With a very young population, the increase has exerted considerable pressure on the Bahraini government to produce jobs. About 9,000 graduates enter the workforce each year. With such large numbers, a considerable amount of government expenditure has gone to the expansion of services. Investing heavily in the public sector, the government has borrowed internally and externally to meet the needs of its people. Such investment practices have left little funding for capital investment and this along with weak oil prices help account for the drop in non-oil GDP growth.
Relief does seem to be on the way, as rising oil prices have boosted government revenues.
Earlier in the year, Saudi Arabia agreed to allocate the balance of oil production from the field to Bahrain to help boost its economy and decrease the budget deficit. The oilfield produces 140,000 bpd. Officials also told Reuters that they are studying a comprehensive tourism plan and have formed a ministerial committee to review projects to boost economic growth and create jobs for Bahrainis. The government has stepped up its Bahrainization program, offering incentives to foreign companies that hire Bahraini citizens. A quota system has been incorporated, dictating the number of Bahraini nationals that should be employed in certain sectors at a given time.