The Economic System of Bahrain: An Analysis

What is the economic system of Bahrain? The economy of Bahrain is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.

In Bahrain, the economy is composed of a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.

What do the freedom indexes tell about the economic system of Bahrain?

Now, to determine if a country is mostly a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2022 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Bahrain is ranked 74th globally and 4th in the Middle East and North Africa indicating that the country has a moderately free economy.

In a similar way, the 2022 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Bahrain gets a score of 12/100, which qualifies it as Not Free. Bahrain is a country where the government controls what people do for political reasons, and people have limited freedom to choose (what, how much, and how to produce, whether to buy or not, selling price, etc.)

The Link Between Public Sector Employment and the Economic System of Bahrain

An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Bahrain, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 9.6% (2012. In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the State. Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer is the economy to being a command economy.

What does the biggest company in Bahrain say about the country’s economic system?

The biggest company in Bahrain should also be looked at, as well as whether it is a state-owned or private company. In this case, Ahli United Bank from Bahrain is categorized as a private sector company. It is owned by private shareholders and is not part of the public sector. It is a financial institution that provides banking services to individuals and businesses.

The historical factors that have influenced the economic system of Bahrain

The current mixed economy system of Bahrain is a result of the multiple country’s economic reforms in the last century. These reforms include the liberalization of the economy, the introduction of foreign investment, and the diversification of its economic base. These reforms have led to increased economic growth, increased employment, and improved standards of living for its citizens.


The Economic System of Bahrain_ An Analysis


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