The latest round of official statistics point to a growing—and welcome—diversification for the Bahrain economy. Until now, the lack of diversification and high jobless rates were the twin factors undermining growth.
The oil and gas sector had a 44% share of the GDP in 2000 and dropped to 20% in 2014. Still, the low level of oil prices should further reduce the role of the petroleum sector in the economy at large, Albawaba reported.
Yet, this figure somehow downplays another part of the petroleum sector, namely oil refining. The process of refining crude oil into petroleum products like jet fuel and diesel is counted as part of manufacturing activity.
For its part, the manufacturing sector constituted 14% of the GDP in 2014, clearly a major contributor to economic activities. Aluminum Bahrain (Alba) dominates the manufacturing sector. The setting up of Alba dates back to 1971. Bahrain is a major exporter of aluminum products in the world despite being the smallest within the (Persian) Gulf Cooperation Council states in terms of GDP, size and population.
Paradoxically, the government is investing heavily in the energy sector notwithstanding the current drop in oil prices and the stated objective of diversifying away from oil. In fact, Bahrain will be responsible for all the costs associated with enhancing capacity of the pipeline carrying Saudi crude.
Not surprisingly, the share of the financial services sector has edged up from 14% in 2000 to 17% in 2014. This translates into the sector serving as the second major source of GDP growth after oil.
