Tiny Bahrain has a long and convoluted history. The Sumerians knew it as Dilmun and considered the lush, verdant island to be a holy land. In the Epic of Gilgamesh it was the place where heroes went after death; some scholars believe it was known to the Hebrews as the "Garden of Eden." For a brief time the Greeks controlled the region which they called Tylos; later the Persians would use the island of Bahrain as a buffer against attacks by marauding Arabs. A millenium later the Persians would regain control of the island from the Portuguese, until they were finally driven out by Arabic warriors led by the still-ruling Al-Khalifa family. Soon thereafter came 150 years as a British protectorate. After the 1971 withdrawal of the British, there was talk of Bahrain joining Qatar and the United Arab Emirates in a unified state: alas, this proved abortive and on August 15, 1971 the State of Bahrain was born. Alas, Bahrain's recent history has been no more restful than the past; since it's inception, the State of Bahrain has been faced with several border disputes, three coup attempts and growing restlessness amongst its population.
Of all the Gulf states, Bahrain possesses the most limited oil and gas reserves. While they provide approximately 60% of current budget revenues, they are not expected to last more than another 10-15 years. As a result, Bahrain has sought to diversify its economy. By building the first petroleum refinery in the Gulf, they hope to profit from Saudi Arabia's huge Abu Saafa oilfields after their own holdings run dry; they have also built Aluminum Bahrain, the largest aluminum smelter in the world, and have also developed a large modern shipyard and iron processing plant. Perhaps their greatest success has come in the realm of international banking; at present over 100 offshore banking units, and over 65 American firms, have offices in Bahrain, while Bahrain's international airport serves over 22 carriers and is one of the busiest in the Gulf. While Bahrain's economy is healthy and it has made great strides in offering free healthcare and education, there are still widespread disparities between the wealthy and the poor.
The rulers of Bahrain, and most of the leading figures in the corporate and military sectors, are Sunni Moslems, the majority of Bahrainis are Shi'ites (a holdover from the days of domination by the Shi'a Persians). Unemployment is widespread among the Shi'ites, and so is discontent. After the Parliament was dissolved in 1975, what little voice the Shi'ites had in their government was silenced altogether. As is typical in such situations, those who make peaceful change impossible make violent change unavoidable. Bahrain has regularly been rocked by bombings and protests; while the Bahrain Security Service has so far been able to maintain control without descending into bloodbaths, it is unclear how long this will continue. Bahrain's current ruler, Shaykh Hamad bin 'Isa Al Khalifa, has announced plans to re-establish Parliament in 2003 and to declare the Emirate of Bahrain a kingdom under royal rule. This may serve to ease tensions; it may also result in great discord and protest as security restrictions are relaxed.
When the British pulled out of the Gulf, the Shah of Iran claimed sovereignty over Bahrain; after the Iranian Revolution, the Ayatollah reiterated this demand, based on Bahrain's majority Shi'ite population. While Iran has never invaded, or even made serious threats of invasion, there is still palpable tension between the two neighbors. There is widespread suspicion that Iran is responsible for funding and supporting Shi'ite unrest. With the upcoming Parliamentary elections, there are also fears that Iran will use its influence to drive a wedge between the Bahraini government and the United States. At present Bahrain is the headquarters for the U.S. Navy's Fifth Fleet, and Bahrain was among the nations which contributed troops to Operation Desert Storm. Nevertheless, anti-American sentiment is rising, particularly as the Intefada grinds on. Recent demonstrations have seen both American and Israeli flags burned, and there is growing discontentment with what is perceived as America's blind support for Israel and anti-Moslem bias. While Bahrain's population is not known for its radical Islamic fundamentalism - indeed, Saudi citizens regularly travel to Bahrain for alcohol and entertainment which is unavailable in their country - neither was pre-Khomeni Iran known for its devotion to Islam.