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.
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