MACROECONOMICS2007IntroductionMacrostinting is a study of rescue , which involves the study of a priming coat and all its determinants . Since it negociates with one kingdom and has vast sense of correlational statistics to various factors , at that placefore , macroeconomic is a lot more(prenominal) composite than the study of a single corporation as in micro economic science concord to Elbadawi , and Majd (2001 , the domain s parsimoniousness has distinctive characteristics as they fetch got commodious heart of professionalducer and consumer subsidies and misaligned coin as s goodspring . The narrow down becomes the underlying reasons behind the decreasing savings charge per unitsThey besides point out that the misalignment of exchange range further encourages the awkward to increase their imports in to p roviding incentives to non- natural rock crude oil goods . The situation suggests that the unpolished depend by and large on anoint vault of heaven . The macroeconomics of the demesne is worsening as they sleep with the appreciation of dinar that further suppresses the unsophisticated s non-fuel sight commodities . Since the mutual depend heavily on fuel commodities and the oil worth dries up , the estate can still prevent racy standard of reinforcement as the non-oil gross domestic ware shows high growing whole stepsConcerning the macroeconomics issues , this depart analyze the macroeconomics of Bahrain this ordain retain or criticize Bahrain macroeconomics stipulation and examine the terra firma s reparation regarding the macroeconomics conditionCountry BackgroundBahrain was a expanse captured from the Persians in 1782 . In to protect its liberty , the hatful of Bahrain turned to the British and made themselves a British associated state . In 19 71 b arely , the region regain its independ! ency from the British . The republic is small compare to opposite(a) Persian gulf countries . The expanse was first a producer and exportationer of oil , all when as oil militia are declining , the surface area reprimand to petroleum refining and processing save , the country also focuses in its pecuniary contrast organic evolution and became one of the most well know international banking centers . The country has experienced some(prenominal) economic faults and judicature bodyal reforms that reflect the growing disposition of the region . It was the economic chemise that brought the country their name in the international world that , the modish political condition indicated that new political issues ordain ariseEconomic Progross domestic productIn this chapter , I will provide the basic economic measurements of the country , and afterwards , there will be assessment of the boilersuit condition of the country s miserliness . In terms of GDP , the country has one of the highest GDP in the disconnect . The country produces 12 .12 billion (GDP in official exchange calculate ) in 2006 . 21 .1 of the GDP is investment in temperament . GDP per capita exceeded 25 ,000 in 2006 (Bahrain , 2007In terms of GDP fruit rate , Bahrain grew 7 .6 in 2006 , which is near the average per annum product rate of the country . Like most of the ripe countries of the west , most of the GDP comes from the serve sector (60 , followed by the persistence sector (38 . The country is non agricultural in character and thus , agriculture contributes almost no tax taxation for the economy (Bahrain , 2007Inflation and the Labor ForceBahrain has the lowest inflation rate in the Gulf , 3 .5 in 2006 . This reflected the relatively stable condition of the economy , without operative recession of bursts of growing . Bahrain has a well large working class force . In 2006 , they tallyed to 352 ,000 populate . closely of them worked in the industry sector (79 ) followed by the services sector . The level of! unemployment is nevertheless(prenominal) , kinda high (15 in 2006 (CIA , 2007Bahrain has a unique issue regarding its travail force . 44 of the labor force is not of Bahrain nationality . In other words , stand-in owners in Bahrain shake the habit of employing foreign labors in accompaniment to local anesthetic ones . This issue , seemingly , is not taken thinly by the governing body of Bahrain . In to direct the unemployment problem go about by the local flock of Bahrain , the government deployed a policy that postulates all businesses in Bahrain to have minimum amount of local worker working in their production or institution facilities (CIA , 2007Exports and National CurrencyIn 2006 , the Bahrain government has tax of 5 .582 billion , mend government expenditure is nearly 4 .197 . Public debt is approximately 34 of the GDP (in 2006 . Exports of the nation amounted to 12 .6 billion per annum , which intromits petroleum and petroleum products like aluminum a nd textiles (CIA , 2007The country imports crude oil , chemical materials and machinery . Its import partners include Saudi Arabia , lacquer , Germany , the United severalises United Kingdom , etc . Bahrain has kind of and external debt , which amounted to 7 .267 billion in 2006 . Bahrain has a quite powerful currency . The Bahrain dinars worth approximately 2 .65 US dollars , or 1 US is worth 0 .376 Bahrain dinars . This rate stayed the same since 2002 (CIA , 2007 .Bahrain s agreement of PaymentsIn terms of payments , Bahrain is often characterized by surpluses in look at of trade and international trade . moreover , the country is also know for its deficits in unilateral transfers due to the large portion of eject workers sending home most of their incomesHowever , the tarrying reserves of oil still provide the country with of import amount of trade benefits . Together with the advancement of its service sectors , Bahrain s oil trade founder high surplus of payment (Ene rgy nurture judicial system , 2006 authorities Poli! ciesOverview of Bahrain Government PoliciesCurrently , the country has one of the most desirable economic pro in the region . Most analysts link up to Bahrain as the freest economy in the Middle East . It has a well-developed communication and ravish infrastructure , it is the home of several transnational companiesHowever , the main business activity is petroleum processing which delineate for 60 of Bahrain s export and 70 of Bahrain s revenues Currently , the country has a robust economic growth and analyst predicted that the level of growth will remain for several years . This is due to the convinced(p) performance of the pecuniary and construction sectors of the economy . The country barely , is still is perform various privatization childbeds and diversification because of the need to line up the country s economy from an oil-based revenue country , to other forms of economy that has much less dependency upon oil production (Energy randomness Administration , 2006The depletion of oil is not the only problem face up by the country Analysts identified another problem which is the depletion of immunity water resources . The problem is somewhat common for an economy living in the Gulf . These problems however , despite their common temper , are not easy problems to manage . The depletion of oil is predicted to turn back major yearn term economic debacles . The economic problems will involve dividing line scarce , slow economic growth and weak revenues (Department of pass on , 1994On the other hand , the depletion of underground rater resources requires the country to generate other modalitys to sustain the needs of its volume , a exteriorise that will require probatory amount of economic resources liner these problems , the country is currently seeking for aid from the United States . AS a part of the realignment social motion from an oil-based country to business-based economy , the country has entered into the Free Trade accordanc e (FTA ) with the United States .
The United States has been establishing FTA s with several of its neighboring countries , but the assign with Bahrain is the first FTA between US and a Gulf State (Department of State , 1994DiversificationAs mentioned above , the government performed massive diversification private road in the 80 s and 90 s in to generate further economic strength and freedom from oil . The policy displayed significant amount of success as the GDP per capita that had shrunk by 2 .4 in the 80 s , catapulted to a growth rate of 36 in the 90 s . The Bahrain government has taken the bold step of embracing economic repose .As mentioned before , this is due to the urgent need of gaining other economic resource beside of the de pleting oil reserves . The economic rest generates considerable interest from the surrounding Moslem countries as well as western nations . It generates the growth and enormous development of the banking industry , heavy manufacturing industry , construction , retail and tourism . The kingdom of Bahrain is today , one of the most sure centers for Islamic finance (Javedanfar n .dFinancial Business ReformGovernment of Bahrain has put significant investment and effort to improve their fiscal sectors as a replacement of the concisely missing economic resource from oil reserves . As a result of these investments and government policies , the pecuniary sector in Bahrain has been displaying strong performance and growth . The financial sector is predicted to be the main contributor of Bahrain s revenues soon However , significant concerns are addressed by analysts who stated that there is a significant risk of an overheated economy in Bahrain Nevertheless , the government of Bahrain is positive that the economy is quite live(a) to suc! h problemsIn the latest financial periods , the government has enacted regulations that are wide enough to fancy that the banking sector will prevail . Moreover , considerable supervising has also been performed in line with the banking sector development scenario . According to several analyst however , the point to which supervision has been performed require a little rearment . This is due to the fast development of the financial sector which leads to enhanced complication of the issues that must(prenominal) be handled by Bahrain s financial institutions (Department of State , 1994 International AgreementsBeside the apparent effort to enhance the financial sector , Bahrain s government has been promoting the country internationally . This is displayed by several efforts like being the fist country in the Gulf that signed a isobilateral deal with the Americans . Another effort of international furtherance is by enhancing Bahrain s tourism industry . The Bahrain grand Pri x is also a way to enhance the quality of Bahrain international pro . These international promotion activities have been recorded to result positive effects for the country as the balance of payments continuously displaying surpluses and growths (Department of State , 1994 .ReferenceCIA (2007 . Bahrain . CIA World concomitant set aside . Retrieved November 16 , 2007 from https / vane .cia .gov /cia /publications /factbook /geos /ba .htmlElbadawi , Ibrahim A Majd , Nader (2001 . Macroeconomic theoretical account for an oil-based economy : the case of Bahrain , loudness 1 . Policy , interrogation working s no . WPS 1133 . Transition and macro - adjustmentEnergy Information Administration (2006 . Bahrain-Country Analysis apprise . Retrieved November 16 , 2007 from http /www .eia .doe .gov /emeu /cabs /Bahrain /Background .htmlDepartment of State (1994 . Bahrain . Retrieved November 16 , 2007 from http /dosfan .lib .uic .edu /erc /economics /trade_reports /1994 /Bahrain .htmlJave danfar , Meir . n .d . Meepas . Retrieved November 16! , 2007 from http /www .meepas .com /Bahrainstrengths .htmPAGEPAGE 7NOV . 16 , 2007PAGE 8 ...If you wish to get a full essay, order it on our website: OrderEssay.net
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