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(Last updated: 23 Apr 2008)
Current business situation
The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Bahrain. This is regularly updated, and should be checked before planning travel.
Individuals should take sensible precautions and ensure that travel documentation, including passports and any necessary visas, for themselves and their dependents are valid and up-to-date.
It is recommended that Australians visiting the region register with the nearest Australian Embassy (see relevant travel advisory for Bahrain). To register on line visit: www.orao.dfat.gov.au.
Austrade advises Australian companies with ongoing business in Bahrain to maintain contact with their business partners and to clarify with their freight forwarders that the usual commercial arrangements still apply.
Austrade offices in Riyadh and Jeddah, which have responsibility for Bahrain are open and fully operational.
Australian companies undertaking business in Bahrain who are unable to travel to meet with their customers and business partners may wish to contact Austrade regarding commercial problems or issues they are facing in the Middle East.
All enquiries should be directed to telephone: 13 28 78 (in Australia) or email: info@austrade.gov.au.
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| Capital city: |
Manama |
| Surface area: |
700 sq km |
| Population: |
800,000 |
| Official language(s): |
Arabic |
| Head of State: |
H.M. Sheikh Hamad bin Isa Al-Khalifa |
| Head of Government: |
H.H. Prime Minister Sheikh Khalifa bin Sulman Al-Khalifa |
| Australian exports to Bahrain: |
A$134 million |
| Australian imports from Bahrain: |
A$114 million |
| Bahrain's principal export destinations: |
Saudi Arabia, USA, India |
| Bahrain's principal import sources: |
Japan, Saudi Arabia, Australia | (Source: Department of Foreign Affairs and Trade - Country economic fact sheet)
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Although the oil sector contributes only about one-eighths of GDP, oil sales provide over 60 per cent of government revenue and they remain significant in an economy where public expenditure is a powerful force. Other major industries are aluminium smelting, offshore banking and tourism.
The government recognises the necessity of continuing to provide the right investment climate to compete for the flow of foreign direct investment funds to continue to broaden the country's economic base.
Key economic indicators and statistics for 2007:
- GDP – US$16.9 billion
- GPD per capita – US$22,109
- Real GDP growth – 6.8 per cent
- Inflation – 2.9 per cent
(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)
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Politicial climate
Bahrain won its independence from Britain in 1971 and has been a monarchy since that time. The King, HM Sheikh Hamad bin Isa Al-Khalifa is pushing economic and political reforms. A referendum on political reforms was held in February 2001, which resulted in a unanimous approval and will form a step forward towards building of democracy. The Al Khalifa family in consultation with a Council of Ministers governs Bahrain. |
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Trade relations and statistics
The six countries of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) have announced the formation of a Customs Union that is currently being phased in over the next few years. Reports have indicated that the Union will eventually eliminate all fees, taxes, customs and other obstacles to trade between the member countries. A standard tariff of five per cent will then apply to most imports from countries outside the GCC Customs Union.
A preliminary assessment of the customs union, based on available reporting indicates that:
- The standardisation of customs requirements and procedures will benefit exporters active in multiple GCC markets.
- The tariff will eventually be applied at any port of entry to the customs union, which will positively impact on exporters of transhipped goods - who may now pay only one customs duty.
- The tariff of five per cent is significantly lower than that currently applied in some GCC markets, but is also higher than that applied in others, with mixed implications for Australian exporters.
- It is likely that many goods currently exempt (particularly basic foodstuffs and manufacturing inputs) will maintain their duty-free status (where it currently exists). Though some goods currently exempt from duty may have a five per cent duty imposed on them.
- A list of products will be exempt from the maximum five per cent tariff to protect local GCC industry. Restrictions on passage of certain products through GCC countries will also apply. For example it is currently a requirement for meat products exported from Australia to Saudi Arabia be shipped direct (with transhipment through Singapore only being allowed).
- Australian exporters will not be disadvantaged vis-à-vis competing international suppliers. GCC country suppliers will enjoy a five per cent tariff advantage vis-à-vis Australian and other overseas competitors in those product areas where competing GCC suppliers exist. Very few products from Australia compete with GCC countries and so Australia’s competitive position - even if a duty is applied - should not be affected to any significant degree.
There remain a number of issues yet to be resolved between the six member states. In the short-term, exporters are advised that import requirements and procedures for many GCC markets remain unaffected. Transition periods of two years or more exist on a range of industries. Transition periods also exist for the implementation of general product, and food safety standards, with a genuine common market not anticipated until 2007.
In the longer-term, Australian exporters will be required to develop greater brand recognition and uniformity in and between GCC markets and will have to guard against pricing disparities between GCC markets which might trigger competition among different GCC agents and distributor.
The Customs Union will promote trade and investment in the Gulf countries and is expected to continue to provide opportunities for Australian exporters. The Customs Union will promote trade and investment in the Gulf countries and is expected to continue to provide opportunities for Australian exporters.
It is also recommended that exporters check with their customers in GCC countries, and shipping agents to verify customs requirements.
Major Australian exports to Bahrain (2006-07):
- Passenger motor vehicles – A$50 million
- Live animals – A$37 million
- Cheese and curd – A$7 million
- Specialised machinery – A$5 million
Major Australian imports from Bahrain (2006-07):
- Aluminium – A$49 million
- Fertilisers (excluding crude) – A$32 million
- Wire products – A$30 million
- Textile yarn – A$1 million
(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)
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