In a region currently experiencing an unprecedented oil boom, Bahrain has the fastest growing economy in the Arab world, the United Nations Economic and Social Commission for Western Asia found in January 2006. Bahrain also has the freest economy in the Middle East according to the 2006 Index of Economic Freedom published by the Heritage Foundation/Wall Street Journal, and is twenty-fifth freest overall in the world.

In Bahrain, petroleum production and processing account for about 60% of export receipts, 60% of government revenues, and 30% of GDP. Economic conditions have fluctuated with the changing fortunes of oil since 1985, for example, during and following the Persian Gulf crisis of 1990-91. With its highly developed communication and transport facilities, Bahrain is home to numerous multinational firms with business in the Persian 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.

Bahrain is a generally flat and arid land, comprising of a low desert plain rising gently to a low central escarpment, in the Persian Gulf, east of Saudi Arabia. The highest point is the 122 m Jabal ad Dukhan.

Considered to be one of the fifteen states that comprise the "Cradle of Humanity" in the Middle East, Bahrain has a total area of 688 km² (266 mi²), which is slightly larger than the Isle of Man, though it is smaller than the nearby King Fahd Airport in Dammam, Saudi Arabia (780 km² or 301 mi²). As an archipelago of thirty-three islands, Bahrain does not share a land boundary with another country but does have a 161-kilometre (100 mi) coastline and claims a further twelve nautical miles (22 km) of territorial sea and a twenty-four nautical mile (44 km) contiguous zone. Bahrain enjoys mild winters and endures very hot, humid summers.

Bahrain's natural resources include large quantities of oil and associated and non-associated natural gas as well as fish stocks, which is perhaps fortunate as arable land constitutes only 2.82% [6]. Desert constitutes 92% of Bahrain and periodic droughts and dust storms are the main natural hazards for Bahrainis.

Environmental issues facing Bahrain include desertification resulting from the degradation of limited arable land and coastal degradation (damage to coastlines, coral reefs, and sea vegetation) resulting from oil spills and other discharges from large tankers, oil refineries, and distribution stations. The agricultural and domestic sectors' over-utilization of the Dammam aquifer, the principle aquifer in Bahrain, has led to its salinisation by adjacent brackish and saline water bodies.

Cost of Living
The overall cost of living in Bahrain is similar to that in most European countries, if you’re living in the style of the average western expatriate.

The Bahraini Dinar (BD) is linked to the US$ and is therefore susceptible to the ups and downs of that currency.

But the general lack of taxation has a significant impact on the cost of certain items, e.g. cars. On the other hand, the cost of accommodation is sometimes high, as is that of certain food items, particularly imported foods. If you buy internationally recognised branded foods and household goods, you might pay higher prices than in your home country, but there are usually plenty of cheaper locally and regionally produced alternatives that are of excellent quality. Clothing can also be expensive if you favour designer labels – this isn’t peculiar to Bahrain – although there’s little need for winter clothing.

The price of wines and spirits, where these are permitted, is slightly lower than in the UK but higher than average European prices. Electronic goods, such as televisions, hi-fis, DVD players, photographic equipment and computer hardware and software, are generally less expensive than in Europe, mainly because of lower import duties.

Utilities, such as electricity, water and gas, are subsidised to some extent by the region’s governments, which own the services (except for bottled gas supplies) in order to provide inexpensive electricity and water, mainly for the benefit of the local population. Utilities are therefore cheaper than in most European countries. However, at the height of summer, air-conditioning costs will escalate, rather as the cost of heating increases in winter in colder climates. Newcomers sometimes make the expensive mistake of keeping their air-conditioning on even when they’re out, but this is unnecessary, as air-conditioning systems reduce the temperature in your accommodation quickly when activated on your return home.

You should also allow for the cost of international telephone calls, although these are kept low by Bahrain’s government, who want to encourage international business and investment in the region.

Your cost of living will obviously depend on your lifestyle. When you’re negotiating a work contract, it’s usual for your prospective employer to produce detailed cost of living figures for his country, which are useful in helping you to decide whether the proposed job is financially attractive or not.

Rental costs for a one-bedroom apartment in a modern block, probably unfurnished, a two-bedroom apartment in a similar block and a two or three-bedroom apartment or a modest villa. Apartments might have air-conditioning included in the rent. Satellite television is probably provided but is unlikely to include all channels. A swimming pool and/or gym are usually provided. Doesn’t include luxury food items or alcohol. Includes electricity (and air-conditioning), water (and usually sewage if charged in conjunction with the water, as is normal) and an allowance for telephone charges. Includes entertainment, dining out, sports, newspapers and magazines but not holidays (air fares are often included in work contract terms). Includes running costs for an average family car plus third party insurance, petrol, servicing and repairs, but excludes depreciation and credit purchase costs. Includes private health, travel, car and contents insurance. Note that property is rented, so building insurance is usually unnecessary. Lots of clothing is unnecessary in the region’s hot climate. Office wear for men is a shirt and tie or smart casual, except for formal occasions.

Education plays a pivotal role in Bahrain’s development programmes. The government has been quick to realise the importance of improving the educational infrastructures, and oil has provided the money to do so. That isn’t to say that education had previously been unavailable in Bahrain, but limited resources, an insular attitude and the desire to retain the status quo meant that education had been basic and only the brightest pupils went on to higher education, and then only if their families could afford it.

The vast influx of foreigners into this formerly secluded region emphasised the need to ‘catch up’. Bahrain’s government realised that there was a need to provide a well-educated, resourceful local workforce for the future, displacing the continual need for expatriates to undertake even basic maintenance of state utilities. Major programmes for building schools and colleges of higher education were undertaken and continue to this day, and standards of education have been raised significantly. Arab students are now found in the world’s most prestigious universities, particularly in the UK and USA, where their skills equal those of their counterparts from other countries. The old view of the backward, ill-educated Arab has largely vanished, and the literacy rate in Bahrain is 85 per cent.

There’s a fairly wide choice of schools in Bahrain, although state (i.e. government-funded) schools aren’t usually an option for foreign children. These are attended by local and expatriate Arabs, who share culture, language and religion. The private sector provides for the expatriate communities, and its schools are generally of a reasonable standard, especially for primary education. However, a child’s secondary education is sometimes better provided for in their home country. The Ministry of Education controls standards in the state schools and have some influence over the establishment, legitimacy and running of those in the private sector, in some instances stipulating that school hours and days match those of the state schools.

A key decision for expatriates with school-age children (particularly those at secondary school age) is whether to send them to boarding school in their home country and, if so, at what age? First, do you want to be separated from your child(ren) for months at a time? Do you feel it important that your children are brought up exposed to and aware of their national culture and environment by being educated at home? On the other hand, Bahrain is a wonderful environment for children, being safe and clean, with plenty of opportunities for exercise and sports, and with sunshine, sea and beautiful beaches; do you want to deprive them of all this by packing them off to boarding school in a country which may lack these advantages? You’re advised to listen to advice from other expatriates who have made these difficult decisions.

When deciding on the type of education best suited to your child(ren)’s needs, you should also ask yourself the following questions:

Are Bahrain’s educational system and examination qualifications recognised in your home country, the country in which your child will probably eventually have to make his way?

When your child returns to your native country, will his education be ahead of or behind that of his peers?

What is the academic record of the school you propose to select?

Leisure & Entertainment
Bahrain has much more nightlife than you might expect. There are bars, nightclubs and some very sophisticated entertainment, jazz, opera, ballet and theatre. There is an abundance of quality restaurants, most of which serve alcohol and the food is usually of an exceptional standard.

Something that must be experienced is the traditional Arabic night. They are very good fun due to a combination of belly dancing, live music, and great food. There is also a huge choice of bars and pubs.