrain a British protectorate. The archipelago attained its independence in1971. Bahrain's small size and central location among Persian Gulf countries require itto play a delicate balancing act in foreign affairs among its larger neighbors. Facingdeclining oil reserves, Bahrain has turned to petroleum processing and refining and hastransformed itself into an international banking center. King Hamad Bin Isa Al-Khalifa,after coming to power in 1999, pushed economic and political reforms to improverelations with the Shia community. Shia political societies participated in 2010parliamentary and municipal elections. Al Wifaq, the largest Shia political society, wonthe largest number of seats in the elected chamber of the legislature. However, Shiadiscontent has resurfaced in recent years with street demonstrations and occasionallow-level violence.

In early 2011, Bahrain's opposition sought to ride a rising tide of popular Arab proteststo voice their political and social woes. In mid-February, on the tenth anniversarymarking the King's initiation of his democratic reform initiative, a vanguard of youthinternet activists- who rejected the legitimacy of the Al Khalifa regime- organizeddemonstrations around Bahrain demanding a new constitution, release of hundreds ofShia political prisoners, and an end to discriminations in all sectors of society. Cycles ofprotestor deaths, funerals, and clashes with security forces ensued, escalating domestictensions and leading Wifaq legislators to formally resign from the national legislature inprotest in late-March 2011. The government's offers of modest political and economicconcessions went and the king's "national dialogue" with the opposition - led by his son,

the reform-minded Crown Prince - also languished in disagreements over procedureand preconditions. In mid-March 2011, with the backing of Gulf Cooperation Council(GCC) capitals - especially Riyadh and Abu Dhabi - King Hamad put an end to the masspublic gatherings by declaring a state of emergency and authorizing the military to takeall measures to "protect the safety of the country and its citizens." The government alsowelcomed a contingent of mostly Saudi and Emirati forces as part of a GCC deploymentto help Bahraini security forces suppress the protests. By mid-April security forces hadlargely relegated demonstrations to outlying Shia neighborhoods and villages, andnegotiations between the government and opposition reached a stalemate. Thegovernment exacted retribution against opposition groups and their supporters throughmass firings, arrests, and sectarian incitement.


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MAP

GEOGRAPHY

- Location:Middle East, archipelago in the Persian Gulf, East of Saudi Arabia.

- Area:Total: 760 sq kmCountry comparison to the world:188Land: 760 sq kmWater: 0 sq kmCoastline 161 km3.5 times the size of Washington, DC

- Land Boundaries:0 kmNo countries

- Climate:Arid; mild, pleasant winters; very hot, humid summers


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- Terrain:Mostly low desert plain rising gently to low central escarpment

- Elevation Extremes:Lowest point: Persian Gulf 0 m

Highest point: Jabal al Dukhan 122 m

- Natural Resources:Oil, associated and non-associated natural gas, fish, pearls

- Land Use:Arable land: 2.82%Permanent crops: 5.63%Other: 91.55% (2005)

- Total Renewable

Water Resources:0.1 cu km (1997)

- Fresh Water Withdrawal(Domestic/Industrial/Agricultural):Total: 0.3 cu km/yr (40%/3%/57%)Per capita: 411 cu m/yr (2000)

- Natural Hazards:Periodic droughts; dust storms

- EnvironmentCurrent Issue:Desertification resulting from the degradation of limited arable land, periods ofdrought, and dust storms; coastal degradation (damage to coastlines, coral reefs,and sea vegetation) resulting from oil spills and other discharges from largetankers, oil refineries, and distribution stations; lack of freshwater resources(groundwater and seawater are the only sources for all water needs).

- EnvironmentInternationalAgreement:Party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol,Desertification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, andWetlands signed, but not ratified: none of the selected agreements.


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- Geography Note: Close to primary Middle Eastern petroleum sources;strategic location in Persian Gulf, through which much of the Western world'spetroleum must transit to reach open ocean

DEMOGRAPHICS

- Nationality:Noun: Bahraini(s)

Adjective: Bahraini

- Ethnic Groups:Bahraini 62.4%, non-Bahraini 37.6% (2001 census)

- Religions:

Muslim (Shia and Sunni) 70.2%, other 29.8%

- Languages:Arabic (official), English, Farsi, Urdu

- Literacy:Definition: age 15 and over can read and writeTotal population: 86.5%Male: 88.6%Female: 83.6% (2001 census)

- Population:1,214,705Country comparison to the world: 157Note:includes 235,108 non-nationals (July 2011 est.)

- Age Structure:0-14 years: 20.5% (male 126,313 /female 122,359)15-64 years: 77% (male 595,244/female 339,635)65 years and over: 2.6% (male 14,791/female 16,363) (2011 est.)

- Median Age

Total: 30.9 yearsMale: 32.2 yearsFemale: 28.1 years (2011 est.)

- Population GrowthRate:2.184% (2011 est.)Country comparison to the world: 15


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- Legal System:Based on Islamic law and English common law; has not accepted compulsoryICJ jurisdiction.

- Executive Branch:

Chief of state: King Hamad bin Isa Al-Khalifa (since 6 March 1999); HeirApparent Crown Prince Salman bin Hamad Al-Khalifa (son of the monarch, born21 October 1969).Head of government: Prime Minister Khalifa bin Salman Al-Khalifa (since 1971);Deputy Prime Ministers Ali bin Khalifa bin Salman Al-Khalifa, Muhammed binMubarak Al-Khalifa, Jawad bin Salim Al-Araidh.Cabinet: Cabinet appointed by the monarch.Elections: The monarchy is hereditary; prime minister appointed by the monarch.

- Legislative Branch: Bicameral legislature consists of the Consultative Council(40 members appointed by the King) and the Council of Representatives or

Chamber of Deputies (40 seats; members directly elected to serve four-yearterms).Elections: Council of Representatives - last held in two rounds on 23 and 30October 2010 (next election to be held in 2014).Council of Representatives Election Results: al Wifaq (Shia) 18, al Asala (SunniSalafi) 3, al Minbar (Sunni Muslim Brotherhood) 2, independents 17.

- Judicial Branch:High Civil Appeal Court.

- Political Parties and Leaders:Political parties prohibited but political societies were legalized per a July 2005law.

- Political Pressure Leaders:Shia activists; Sunni Islamist legislators. Other: several small leftist and othergroups are active

- International Organization Participation:ABEDA, AFESD, AMF, FAO, G-77, GCC, IAEA, IBRD, ICAO, ICC, ICRM, IDB,IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM (observer), IPU, ISO,ITSO, ITU, ITUC, LAS, MIGA, NAM, OAPEC, OIC, OPCW, PCA, UN, UNCTAD,UNESCO, UNIDO, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO


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COMMUNICATION

- Telephones- Main lines in use:238,400 (2009). Country comparison to the world: 123

- Telephones- Mobile cellular:1.578 million (2009). Country comparison to the world: 137

- Telephone System:General assessment: Modern systemDomestic: Modern fiber-optic integrated services; digital network with rapidlygrowing use of mobile-cellular telephonesInternational: country code - 973; landing point for the Fiber-Optic Link Aroundthe Globe (FLAG) submarine cable network that provides links to Asia, MiddleEast, Europe, and US; tropospheric scatter to Qatar and UAE; microwave radiorelay to Saudi Arabia; satellite earth station - 1 (2007)

- Broadcast Media:State-run broadcast media; Bahrain Radio and Television Corporation (BRTC)operates 5 terrestrial TV networks; satellite TV systems provide access tointernational broadcasts; state-run BRTC broadcasts over several radio stations;1 private FM station directs broadcasts to Indian listeners; radio and TVbroadcasts from countries in the region are available (2007)

- Internet Country Code:.bh

- Internet Hosts: 53,944 (2010)

- Internet Users: 419,500 (2009)

TRANSPORTATION

- Airports: Total: 4. country comparison to the world:184

- Airports with paved runways:Total: 4Over 3,047m: 32,438 to 3,047 m: 1 (2010)

- Heliports: Total: 1

- Pipelines: Gas 20 km; Oil 32 km (2009)

- Roadways:Total: 3,851 km. Country comparison to the world: 158Paved: 3,121 km
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2053rank.html?countryName=Bahrain&countryCode=ba&regionCode=me&rank=184#bahttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2053rank.html?countryName=Bahrain&countryCode=ba&regionCode=me&rank=184#bahttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2053rank.html?countryName=Bahrain&countryCode=ba&regionCode=me&rank=184#bahttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2053rank.html?countryName=Bahrain&countryCode=ba&regionCode=me&rank=184#ba


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Unpaved: 730 km (2007)

- Merchant Marine: Total: 7Country comparison to the world: 127By type: bulk carrier 2, container 4, and petroleum tanker 1

Foreign-owned: 5 (Kuwait 5)Registered in other countries: 6 (Honduras 5, Saint Kitts and Nevis 1) (2010)

- Ports and Terminals: Mina' Salman, Khalifa Port, and Sitrah.

MILITARY

- Military Branches:Bahrain Defense Forces (BDF): Ground Force (includes Air Defense), NavalForce, Air Force, National Guard

- Military service age and obligation:17 years of age for voluntary military service; 15 years of age for NCOs,technicians, and cadets; no conscription (2010)

- Manpower available for military service:Males age 16-49: 208,365Females age 16-49: 174,375 (2010 est.)

- Manpower fit for military service:Males age 16-49: 170,633Females age 16-49: 146,243 (2010 est.)

- Manpower reaching military significant age annually:Male: 6,590Female: 6,475 (2010 est.)

- Military Expenditures:4.5% of GDP (2006)Country comparison to the world: 19

ECONOMIC ENVIRONMENT

Bahrain is one of the most diversified economies in the Persian Gulf. Highlydeveloped communication and transport facilities make Bahrain home tonumerous multinational firms with business in the Gulf. As part of itsdiversification plans, Bahrain implemented a Free Trade Agreement (FTA) withthe US in August 2006, the first FTA between the US and a Gulf state. Bahrain'seconomy, however, continues to depend heavily on oil. Petroleum productionand refining account for more than 60% of Bahrain's export receipts, 70% ofgovernment revenues, and 11% of GDP (exclusive of allied industries). Other


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major economic activities are production of aluminum - Bahrain's second biggestexport after oil - finance, and construction. Bahrain competes with Malaysia as aworldwide center for Islamic banking and continues to seek new natural gassupplies as feedstock to support its expanding petrochemical and aluminumindustries. Unemployment, especially among the young, is a long-term economic

problem Bahrain struggles to address. In 2009, to help lower unemploymentamong Bahraini nationals, Bahrain reduced sponsorship for expatriate workers,increasing the costs of employing foreign labor. The global financial crisis causedfunding for many non-oil projects to dry up and resulted in slower economicgrowth for Bahrain. Other challenges facing Bahrain include the slow growth ofgovernment debt as a result of a large subsidy program, the financing of largegovernment projects, and debt restructuring, such as the bailout of state-ownedGulf Air.

Overview:

- GDP (Purchasing Power Parity): $29.71 billion (2010 est.)

- GDP (Official exchange rate): $2.66 billion (2009 est.)

- GDP -Real Growth: 4.1% (2010 est.)

- GDPPer Capital: $40,300 (2010 est.)

- GDPComposition by Sector:Agriculture: 0.5%Industry: 57.3%Services: 42.2% (2010 est.)

- Labor Force:656,200Country comparison to the world: 152Note:44% of the population in the 15-64 age group is non-national (2010 est.).

- Labor force -by occupation:Agriculture: 1%Industry: 79%Services: 20% (1997 est.)

- Unemployment Rate:15% (2005 est.)Country comparison to the world: 148

- Investment (Gross fit):26.7% of GDP (2010 est.)Country comparison to the world: 36

- Budget: Revenues:$5.61 billion


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Expenditures: $6.128 billion (2010 est.)

- Public Debt:65.8% of GDP (2010 est.)Country comparison to the world: 2841.8% of GDP (2009 est.)

- Inflation Rate (Consumer prices):2% (2010 est.)Country comparison to the world: 592.8% (2009 est.)

- Stock of domestic credit:$17.26 billion (31 December 2010 est.)Country comparison to the world: 86

- Market value of publicly trade shares:$16.93 billion (31 December 2009)Country comparison to the world: 61

- Agriculture products:fruit, vegetables; poultry, dairy products; shrimp, fish- Industries: Petroleum processing and refining, aluminum smelting, ironpelletization, fertilizers, Islamic and offshore banking, insurance, ship repairing,tourism.

- Industrial production growth:1.5% (2009 est.)Country comparison to the world: 141

- Electricity production:10.25 billion kWh (2007 est.)Country comparison to the world: 91

- Electricity consumption:10.1 billion kWh (2007 est.)Country comparison to the world: 87

- Electricity exports:0 kWh (2008 est.)

- Electricity imports:0 kWh (2008 est.)

- Oil production:48,560 bbl/day (2009 est.)Country comparison to the world: 63

- Oil consumption:39,000 bbl/day (2009 est.)Country comparison to the world: 105

- Oil exports:238,300 bbl/day (2007 est.)Country comparison to the world: 49

- Oil imports:228,400 bbl/day (2007 est.)Country comparison to the world: 41


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- Oil proved reserves:124.6 million bbl (1 January 2010 est.)Country comparison to the world: 66

- Natural gasproved reserve:92.03 billion cu m (1 January 2010 est.)Country comparison to the world: 54

- Current account balance:$589 million (2010 est.)Country comparison to the world: 51

- Exports:$14.61 billion (2010 est.)Country comparison to the world: 76

- Exportscommodities:petroleum and petroleum products, aluminum, textiles

- Export partners:India 4.2%, United States 3.07% Saudi Arabia 2.78% (2009)

- Imports:$11.91 billion (2010 est.)

- Imports -commodities: Crude oil, machinery, chemicals.

- Imports partners:Saudi Arabia 22.91%, France 9.76%, US 7.95%, China 6.4%,South Korea 5.26%, Japan 5.19%, Germany 5.01%, UK 4.34% (2009).

- Reserves of foreign exchange and gold: $4.495 billion (31 December 2010est.)

- External debt:$14.77 billion (31 December 2010 est.)

- Stocks of direct foreign investments at home: $15.77 billion (31 December2010 est.)

- Stocks of direct foreign investments abroad: $8.399 billion (31 December2010 est.)

- Exchange rate:Bahraini dinars (BHD) per US dollar - 0.376 (2010),


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TRADE OVERVIEW

As part of the GCC Customs Union, member countries are working towardunifying their standards and conformity assessment systems, and have progressedconsiderably toward the goal of a unified food standard targeted for adoption by 2011.

However, each country currently applies either its own standard or a GCC standard,which can cause confusion for businesses. Bahraini standards are required to meetnational requirements (safety, quality, and fitness for purpose), as prepared by therespective technical committees. Most often, Bahraini standards are adoptions ofinternational or Gulf standards and the development of standards in Bahrain is based onthe following principles: a) no Bahraini standard is to be developed if there is anidentical draft Gulf standard in existence, b) developing new Bahraini standards mustnot create trade barriers.

The total number of Gulf standards adopted as Bahraini standards currentlystands at 1,020, out of which 320 are mandatory and 700 are voluntary. There are also

approximately 438 draft Gulf standards in the pipeline. In June 2008, GCC FinanceMinisters agreed to establish a committee to oversee standards that can be easilyadopted, especially in regard to food products. Bahrains Standards and MetrologyDirectorate (BSMD) is a government institution within the Ministry of Industry andCommerce. It is responsible, in accordance with Legislative Decree No. 16 of 1985 onStandards and Metrology, as amended by Legislative Decree No. 13 of 1992, forissuing Bahrains standards, either by adopting as national standards the internationalor Gulf standards issued by the Gulf Cooperation Council (GCC) Standards andMetrology Organization, or by preparing standards to meet national requirements.

The BSMD is led by a National Committee that acts as the Board of Directors. This

board, made up of representatives from relevant ministries and the Chamber ofCommerce as well as individual experts, is the highest authority on standards andmetrology. The BSMD consists of two sections: the Standards & Information sectionand Quality Assurance & Metrology section. Standardization in Bahrain can be tracedback to the late 1960s when traffic was shifted from the left to the right side of the road,and liquid measures were converted from the imperial gallon to the liter. The pound wasused for mass measurements, and the foot, yard, and mile for length and areameasurements. The changeover to the metric system set the pace for standardization inBahrain.


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NATIONAL TRADE WITH THE USA(Cumulative Year to Date through November 2010)

SITC DescriptionExports Imports

F.A.S Value BasisCustoms Value

Basis

1 Food and live animals 46,749 405

2 Beverages and tobacco 821 -

3 Crude materials, inedible ;except fuels

5,332 80

4Mineral fuels, lubricants and

related materials24,312 29

5.Animal and vegetable oils,

fats and waxes21 -

6.Chemicals and related

products

49,752 73,354

7.Manufactured goods

classified chiefly by material34,860 97,059

8.Machinery and transport

equipment1,000,974 4,424

9.Miscellaneous manufactured

articles89,505 43,075

10. Other 149,573 19344

Total 1,401,899 237,770


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TRADE REGULATIONS AND STANDARDS

Import Tariffs:

In January 2003, Bahrain took a step toward further GCC integration by ratifying the

GCC Unified Customs Union. The agreement eliminated tariffs for GCC member stateson 417 items (primarily food and medical products), and lowered to five percent itsimport duties on all other commodities except alcohol (125% duty) and tobacco (100%duty). The GCC countries also have a unified tariff standard and a single-point-of-entrysystem.

According to the GCC Secretary General for Economic Affairs, intra-GCC trade rosefrom $33.8 billion in 2001 to approximately $52.8 billion in 2007, an increase of 56percent. The Government made several changes to its customs duties regime to complywith the newly established GCC Unified Customs Union. New customs classificationsare as follows:

In principle, no tax or duty is payable on raw material imports, semi-manufacturedgoods to be used in manufacturing, imports required for development projects (notincluding spare parts), transshipments, and re-exports.

Bahrain has phased out most subsidies for export industries, but permits duty-freeimportation of raw materials for export products and of equipment and machinery fornewly established export industries. All industries in Bahrain, including foreign-ownedfirms, benefit from government-subsidized utilities.

Foreign products entering or already in the GCC are dealt with as follows:

Duty ExemptIncludes 417 listed

commodities, mostly foodand medical products.

5 percent importduty

All other commodities,except tobacco andalcoholic beverages.


Tobacco.


Alcoholic beverages.


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- Goods imported to the GCC post January 1st 2003 will be granted entry if theimporter presents certificates issued by the first single-entry point as a proof thathis customs duties have been paid after the establishment of the customs union;

- Goods imported to the GCC post January 1st 2003, and for which the importer

fails to prove payment of customs duties after the establishment of the customsunion, shall have their customs duty collected at the customs point of the countryof final destination;

- The customs declaration for statistical purposes shall be prepared manually bythe owner of the goods or the person who acts on his behalf, or by computer, andshall be approved at the customs exit point and have the local invoices attachedto it. Invoices are required to detail the correct value and origin of the goods;

- The importer must ensure that the customs authority has made the necessaryendorsements that justify the entry and exit of the goods on the basis of the

statistical declaration.

Trade Barriers:

For health and religious reasons, alcoholic beverages are assessed a 125 percentcustoms duty and tobacco products a 100 percent duty. There is no local production ofthese goods. As a result of the FTA, prior restrictions on the foreign provision ofengineering, legal, construction services have been lifted; restrictions on pilotageservices remain in effect. In a 2008 GCC Health Ministers meeting, Bahraini officialsagreed to impose a tobacco "health tax" essentially increasing the effective duty ontobacco by 200 percent.

Import Requirements and Documentation:

Customs Procedures:

Following the completion of the Customs Bill of Entry by the importer or representativeagent, the customs authority stipulates the beginning of the clearing process, composedof the following:

Statistics Office Restriction on import and export (Imports and Exports Restriction Office)

Auditing the customs charges and other charges Payment to Cashier of related charges Inspection and checking of documents


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Customs regulation:

In general, the following will apply:

No customs duty is payable on goods imported in transit or for trans-shipment;

No customs duty is payable on exports; Raw materials and equipment for use in manufacturing are exempt from duty

under the Protection and Support Law; Duty exemption for qualified goods is available under the GCC Trade Exchange,

the Bilateral Trade Agreement, and the Arabian Free Trade Area Agreement; Exemption is available for goods stored in bonded warehouses;All other imports are subject to customs duty at rates set in the customs tariff. Theseapply on CIF Bahrain value. For imports, Bahraini Customs requires the followingdocuments: A Delivery Order issued by the Shipper or the Liners Agent; A Suppliers commercial invoice in duplicate (in Arabic or English);

A Packing List in duplicate; A Certificate of Origin in Arabic or English (produced by a Chamber ofCommerce and endorsed by an Arab Embassy); A copy of the Insurance Certificate, if applicable; A Bill of Lading (four copies), including gross weight and dimensions; A bank payment voucher or bank receipt; A statistical declaration if the final destination for the goods is in one of the GCCstates.

For more information or inquiries please contact:

Bahrain Customs: P.O. Box 15Manama, Kingdom of BahrainTel: + (973) 17-725333 Fax: + (973) 17-727556Website: http://www.bahraincustoms.gov.bh/E-mail:[email protected]

U.S. Export Controls:

U.S. companies exporting to Bahrain need to apply for an export license from theBureau of Industry and Security (BIS) if their products or services are controlled for anyof the following reasons: CB1, CB2, CB3, NP1, NS1, NS2, MT1, RS1, RS2, CC1, and

CC3. If a firm does not know its export commodity control number, it should contact itslocal U.S. Export Assistance Center (USEAC) for more information on BIS commodityclassification. Additional information about the types of products covered may beobtained from the State Departments Directorate of Defense Trade or the CommerceDepartments Bureau of Industry and Security (BIS).
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Temporary Entry:

The government of Bahrain opened a Free Trade Zone that started in the beginning of2009. Facilities located in Mina Salman and Mina Khalifa may be used for the temporaryimport of goods for re-export.

Labeling and Marketing Requirements:

By law, food labels must include product and brand names, production and expirationdates, country of origin, name and address of manufacturer, net weight in metric units,and a list of ingredients in descending order of magnitude. All fats and oils used asingredients must be specifically identified on the label. Labels must be in Arabic or in

Arabic/English. Stickers are not accepted. Small quantities of products in English-onlylabels may be approved for import on a case-by-case basis for test marketing purposes.Pork products, or products containing pork or pork lard, should be clearly identified assuch on the label. Products found to contain traces of pork that are not so labeled will

be confiscated and possibly banned from future import for a specified period of time.

Prohibited Imports:

According to the Bahrain Customs and Ports Directorate Handbook, a number of itemsare prohibited from import. These include: Irradiated food products; Weapons, except under special license; Pornography and materials considered salacious; Wild animals; Radio-controlled model airplanes;

Childrens toys containing methyl chloride and other articles Foodstuffs and sweets containing cyclamates.

Manufacturers must present a certificate verifying that foods do not contain cyclamates.Drugs and medicines may only be imported by a drug store or pharmacy licensed by theMinistry of Health (MOH).

Bahrain requires that pharmaceutical products be imported directly from a manufacturerwith a research department and that the products be licensed in at least two other GCCcountries, one of which must be Saudi Arabia. Drugs and medicines may be importedonly by a drug store or pharmacy licensed by the Ministry of Industry and Commerce

after approval by the Ministry of Health. Bahrain prohibits the importation of weapons(except under special license), pornography, wild animals, radio-controlled modelairplanes, foodstuffs containing cyclamates, and childrens toys containing methylchloride (and other articles declared harmful by the Ministry of Health). Bahrain is alsotaking steps to ban the import of 132 chemicals based on a memorandum passed bythe Ministry of Health in June of 2008.


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All imported beef and poultry products require a health certificate issued by the countryof export, and a Halal slaughter certificate issued by an approved Islamic center in thatcountry.For an up-to-date copy of the prohibited items list, please visit Bahrain's Customswebsite: http://www.bahraincustoms.gov.bh.

Sanctions imposed on imports:

As a member of the Arab League, Bahrain is officially committed to enforcement of theprimary aspect of the Arab League's boycott of Israel, but enforcement is lax. Bahraindoes not enforce the secondary or tertiary aspects of the boycott. Occasionally, U.S.citizens and firms encounter tender documents that specify participation in the boycott,which U.S. firms cannot legally sign. Document language in such instances is usuallyquickly adjusted. The government of Bahrain has made efforts to withdraw all old tenderdocuments, and new articles were drafted in harmony with WTO requirements.

Export Subsidies:

Bahrain has phased out most subsidies for export industries, but permits duty-freeimportation of raw materials for export products and of equipment and machinery fornewly established export industries. All industries in Bahrain, including foreign-ownedfirms, benefit from government-subsidized utilities.

LEADING SECTORS OF US EXPORTS

Motor Vehicles and Vehicles Products:

It is expected that U.S. automobile exports to Bahrain will remain strong through 2009.U.S. car dealerships in Bahrain attribute strong sales to the FTA and the relativelyweakened value of the dollar.

The U.S. dollar value has reduced the cost of U.S. manufactured vehicles in relation toEuropean models. The overall market for U.S.-made auto parts is declining due to Asianand Saudi competition. However, there are opportunities in niche markets (brake pads,oil filters) and auto accessories (wax, lubricants) where American products are preferredfor their high quality.

Bahrainis value U.S. cars for their safety, comfort, interior design, and capacity toaccommodate large families. U.S. car sales also benefit from an overall expandingmarket. According to the Bahrain General Directorate of Traffic, 287, 000 vehicles wereregistered in Bahrain in 2007, and registration is increasing 6.2 percent per year onaverage, suggesting an estimated 311, 000 vehicle registrations in 2008.


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Medical Equipment/Healthcare:

Bahrain has a modern health system. All Bahrainis receive Free State health care. Mostcompanies offer their expatriate workers some sort of health coverage, either throughinsurance companies, in which case rates are negotiable, or through arrangements with

one or more of the local private hospitals. There is an $8 fee for expatriates attendingan emergency clinic in a government hospital. In 2006, Bahrains health services sectorshowed significant growth, which is likely to continue. In 2004, work began on theconstruction of the $80 million King Hamad Hospital in Muharraq expected to finish in2009, the expansion of the Joslin Diabetes Center, and the establishment of otherclinics also began in 2004. The Government of Bahrain encourages the private sector toenter the health care market and thus share the cost of services. It is also drawing upplans to attract international hospitals in order to promote health tourism. Thegovernment encourages the private sector to play a greater role in the healthcare. TheBahrain Development Bank (BDB) assists the healthcare sector by giving loans, totaling$18 million in 2008. A "medical city" is under development as part of a $114 million

investment by Ithmaar Investment Bank-- the reclaimed land near Amwaj Island isalready under contract.

Current plans for the health services sector include the construction of a third largepublic hospital, the King Hamad Hospital in Muharraq, due to open in 2009. The RoyalCollege of Surgeons will use the medical facilities as a learning hospital. In the privatesector, the Boston-based Joslin Diabetes Center (JDC) constructed its first facilityoutside the U.S. in Bahrain in 2003. Due to increased demand for diabetes treatment inBahrain and the Gulf, in 2004, JDC announced plans to expand the existing facility withan additional building. In 2002, a $45 million private hospital, the Bahrain SpecialistHospital (BSH), contributed to the growth in the countrys private medical services withthe establishment of the Ibn Al Nafees Hospital.

In 2006, the largest hospital in Bahrain the state-run Salmaniya Medical Complex spent $12.5 million to replace its medical equipment. It is looking to replace patient vital-sign monitors, infant incubators, ventilators, infusion pumps, and also to acquire a deepX-ray therapy machine.

In a step towards reducing the load on government health services, the Ministry ofHealth (MOH) has also announced that the upper house (the Shura Council) of thelegislative branch, or National Assembly, has proposed a draft legislation thatintroduces compulsory health insurance for non-Bahrainis. The current statistical MOHfigures indicate that only 10 percent of Bahrains patients receive priva te treatment. TheMOH has recognized the urgency of investments in the health sector is planning toestablish a liaison office, dedicated to attract investment in the health sector.

Ministry of Health officials recently announced that the government might startoutsourcing certain jobs, including the management of both medical and non-medicalservices in the $80 million King Hamad Hospital. The Ministry of Health has alsoidentified areas for investment, which include: the pharmaceutical industry, drug


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packaging and distribution, health complementary services (ex. producing of syringes),health support services, health resorts, health education and training, medical researchcenters, information technology and biotechnology.

Air Conditioning and Refrigeration Equipments:

Bahrain's climate requires air conditioning most of the year due to high temperaturesand high humidity. Air conditioning equipment breaks down frequently as a result ofconstant use and lack of maintenance.

The market for air conditioning and refrigeration equipment is strong, rising from $ 52million in 2004 to $59 million in 2006. Sales for units are also up. Leading Americanbrands, highly regarded for their reliability, have traditionally done well in Bahrain.Moreover, the newly finished projects are an important market for American products.

A construction boom is currently underway in residential housing and commercial real

estate, including several major hotel/resort projects. It is estimated that U.S. sales in thissector will increase by as much as 30 to 35 percent.

Computers and Peripherals:

Bahrain has focused its efforts on the entry of new private firms in specific prospectivegrowth sectors, which includes the information and communications technology servicesector. Bahrain has been actively attracting international companies in the informationtechnology sector to invest in Bahrain, with a long-term vision of the formation of aninformation technology hub. The government established the Central InformaticsOrganization that oversee the growth of information technology, and seeks to improvegovernment efficiency by using new technologies.

Internet use is expanding in Bahrain. The Government launched an E-Governmentinitiative, and the electronic-based technology has overwhelmingly been accepted as animportant tool of effective business strategy and good governance.

Almost, all Ministries have upgraded, or are upgrading their e-services. Microsoft andBDO Jawad Habib, a Bahrain-based consultancy firms, have won the contract to installand run Bahrains E-Investor Project. A $6.89 million contract was also signed to takeBahrain's government schools into cyber space, part of the Kings Future Schoolsproject. Government schools throughout Bahrain will be using Macs to help childrenkeep up with the electronic age. The contract for the deal was signed between theMinistry of Education (MOE), Apple Center and the Integrated Technology Group (ITG).

Apple Center will be responsible for providing, installing and operating the electronicsystem at all government schools of all education stages, in addition to training teacherson its uses. The five-year agreement, which ends in July 2009, aims at expanding theinformation technology system at all stages of government education. The Ministry ofEducation is considering implementing an extension of the project that will cover theKingdoms only public and medical universities.


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King Hamad Future Schools project is a joint program between the Ministry ofEducation and UNESCO aimed to develop the Ministry of Educations currentknowledge-based curriculum to a knowledge-based economy or K-economy curriculum.

The Central Information Organization established a new entity that sought to implemente-voting for the 2006 elections; however, due to political pressure the project wascancelled. The organization signed a $3.41 million deal with Microsoft to upgrade theirsystems.

The private sector, and especially the financial services sector, has started upgradingtheir IT systems in order to make them competitive in a global market. Cisco wasawarded major tenders from several financial institutions including Gulf Finance House,Standard Charter Bank, Capital House, and Unicorn Bank.

Telecommunication:

The telecommunications sector was the first key sector to be liberalized in Bahrainfollowing the government's announced interest in opening traditionally government-controlled industries. The Telecommunications Regulatory Authority (TRA), establishedin late 2002, awarded a mobile telecommunications services license to MTC-Vodafone,thus ending the monopoly of Bahrain's telecom services provider, Batelco. The licensewas awarded under the Telecommunications Law, which took effect January 2003. Anopen framework attracted a second wireless carrier--Zain Telecommunication--torelocate their headquarters from Kuwait to the Kingdom of Bahrain in 2007. TRAawarded a third mobile provider license to STC in 2008. In all, 63 telecommunicationcompanies are currently operating in different sectors throughout Bahrain.Telecommunications liberalization also extended to paging services, very small apertureterminal (VSAT), public access mobile radio services, international telecommunicationsfacilities, international telecommunications services, national fixed services, internetservice provider (ISP) and value-added services license following the full liberalizationof the sector on July 1, 2004.

The TRA most recently announced the provision of three InternationalTelecommunications Facility Licenses (IFLs), six International TelecommunicationsServices Licenses (ISLs), nine VSAT licenses, fifteen value-added Services (VAS)"Class" licenses and eight Internet Service Provider (ISP) licenses.

According to the Central Bank of Bahrain (CBB), in 2008 the number of mobile phoneusers reached 723, 000 up from 630, 000 the previous year, and representing a growthof 1.5 percent.

Over 70 percent of Bahrain's 1,080,000 residents are mobile phone users, suggestingone of the highest penetration rates in the Middle East. In 2008, Batelco had 256, 000registered Internet subscribers; personal users accounted for 80 percent and business


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users 20 percent of the total Internet market. The Telecommunication sector has grownrapidly, largely due to new technologies including use of the internet, voice-over-IP(VOIP), and mobile phones.

Financial Services:

Bahrain is a principal financial services hub in the Middle East with the highestconcentration of Islamic Banks. Legal, regulatory, and accounting systems in thefinancial sector (onshore and offshore) are transparent and consistent with internationalnorms. International financial institutions operate in Bahrain, both internationally anddomestically, without impediments.

The Central Bank of Bahrain (CBB) regulates the banking sector under the provisions ofthe BMA law (Decree Law No. 23 of 1973). In May 2002, the Government of Bahrainannounced that regulatory responsibility for the insurance sector and stock exchangewould move to the CBB. This move was completed in late 2002.

To promote the Kingdoms position as a leading financial destination, the governmentupgraded the legal framework of the Bahrain Monetary Agency creating the CentralBank of Bahrain in September 2006. In October of 2006, the CBB granted offshorebanks greater flexibility allowing them to invest locally.

Bahrain's attraction as a financial center is based on its established offshore facilities,free foreign exchange movement, tax-free status, stable Bahraini Dinar-USD foreignexchange rate, established insurance sector, modern telecommunications systems, andprime geographical location among the GCC countries. The financial sector hasestablished itself as a key employment generator for the local population.

In March 2004, in an effort to stimulate the insurance industry and reinforce Bahrainsposition as a major insurance center in the Middle East, the Bahrain Monetary Agencylifted the requirement that foreign insurance brokers and loss adjusters must have alocal partner in order to operate. These firms, which were previously required to have atleast 51 percent Bahraini-ownership, are now permitted to operate with 100 percentforeign-ownership. The CBB is holding consultations on further reform in areas such ascaptive insurance, solvency, business conduct, risk management and financial crime,enforcement, CBB reporting and public disclosure, intermediaries, and Islamicinsurance.

Bahrain has promoted itself as an international financial center in the Gulf region. Ithosts 412 diverse financial institution, including 215 banks, of which 61 are offshorebanking unites (OBUs); 42 investment banks; and 28 commercial banks, of which 26are foreign owned. In addition, there are 34 representative offices of international banks,24 moneychangers and money brokers, and several other investment institutions,including 89 insurance companies. In addition, Bahrain is also a leading Islamic financecenter in the region. The sector has grown considerably since the licensing of the firstIslamic bank in 1979. Bahrain has 38 Islamic banks and financial institutions.


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Seventeen new licenses were issued in 2007: three investment bank, six offshorebanking units, four investment advisory brokers, two financial services ancillary serviceproviders, six representative offices, one money exchange unit and eight Islamicbanking and financial institutions.

Bahrain's underdeveloped insurance market possesses significant profit potential forinvestors. Total insurance premiums for companies operating in Bahrain increased 8.3percent to $314.7 million, up from $289.6 million in 2006. As of year-end 2008, theindustry included 183 companies, which, compared to 172 in 2006, represents a growthof 6 percent.

The Government of Bahrain (GOB) has identified Islamic banking as one of the maineconomic growth areas in the coming five years. Islamic banking principles are similarto those of conventional banking, with the exception that Islamic banks must conform toSharia, or Islamic law. Islamic finance prohibits charging interest for the use of money,and disallows dealing in certain commodities. Islamic banking falls under four main

categories:

Murabiha: cost-plus financingi.e., buying a product from a supplier and sellingit to a customer for a profit; Musharraka: a profit sharing system that is similar to equity participation; Ijara: leasing; Istisna: the financing of construction or manufacturing.

Islamic banking attracts investors because of its profit potential, as well as its religiousand ethical approach. While the sector is still small, it has registered strong continualgrowth despite regional uncertainties that hindered growth in conventional banking.

Islamic Banking became an engine of growth in the Kingdom of Bahrain and continuesto attract high net-worth individual investors from GCC countries. This sector has grownby an average of 21 percent over the past three years. The Crown Prince and othergovernment officials have voiced Bahrain's commitment to developing the sector further.

Education and Training:

Regionally, Bahrain has always been a pioneer in the field of education, dating back to1919 when it was the first country in the Gulf to establish a system of formal education.In 2007, Bahrain had a 94.7 percent literacy rate among Bahraini males and an 86percent literacy rate among females, yielding a national literacy rate of 90 percent, the

highest in the region. The United Nation Development Programs (UNDP) HumanDevelopment Report for 2007 reported Bahrain as the most developed Arab state with aliteracy rate of 90 percent in 2007, higher than the GCC literacy rate of 85.1 percent.The issue of education has been crucial for Bahrain since independence. Statespending on education is $703.8 million, representing 10.3 percent of the entire $7.93billion state budget for 2007-2008. Ministry of Education employees account forapproximately 32 percent of all government employees.


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Rising demand has led to deficiencies in the state school system due to the fact themost parents prefer to send their children to private schools. A U.S. Department ofDefense-affiliated school and a number of private schools offer education in Englishwith an American-style curriculum.

Bahrain is home to two public universities and a number of private universities includingthe Royal College of Surgeons, New York Institute of Technology (NYIT), OpenUniversity, AMA International, and a number of educational institutions associated withthe Bahrain Institute of Banking and Finance (BIBF). Bahrain also has a wide range ofpublic and private training centers that concentrate on the technical, financial andtourism sectors.

Growth in the education sector is driven primarily by the establishment of new privateuniversities, which the Government supports in order to promote private highereducation in Bahrain.

The Crown Prince and BDF Commander-in-Chief launched a national reform initiative in2004 that is aimed at creating a new economic, labor, education and training vision forthe Kingdom. The Government of Bahrain is seeking to establish Bahrain as a regionalcenter for human resource development. Bahrain has over 50 training institutes thatoffer training in a variety of areas such as hospitality, information technology, businessstudies, English language studies, and banking. Specialist-training institutions includethe Gulf College of Hospitality and Tourism, the Bahrain International College of Health& Beauty, the Regional Institute of Advertising & Marketing, and the Bahrain Institute ofBanking & Finance. Major training institutes include the Bahrain Institute for Bankingand Finance (BIBF), Bahrain Training Institute (BTI), KPMG, and the British Council.

The Government of Bahrain (GOB) is taking the initiative to promote Bahrain as aregional education and training hub, since the educational and vocational trainingcurricula have been recently criticized recently for not adequately preparing Bahrainisfor the workforce. The government is making concerted efforts to turn this situationaround. As a part of this initiative the Ministry of Labor (MOL) is actively encouraginginternational education and training organizations to set up bases in Bahrain. With atotal investment of approximately $65 million, six new private universities have openedsince late 2006. Another new university for women opened in late 2005. The highgrowth in private education can be attributed to several factors, including: an increasednumber of full-time working adults seeking part-time internationally accredited degrees,private businesses looking for specialized courses for their employees, and greaterdemand for private education from neighboring countries like Saudi Arabia. Terroristincidents in Saudi Arabia during the first two quarters of 2004 enhanced Bahrainsappeal as a safe, liberal location for expatriates. Enrollment of both female and maleexpatriate students from neighboring Saudi Arabia in Bahraini schools has increased.


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Electrical Power:

For the past several years, the government was forced to implement a program oforganized, rolling brown-outs during the peak summer months due to a lack of capacity.

A one-day countrywide power failure occurred in summer of 2004 due to

mismanagement of power flow near the Alba aluminum manufacturing plant. ACanadian firm was awarded the contract to investigate the power failure. The studyshowed that both the Ministry of Electricity and Alba were both at fault for summer2004s power-outage, while discrediting the Ministrys capability in crisis managementcircumstances.

In June 2003, Ministry of Finance and National Economy (MOFNE) awarded Ernest &Young a contract to study the privatization of the power and water sectors. The currentinstalled government power generation capacity in Bahrain is 1,839 MW.

In 2006, the government sold their biggest power plant, Al Hidd for $738 million. In

2004, the first tender was awarded to establish the first private electrical plant called AlEzzal, an 800MW per day facility. In August of 2008 the government awarded a tenderto develop Al Dur Power Station to Gulf Investment Company.

Alba provides another 275 MW on standby from its 1,505 MW power station. Demandduring the peak summer months forces the government to draw on this regularly.Electricity consumption per capita in Bahrain is about 481 units a year. In 2007,domestic consumption accounted for 60 percent of demand, industries 19 percent, andcommercial establishments 21 percent. Some industries use natural gas to producetheir own power. Demand is growing by an average of 7.3 percent annually, and isprojected to outstrip even the expanded capacity from power upgrades and the secondphase expansion of Al Hidd power station. Already, plans have been announced for thethird phase, in which the Government will invest more than $400 million.

The Government created an Electricity & Water Commission to oversee the expansionof power production. In November 2004, Bahrains new and only private power plant, AlEzzel Power Company, completed a $380 million limited-recourse financing for theconstruction of the first-ever private power plant in Bahrain. The $500 million plantproduces more than 950MW of power per day. HSBC and Societe Generale led theloan, which also included ANZ, Bayerische Landesbank, Calyon, Gulf InternationalBank, ING, Mashreqbank, Mizuho, RBS and Standard Chartered. In August 2008, atender was awarded for the Development of Al Dur Electric and Water Plant to GulfInvestment Company.Demand is growing by an average of 7.3 percent annually. Thedemand power creates offers ample opportunities in Bahrains power sector.


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Water Desalination:

Bahrain is a desert island on the Zone C aquifer stretching all the way to Riyadh. Many

years of heavy demand in Saudi Arabia and Bahrain have significantly depleted theaquifer, threatening its long-term viability and allowing seawater to infiltrate. The "sweetwater" for which Bahrain was long famous is now brackish and requires treatmentbefore using it as drinking water or as process water for industry.

In 2008, Bahrain used 108 million gallons of water per day, or 38.2 billion gallons peryear. The local water supply comes mainly from non-renewable groundwater extraction.Supply barely exceeds demand; when routine maintenance work was performed inMarch 2007, there were rolling water shortages for several weeks. Two-thirds ofBahrains water is supplied through desalinization, and the remaining third comes fromthe underground aquifer. Approximately 78 million gallons, desalinated and blended, are

for drinking purposes. Industries, agriculture, and private gardens use the rest. Pilotprojects are underway to use treated effluent for irrigation. The Government aims tohave all agricultural water produced this way in the future.

The Commission program to upgrade Bahrain's desalination and effluent treatmentinfrastructure provides opportunities for U.S. companies. Increasingly, water and powerproduction are being integrated through the construction of dual-use plants like those inHidd and Manama. Water production through desalinization is an energy intensiveprocedure, making it ideal for integration with power generation facilities. TheGovernment subsidizes 55-60 percent of the cost of water to consumers.

Construction:

The construction sector has witnessed increasing activity and opportunity as the privateand public sectors undertake development projects. This activity coincides with a boomin the countrys real estate market. Large-scale government infrastructure projects tobuild roads, bridges, housing, airport expansions, and infrastructure to support theGrand Prix racing circuit have stimulated the sector throughout 2006 and into 2007.Furthermore, these development initiatives have had a spillover effect in supplyindustries.

In 2007/2008, the Government approved a strategic budget of $2.37 billion for special

infrastructure projects. The projects that come under this budget include: a new port andan industrial area in Hidd ($464 million); a Hidd power and water station ($283 million);housing ($273 million); a new hospital in Muharraq ($80 million) and an airport terminalexpansion ($51 million). All of these projects were scheduled to be complete by 2010.

The government increased transportation expenditure in 2008, building new flyoversnear Al Zinj, Sitra, Seef District, and near the Formula One Track.


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Poultry Meat:

U.S. poultry meat, particularly chicken parts and to a lesser degree whole chickens andturkey, are well known for their high quality. This past year witnessed a large influx of

brand-name chicken parts at very competitive prices. Brazil, France, Saudi Arabia andDenmark dominate the market for frozen whole chickens. Brazil and the U.S. dominatethe market for chicken parts. Whole chickens represent 90 percent of total chicken meatimports. The presence of U.S. and allied forces in Kuwait and Iraq, as well as the flow ofaid and other commercial shipments to Iraq, should continue to sustain or even increasedemand from all sources including the U.S. in 2006 and 2007.

BUSINESS TRAVEL

Business Customs:

Personal contact, frequently renewed, is key to doing business successfully in Bahrain.Visiting business professionals should be prepared to spend a portion of any businesscall socializing and getting to know their counterparts.

Most government offices operate Sunday through Thursday, and many companies arealso open half-days on Saturdays. Most commercial banks are open Sunday throughThursday. Employees of offshore financial institutions often follow a more Western

workweek. To encourage the financial sector, commercial banks started operating evenin Weekends to service their enormous client base.

Visa Requirements:

Entry visas for American citizens may be obtained upon arrival at the BahrainInternational Airport. U.S. holders of regular passports can obtain a two-week visa at theairport for 5 BD ($13) payable in Bahraini Dinars only. Entry visas can also be obtainedfrom the Bahraini Embassy in Washington, D.C., where a 5-year visa costs $50.

The General Directorate for Immigration and Passports developed a custom-made,

user-friendly electronic visa website. The website aims to speed the airport's visaprocessing method and also to attract tourists through this simplified and accessiblemethod. For more information, please visit: www.immigration.gov.bh/english/index-1.htm.An Israeli entry stamp in a passport is not a bar to obtaining a Bahraini visa or toentering Bahrain, but not all airline personnel are aware that the former prohibition nolonger applies.
http://www.immigration.gov.bh/english/index-1.htmhttp://www.immigration.gov.bh/english/index-1.htmhttp://www.immigration.gov.bh/english/index-1.htmhttp://www.immigration.gov.bh/english/index-1.htmhttp://www.immigration.gov.bh/english/index-1.htm


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Crime is generally not a problem in Bahrain. In the past there have been occasionalminor civil disturbances in various parts of the country. The U.S. Embassy advises

American citizens to avoid any disturbances or large gatherings in the streets, and toavoid travel into villages, if it is not necessary. Americans in Bahrain, as elsewhere,should maintain a high level of security awareness while following their daily business or

social routines in light of the global threat of terrorism. For regularly updated securitymore information, please visit the U.S. Embassy Bahrain's website athttp://www.usembassy.gov.bh/

Telecommunication:

All hotels are equipped with reliable phone and fax service, and many hotels alsoprovide Internet, wire services, and business and conference centers.The majority state-owned Bahrain Telecommunications Company (Batelco) providesexcellent telecommunications services for all sectors of the economy.

Telecommunications services in Bahrain employ fully digitized systems and state-of-the-art technology. Services provided by Batelco include direct dialing and fax transmissionto almost anywhere in the world, GSM mobile telephony, high-speed data circuits,integrated service digital networks (ISDN), and corporate messaging facilities. In amove to liberate the telecommunications sector, the Government of Bahrain in April2003 awarded a 15-year mobile telecommunications license to MTC-Vodafone. ZainTelecommunication (a consortium owned by UK's Vodafone and Kuwaiti and Bahrainiinvestors) began operations in late 2003, and in April 2007 announced that it hadcaptured 30 percent of Bahrains mobile market with plans to dominate 40 percent bythe end of mobile customers after the introduction of competition, Batelco announcedplans in June to invest $23.9 million in the companys mobile network, increasing itsmobile line capacity to over 550,000. As of September 2006, the TRA broke themonopolistic control of Batelco over Internet service provider (ISP) in Bahrain; offering,new technologies were introduced by companies such as MENA that covered the islandwith wireless internet connection in association with Motorola. MENATelecommunication Company managed to increase their customer base by 300 percentbecause of the newly introduced "smart Box" from Motorola (Wireless Network thatcovers land line, Fax, and the Internet.)

The Telecommunications Regulatory Authority (TRA), established in late 2002, awardedthe second mobile telecommunications services license to MTC-Vodafone, thus endingthe monopoly of Bahrain's telecom services provider, Batelco. The license was awardedunder the Telecommunications Law, which took effect January 2003. In January of 2009the TRA were successful in awarding a third mobile provider STC (SaudiTelecommunication Company) with a paid capital of $231 Million.

Telecommunications liberalization also extended to paging services, very small apertureterminal (VSAT), public access mobile radio services, international telecommunicationsfacilities, international telecommunications services, national fixed services, internet
http://www.usembassy.gov.bh/http://www.usembassy.gov.bh/http://www.usembassy.gov.bh/


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service provider (ISP) and value-added services license following the full liberalizationof the sector on July 1, 2004.

Transportation:

Bahrain has a well-developed road network. Well-lit, multi-lane highways cover thecountry. The 25-kilometer Bahrain-Saudi Causeway, which opened in November 1986,created many new commercial opportunities. Construction has begun on a network offuturistic superhighways with a series of flyovers to eliminate bottlenecks. Thesesuperhighways are part of a $530.9 million master plan to improve the countrys roadnetwork. The North Manama Corridor Improvement Plan involves the construction of theSeef and Pearl flyovers in Manama ($26 million). Another Flyover in the Seef District($18 million) opened up in December of 2008.

Rental cars are readily available, but an International Driving License is required andmust be validated in Bahrain. Major car rental firms will help qualified clients obtain a

temporary Bahraini driving license. Cabs are easy to find in downtown Manama. Mostmajor roads are three to six-lanes and are well maintained. In the older parts ofManama, Muharraq, and in villages, many streets are narrow, twisting, and sometimesin relatively poor condition. Traffic is congested in some areas of Manama and the SeefMall. Drivers should exercise caution at the roundabouts (traffic circles) found at manymajor intersections. Radar and speed detection cameras are installed near some trafficlights. Travel at night is more hazardous. Defensive driving is recommended.

Local Times, Business Hours and Holidays

Bahrain is seven hours ahead of Eastern Standard Time (or eight hours ahead ofEastern Daylight Savings Time). The private sector normally operates from 8:00 a. m. 5:00 p.m., Sunday-Thursday. Financial institutions operate from 8:30 a.m. 5:30 p.m.,Sunday-Thursday. The public sector operates from 7: 15 a.m. 2:15 p.m., Sunday-Thursday. The private sector follows the Bahrain Chamber of Commerce and Industrys(BCCI) local, national, and religious observations. Financial institutions follow theCentral Bank of Bahrain (CBB), and the public sector follows the GOBs local andreligious holiday observations.


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Water Report in the Kingdom of Bahrain

Bahrains local water supply comes mainly from non-renewable ground water. Two-

thirds of Bahrains water is supplied through desalinization, and the remaining third

comes from underground aquifers. The groundwater comes in through lateral under-

flow from the Dammam aquifer, which is part of an extensive regional aquifer system.

However, the heavy increase of water demand in Bahrain has significantly depleted the

aquifer, threatening its long-term viability and allowing sea water to infiltrate. The "sweet

water" for which Bahrain was long famous is now brackish and requires treatment

before being used as drinking water or as process water for industry. More than half of

the countrys water is provided by the Hidd independent water and power plant (IWPP),

with just 15% of consumption provided by ground water in 2008. Desalinated water now

accounts for more than 80% of Bahrains water provision.

In 2010, Bahrains water consumption was 113 million gallons per day, or 41 billion

gallons per year. In September 2009, the Higher Commission of Electricity and Water

announced that it expected water consumption in Bahrain to reach an estimated 135

million gallons per day by 2015. Current water project initiatives in the Commission

budget involve the new Dour water production plant, a water pipeline from ALBA, and

plant expansion for the Ras Abu Jarjur water desalination facility. The Ras Abu Jarjur

expansion is expected to yield an additional 16 million gallons of water per day. In

August 2007, however, the Commission submitted a request to the Cabinet to approve

a $56 million budget to complete the Dour plant by the next year. ALBA alreadysupplied an estimated 7 million gallons per day to the national water network, and was

expected to increase its supply to 9 million gallons by the end of 2008.

The Electricity and Water Authority (EWA) is the agency responsible for the production

and supply of power and water in Bahrain, working as an independent arm of the state.

It has successfully pushed for the development of IWPPs, with the commissioning of the

Hidd phase three and now the award of the Al Dur IWPP contract. The kingdom has

also drafted a national policy for wastewater, including reuse of treated sewage

effluence. A major boost to wastewater treatment capacity will come with the

development of the Muharraq wastewater plant, which will have a 100,000-150,000m3

per day (m3/d) capacity. The Electricity and Water Authority has also made

improvements in increasing the coverage of sanitation and sewage connection to 88%

of the islands population and is on target to reach full coverage by 2015.


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Bahrains Five Main Desalination Plants

1. The Hidd Power and Water Plant, located in the south of the island of Muharraqand within proximity of Manama, has the largest desalination capacity in the country and

uses multi-stage flash (MSF) Technology. With an original production capacity of136,000 m!/d, it underwent an expansion program in 2006-2008 which enabled it toproduct another 273,000 m!/d, bringing the total capacity to an estimated 409,000 m!/d.Officials from the EWA indicated that in late 2008 the plant was already producing273,000 m!/d, and that the remaining 136,000 m!/d would become available in early2009 once a final round of testing was completed. The Hidd plant now also includes apotabilisation plant, which means that it will no longer require blending with brackishgroundwater. The facility is operated by the Hidd Power Company (HPC), a consortiumof International Power (40%), GdF Suez Energy International (30%) and SumitomoCorporation (30%), on a build-own-operate (BOO) basis. The consortium acquired all ofthe Hidd assets in 2006 in a $1.25 billion deal that included the cost of the 273,000 m !/d

expansion mentioned above.

2. Ras Abu Jarjur is another desalination plant, located on the eastern seaboardand currently produces around 73,000 m!/d using groundwater, not seawater.

3. The Sitra Power and Water Plant is the oldest in the country, having beenoriginally commissioned in the 1970s. It produces 114,000 m!/d of distilled water. This isblended with groundwater before entering into the main supply network.

4. The large Aluminum Bahrain (Alba) plant, located to the south of Manama,also produces desalinated water as a by-product of its other operations. According tothe EWA, production of desalinated water was 9 million m! in 2007, an average of24,700 m!/d.

5. The Al Dur Power and Water Company, is the most recent major waterdesalination plant in Bahrain. It was founded in 2010 to deal with the growing demandfor potable water in Bahrain. The plant has a maximum output of 48 million gallons peryear, and has been producing an average of 218,000 m!of potable water per day.


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Water Consumption by Month000,000 Gallons(1997-2007)

Month

Year

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Jan. 1,981 1,960 2,018 2,077 2,195 2,304 2,478 2,619 2,737 2,843 2,909

Feb. 1,806 1,749 1,731 1,953 2,069 2,052 2,244 2,488 2,479 2,613 2,616

Mar. 1,933 1,991 2,001 2,148 2,380 2,366 2,575 2,755 2,808 2,948 3,079

Apr. 1,965 2,035 2,083 2,231 2,383 2,363 2,555 2,701 2,946 2,932 3,072

May 2,144 2,197 2,224 2,408 2,546 2,591 2,786 2,905 3,051 3,141 3,234

June 2,111 2,180 2,190 2,474 2,538 2,615 2,789 2,862 3,008 3,154 3,232

July 2,230 2,270 2,310 2,561 2,719 2,747 2,989 2,974 3,111 3,276 3,369

Aug. 2,186 2,247 2,308 2,573 2,707 2,750 2,879 2,970 3,108 3,259 3,369

Sept. 2,129 2,184 2,235 2,446 2,569 2,686 2,794 2,947 3,018 3,200 3,295

Oct. 2,170 2,227 2,258 2,421 2,612 2,735 2,848 2,997 3,009 3,277 3,336

Nov. 1,914 2,077 2,133 2,272 2,523 2,605 2,700 2,857 2,859 3,082 3,208

Dec. 1,989 2,087 2,133 2,367 2,525 2,568 2,658 2,744 2,908 2,936 3,236

Total 24,565 25,204 25,663 27,931 29,766 30,382 32,204 33,820 34,941 36,661 37,954


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Daily Average Consumption by Month000,000 Gallons(1997-2007)

Month

Year

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Jan. 63.91 63.24 64.94 67.00 70.80 74.33 79.93 84.49 88.29 91.72 94.12

Feb. 64.52 62.46 61.82 67.33 73.89 73.29 80.15 85.79 88.52 93.31 93.42

Mar. 62.38 64.23 64.54 69.28 76.78 76.34 83.05 88.88 90.34 9508 99.32

Apr. 65.53 67.85 69.45 74.38 79.42 78.77 85.15 90.04 94.89 97.72 102.39

May 69.19 70.86 71.75 77.66 82.12 83.59 89.87 93.71 98.43 101.34 104.32

June 70.37 72.65 72.97 82.45 84.59 87.19 92.97 95.41 100.26 405.13 107.72

July 71.97 73.23 74.51 82.63 87.71 88.62 93.49 95.93 100.35 105.69 108.69

Aug. 70.52 72.49 74.44 83.00 87.33 88.73 82.88 95.81 100.35 105.12 108.69

Sept. 70.98 72.79 74.49 81.53 85.62 89.55 93.13 98.22 100.81 106.67 109.85

Oct. 70.03 71.83 72.83 78.10 84.26 88.25 91.88 96.68 97.25 105.70 107.61

Nov. 63.82 69.22 71.09 75.74 84.08 86.86 90.00 95.24 95.40 102.74 106.94

Dec. 64.58 67.33 70.27 76.34 81.46 82.84 85.75 88.53 93.87 94.72 104.37

Annual

Avg.

64.19 69.05 70.31 76.31 81.50 83.20 88.19 92.39 85.73 100.41 103.95


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Water Production000,000 Gallons(1997-2007)

YearProduction

Total

Distilled Water Underground

1997 12,710 11,866 24,576

1998 13,207 11,995 25,202

1999 13,480 12,183 25,663

2000 17,881 10,049 27,930

2001 19,823 9,942 29,765

2002 20,108 10,279 30,387

2003 21,687 10,425 32,111

2004 23,255 10,622 33,877

2005 24,500 11,200 35,700

2006 26,116 10,569 36,684

2007 29,101 8,896 37,991


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Important Contacts

Electricity and Water Authority- Kingdom of Bahrain

Electricity and Water Authority BuildingKing Faisal Street

Diplomatic Area

P.O. Box 2

Manama, Bahrain

Phone: +973 17-546666

Fax: +973 17-533035

Web:http://www.mew.gov.bh/

Names of the top officials at the Electricity & Water Authority

Name Position Tel. Fax

H.E. Abdul Hussain Bin Ali

Mirza

Minister of Electricity & Water

Affairs17546777 17537151

Dr. Abdulmajeed Al-Awadhi Chief Executive 17546888 17533035

Sh. Nawaf Bin Ibrahim Al-KhalifaVice Chief Executive,

Administrative & Financial Affairs

1754699917532788

Batool Ali AbdulAal

Vice Chief Executive,

Electricity & Water Production &

Transmission

1754690017533452

Dr. Khalid BurashidVice Chief Executive,

Planning & Projects17546700 17532786

Jaffar Al-QassabDirector, Finance Resources &

Services17546380 17530080
http://www.mew.gov.bh/http://www.mew.gov.bh/


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Commercial Section, U.S. Embassy Bahrain

Bldg 979, Road 3119, Block 331

Zinj, Bahrain

http://www.buyusa.gov/bahrain

Phone: 973-1-7242746

Email:[email protected]

Bahrain Customs

P.O. Box 15Manama Kingdom of BahrainTel: +(973) 17-725333Fax: +(973) 17-727556Website: http://www.bahraincustoms.gov.bh/E-mail:[email protected]

Standards and Metrology Directorate

Ministry of Industry and CommerceP.O. Box 5497Tel: +(973) 17-523030Fax: +(973) 17-530730Website: www.commerce.gov.bhE-mail: [email protected]

Rana SalloomDirector, Electricity & Water

Conservation17576595 17212559

Sami Buhazza Director , Projects 17546304 17541185

Ebrahim Al-Kaabi Director, Water Production 17832100 17830146

Ali Redha Husain Director, Water Transmission 17875888 17875803

Abdulghani Khalaf Director, Water Distribution 17389800 17553718

Khalid Ebrahim Al MansoorDirector, Public & International

Relations17546767 17541182
http://www.buyusa.gov/bahrainmailto:[email protected]:[email protected]:[email protected]:[email protected]://www.buyusa.gov/bahrain


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Al Hidd Water and Power Plant

Building 303, Street 13, Block 115Al Hidd, BahrainP.O. Box 50710Tel: +973 17-679479

Fax: +973 17-679429Website:www.hpc.com.bh

Contact:Name: Simon WestawayTel: +973 17-679407

Related Websites

U.S. Government Websites:

Commercial Section, U.S. Embassy Bahrainhttp://www.buyusa.gov/bahrainEmail: [email protected]: +973 17242746Mailing Address: Bldg 979, Road 3119, Block 331, Zinj. Kingdom of Bahrain.

U.S. Embassy, Bahrainhttp://www.usembassy.gov.bh/

Email:[email protected]

Tel: +973 17276180Mailing Address: Bldg 979, Road 3119, Block 331, Zinj. Kingdom of Bahrain.

U.S. International Trade Administration (ITA)http://www.ita.doc.gov/Tel: 1800-USA-TRAD(E)Mailing Address: 140 Constitution Ave NW, Washington, DC, 20230

U.S. Commercial Servicehttp://www.export.gov/comm_svc/

Department of Commercehttp://www.export.doc.gov/

Department of Energyhttp://www.energy.gov/

Export-Import Bankhttp://www.exim.gov/
http://www.hpc.com.bh/http://www.buyusa.gov/bahrainhttp://www.buyusa.gov/bahrainhttp://www.usembassy.gov.bh/http://www.usembassy.gov.bh/mailto:[email protected]:[email protected]:[email protected]://www.ita.doc.gov/http://www.ita.doc.gov/http://www.export.gov/comm_svc/http://www.export.gov/comm_svc/http://www.export.doc.gov/http://www.export.doc.gov/http://www.energy.gov/http://www.energy.gov/http://www.exim.gov/http://www.exim.gov/http://www.exim.gov/http://www.energy.gov/http://www.export.doc.gov/http://www.export.gov/comm_svc/http://www.ita.doc.gov/mailto:[email protected]://www.usembassy.gov.bh/http://www.buyusa.gov/bahrainhttp://www.hpc.com.bh/


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http://www.bma.gov.bh/

Ministry of Transportation (MOT)(Covers public transportation, telecommunications, postal services, and civil aviation)http://www.transportation.gov.bh/

Telecommunication Regulatory Authority (TRA)http://www.tra.org.bh/

Bahrain Internet Exchange (BIX)http://www.bix.bh/

Ministry of Municipalities and Agriculture (MOMA)http://www.municipality.gov.bh/

Bahrain Tenders Board

http://www.bahraintenders.gov.bh/

Bahrain Tourism Directoratehttp://www.bahraintourism.com/

Bahrain International Circuit (BIC)http://www.bahraingp.com.bh/

Bahrain Convention and Exhibition Center (BCEB)http://www.bahrainexhibitions.com/

Survey and Land Registration Bureauhttp://www.slrb.gov.bh/

Immigration and Passport Directorate, Ministry of Interior (MOI)http://www.immigration.gov.bh/

General Traffic Directoratehttp://www.traffic.gov.bh/

Civil Aviations Directorate and Bahrain International Airporthttp://www.bahrainairport.com/index_web.htm

Bahrain Ports Directoratehttp://www.bahrainports.gov.bh/

Bahrain Customs Directoratehttp://www.bahriancustoms.gov.bh/

Bahrain E-Visa Services
http://www.bma.gov.bh/http://www.bma.gov.bh/http://www.transportation.gov.bh/http://www.transportation.gov.bh/http://www.tra.org.bh/http://www.tra.org.bh/http://www.bix.bh/http://www.bix.bh/http://www.municipality.gov.bh/http://www.municipality.gov.bh/http://www.bahraintenders.gov.bh/http://www.bahraintenders.gov.bh/http://www.bahraintourism.com/http://www.bahraintourism.com/http://www.bahrainexhibitions.com/http://www.bahrainexhibitions.com/http://www.slrb.gov.bh/http://www.slrb.gov.bh/http://www.immigration.gov.bh/http://www.immigration.gov.bh/http://www.traffic.gov.bh/http://www.traffic.gov.bh/http://www.bahrainairport.com/index_web.htmhttp://www.bahrainairport.com/index_web.htmhttp://www.bahrainports.gov.bh/http://www.bahrainports.gov.bh/http://www.bahriancustoms.gov.bh/http://www.bahriancustoms.gov.bh/http://www.bahriancustoms.gov.bh/http://www.bahrainports.gov.bh/http://www.bahrainairport.com/index_web.htmhttp://www.traffic.gov.bh/http://www.immigration.gov.bh/http://www.slrb.gov.bh/http://www.bahrainexhibitions.com/http://www.bahraintourism.com/http://www.bahraintenders.gov.bh/http://www.municipality.gov.bh/http://www.bix.bh/http://www.tra.org.bh/http://www.transportation.gov.bh/http://www.bma.gov.bh/


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http://www.evisa.gov.bh/

Shura or Consultative Council (Upper House of the National Assembly)http://www.shura.gov.bh/

Al Nuwab or Council of Representative (Lower House of the National Assembly)http://www.nuwab.gov.bh/

Legal Affairs Directoratehttp://www.bahrain.gov.bh/legalaffairs/

Ministry of Education (MOE)http://www.education.gov.bh/

Ministry of Labor (MOL)http://www.bah-molsa.com/

Pension Fund Commission (PFC)(Public Sector Retirement Planning Commission)http://www.pfc.gov.bh/

General Organization for Social Insurancehttp://www.gosi.org.bh/Bahrain Center for Studies and Research (BCSR)http://www.bcsr.gov.bh/

Bahrain Civil Service Bureau (CSB)http://www.csb.gov.bh/

University of Bahrain (UoB)http://www.uob.bh/

Bahrain Training Institute (BTI)http://www.bti.com.bh/

Bahrain Internethttp://www.inet.com.bh/

Bahrain Television (BTV)http://www.bahraintv.com/

Private Sector:

Akhbar Al Khaleej Newspaperhttp://www.akhbar-alkhaleej.com/
http://www.evisa.gov.bh/http://www.evisa.gov.bh/http://www.shura.gov.bh/http://www.shura.gov.bh/http://www.nuwab.gov.bh/http://www.nuwab.gov.bh/http://www.bahrain.gov.bh/legalaffairs/http://www.bahrain.gov.bh/legalaffairs/http://www.education.gov.bh/http://www.education.gov.bh/http://www.bah-molsa.com/http://www.bah-molsa.com/http://www.pfc.gov.bh/http://www.pfc.gov.bh/http://www.gosi.org.bh/http://www.gosi.org.bh/http://www.bcsr.gov.bh/http://www.bcsr.gov.bh/http://www.csb.gov.bh/http://www.csb.gov.bh/http://www.bti.com.bh/http://www.bti.com.bh/http://www.inet.com.bh/http://www.inet.com.bh/http://www.bahraintv.com/http://www.bahraintv.com/http://www.bahraintv.com/http://www.inet.com.bh/http://www.bti.com.bh/http://www.csb.gov.bh/http://www.bcsr.gov.bh/http://www.gosi.org.bh/http://www.pfc.gov.bh/http://www.bah-molsa.com/http://www.education.gov.bh/http://www.bahrain.gov.bh/legalaffairs/http://www.nuwab.gov.bh/http://www.shura.gov.bh/http://www.evisa.gov.bh/


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Al Ayam Newspaperhttp://www.alayam.com/

Al Wasat Newspaperhttp://www.alwasatnews.com/

Al Meethaq Newspaperwww.almeethaq.net

Gulf Daily News (GDN)http://www.gulf-daily-news.com/

Bahrain Tribune (BT)http://www.bahraintribune.com/

Arabian Exhibition Management (AEM)

http://www.aeminfo.com.bh/

Reflectionshttp://www.reflectionsbh.com

AIFG/International Fairs Grouphttp://www.amadeusifg.com

Mice Management W.L.L.http://www.mice-management.com/

Golden Tulip Hotelhttp://www.Golden Tulip.com/

Diplomat Radisson SAS Hotelhttp://www.diplomatrdsas.com.bh/

Regency Intercontinental Hotelwww.intercontinental.com/manama

Sheraton Hotelhttp://www.sheraton.com/bahrain

Gulf Hotelhttp://www.gulfhotelbahrain.com/

Crowne Plaza Hotelhttp://www.crowneplaza-bahrain.com/

Ritz Carlton Hotel
http://www.alayam.com/http://www.alayam.com/http://www.alwasatnews.com/http://www.alwasatnews.com/http://www.almeethaq.net/http://www.almeethaq.net/http://www.gulf-daily-news.com/http://www.gulf-daily-news.com/http://www.bahraintribune.com/http://www.bahraintribune.com/http://www.aeminfo.com.bh/http://www.aeminfo.com.bh/http://www.reflectionsbh.com/http://www.reflectionsbh.com/http://www.amadeusifg.com/http://www.amadeusifg.com/http://www.mice-management.com/http://www.mice-management.com/http://www.diplomatrdsas.com.bh/http://www.diplomatrdsas.com.bh/http://www.intercontinental.com/manamahttp://www.intercontinental.com/manamahttp://www.sheraton.com/bahrainhttp://www.sheraton.com/bahrainhttp://www.gulfhotelbahrain.com/http://www.gulfhotelbahrain.com/http://www.gulfhotelbahrain.com/http://www.sheraton.com/bahrainhttp://www.intercontinental.com/manamahttp://www.diplomatrdsas.com.bh/http://www.mice-management.com/http://www.amadeusifg.com/http://www.reflectionsbh.com/http://www.aeminfo.com.bh/http://www.bahraintribune.com/http://www.gulf-daily-news.com/http://www.almeethaq.net/http://www.alwasatnews.com/http://www.alayam.com/


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http://www.ritzcarlton.com/

Movenpick Hotelhttp://www.moevenpick-group.com/

Novotel Hotelhttp://www.novotel.com/

Aluminum Bahrain (Alba)http://www.albasmelter.com/

Bahrain Telecommunications (Batelco)http://www.batelco.com/

MTC-Vo

Documents

110913 Bahrain TIP and Water Report