The World Factbook. 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. Possessing minimal oil reserves, Bahrain has turned to petroleum processing and refining, and has transformed itself into an international banking center. With its highly developed communication and transport facilities, Bahrain is home to numerous multinational firms with business in the Gulf. A large share of exports consists of petroleum products made from imported crude.
Construction proceeds on several major industrial projects.
Unemployment, especially among the young, and the depletion of both oil and underground water resources are major long-term economic problems.