Energy

Although its revenues from oil and gas have fallen, the government of Bahrain is ploughing new investment into the kingdom’s energy sector in the hopes that the broader economy will reap the benefits in the years to come. This counter-cyclical spending is designed to allow a significant increase in refinery capacity and a more secure supply of fuel for the country’s aluminium smelters, petrochemical factories, power stations and desalination plants. At the same time, the government has taken historic steps to reduce subsidies on fuel, food and utilities that have reduced its expenditure but increased the cost of living for its citizens. Bahrain, which has been a net importer of crude oil for many years, is reshaping the unspoken social contract between monarchs and citizens that characterises the economies of its oil-exporting GCC neighbours. The country’s natural resources may help fuel industries that employ many Bahrainis, but the trickle-down effect of oil wealth will no longer manifest itself in highly subsidised petrol, groceries or utility bills.

This chapter contains an interview with Sheikh Mohammed bin Khalifa bin Ahmed Al Khalifa, Minister of Oil.