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: 
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