Background:
Bahrain's small size and central location among Persian Gulf
countries require it to play a delicate balancing act in foreign
affairs among its larger neighbors. Facing declining oil reserves,
Bahrain has turned to petroleum processing and refining and has
transformed itself into an international banking center. The new
amir, installed in 1999, has pushed economic and political reforms
and has worked to improve relations with the Shi'a community. In
February 2001, Bahraini voters approved a referendum on the National
Action Charter - the centerpiece of the amir's political
liberalization program. In February 2002, Amir HAMAD bin Isa Al
Khalifa proclaimed himself king. In October 2002, Bahrainis elected
members of the lower house of Bahrain's reconstituted bicameral
legislature, the National Assembly.