Bahrain was, after Iran and Iraq, the first country in the Gulf to have its petroleum resources developed by Western companies. It has a longer history of economic and infrastructural development than any other state in the peninsula. Bahrain’s petroleum reserves and producing capacity are also the smallest of the Gulf oil producing states. Thus, Bahrain’s rulers were the first in the Gulf to confront the problem of building a diversified modern economy. Furthermore, while political legitimacy is problematical throughout the Gulf, it is especially so in Bahrain. A history of tribal oppression, a large Shi‘i community bearing more than its share of the grievances, and expectations arising out of the early oil years placed strong demands on Bahrain’s rulers to distribute wealth and develop new political and economic institutions.
When Britain granted Bahrain formal independence in 1971, it appeared that the island-state might follow a unique path in the Gulf, toward relatively democratic political institutions and diversified economic development. However, the parliament instituted in 1973 was dissolved by decree in 1975; since then the rule of the Khalifa family has become increasingly authoritarian. Bahrain now also seems to have abandoned the path toward a self-sustained economy.
To some extent, we can trace these developments through Bahrain’s experience with the phenomenal labor immigration that affected the entire Gulf region in the 1970s. The numbers of migrant workers in Bahrain have not been as large as elsewhere, and do not represent the extraordinary proportions of the population and labor force that they do in Qatar and the Emirates, for example. Nonetheless, as in the other, more affluent states, there has been an increasing dependence on foreign labor in the context of an economy still oriented toward construction and services and still dependent on oil revenue and government expenditure. Labor migration, initially a consequence of development, has become an important contributing factor in the complex problems now facing the country.
Before the Oil Boom
For centuries, Bahrain was a major point on the sea routes between the Fertile Crescent and India, a center for the international pearl trade and, at various times, an entrepot for regional trade. Its shores have been frequented by merchants, sailors, artisans and soldiers from the Arabian Peninsula, Iran, Mesopotamia, India and, most recently, Europe. Political control of the islands has changed frequently, amid circumstances that occasionally involved major population movements. Until recently, it would have been impossible, and unnecessary, to determine who was “Bahraini” and who was not. Only when the British stabilized borders and regimes in the Gulf were real barriers to population movement erected, and residence made as important politically as lineage, sect or ethnic origin. The British administration distinguished between people who were “Bahrain subjects” and all others who, regardless of actual “nationality,” had pretext to put themselves under British protection and jurisdiction. This administrative distinction, a result of increasing British involvement in local affairs, defined a group of people whose descendants constitute the majority of Bahrainis today.
By the turn of the twentieth century, a “Bahraini” population could be fairly clearly defined. That population was very diverse — Sunni and Shi‘i, Arab and Persian, tribal and non-tribal, free and slave, with permutations and finer distinctions in nearly all these categories. Ethnic, sectarian and tribal affiliation remained very important in social relations. While outside contact and influence were considerable, the actual number of “foreigners” living in Bahrain was quite small. In addition to a handful of Indian traders and British officers, there were a few thousand Persians and Arabs from Najd, Hasa, Qatif and Kuwait.  The status of many of the Arabs and Persians was ambiguous, as travel between Bahrain and their various places of origin was frequent. After the crash of the pearl market in the 1920s, times were so bleak that foreigners, and many Bahrainis as well, left in search of better circumstances.
The situation began to change in the 1930s, with increasing British influence and the development of oil. By 1941, the year of the first census, the proportion of foreigners in the population had jumped to nearly 18 percent.  The petroleum refinery was expanded, communications and other infrastructure were built, the mercantile sector grew significantly, and administration and government services slowly developed. The 1959 census provides the first data on employment. Foreigners, about 17 percent of the population, represented about one third of the labor force. During the 1960s, the pace of growth accelerated. There was more development in industry, including the establishment of an aluminum smelter, further growth in communications and commerce and a major expansion in public works, housing and other services. Still, the census of 1971 produced figures not much different from those of 1959: foreigners represented about 18 percent of the population and 38 percent of the work force.
For many years, Bahrainis were significantly underrepresented in the modern economic sector that grew up around the oil industry. The decline of the pearl industry and the depression had left thousands unemployed. Imports of foreign foodstuffs and manufactured goods had further marginalized agriculture, fishing and traditional crafts. Bahrainis began working at unskilled jobs in the modern sector, often on a seasonal or casual basis. Stable employment, particularly in the oil industry, further reinforced the decline of traditional pursuits, but skilled jobs remained in the hands of American, British and Indian workers. Status and wage discrimination prevailed against Bahrainis, even (or especially) in the few situations where they held positions alongside foreign workers.
This pattern began to change after major outbreaks of political unrest. Workers at the refinery expressed economic grievances as early as 1938, and over the years these combined with political demands. Popular sentiment turned against both the government and the British. Earlier in the century, those allied to the ruling family opposed the British, while much of the population, especially the Shi‘a, favored British efforts to moderate tribal oppression. By the early 1950s, the oil and security alliance between the British and the Bahraini government was opposed by an increasingly broad range of popular forces. Disturbances erupted in 1953 in the form of sectarian riots, but by 1954 both Sunnis and Shi‘is joined behind demands for an elected parliament, a standardized legal code and independent labor unions. The fact that this opposition was organized through fragmented, traditionally based networks and relationships made it impossible for them to form a united front.  They were susceptible to the delaying tactics of the government, which eventually suppressed the movement in 1956, following an attack on the motorcade of the visiting British foreign minister.
Although the opposition leadership of the 1950s had been arrested, exiled, imprisoned or coopted, the opposition continued underground during the 1960s, and there were occasional public outbursts in the form of strikes and demonstrations. The most serious of these occurred in 1965 and 1972.
Though the main demands were not met, political unrest did have an effect on labor relations and development policy. Training programs were started at the oil company, education and public spending were expanded, and Bahrainis gained more favored positions in real estate and commerce. The pace of growth remained moderate through 1971, and the proportion of foreigners in the population and work force much smaller than elsewhere. Growth was being “digested” as the labor force infrastructure grew in pace with the modest expansion of the economy.
Oil Boom and Migration
After the increase in oil prices in 1973, the boom came to Bahrain. Greatly increased government spending initiated a period of unprecedented growth and structural development. The Bahrain Petroleum Company (BAPCO) and Aluminum Bahrain (ALBA) expanded and the government moved to acquire a larger share of them. Light industries grew up, especially in aluminum. Other new industries were established, such as the Arab Shipbuilding and Repair Yard (ASRY), funded by the various Arab states of the Gulf. Communications and transport infrastructures were expanded and modernized. Government activity mushroomed, particularly in housing, education and health. After the start of the civil war in Lebanon in 1975, a booming offshore banking sector emerged. As demand and consumption grew, imports increased and the commercial sector expanded geometrically. Finally, there was an explosion in both commercial and residential construction, accompanied by skyrocketing real estate prices.
In 1979, Bahrain shifted development policy, apparently in response to the advice of recently recruited American advisors. Government spending was cut, despite a massive increase in revenue from the oil price rise of 1978-1979. The government expanded job training programs for Bahrainis and set more stringent controls over the import of foreign labor. But contractors and entrepreneurs opposed these measures, and the policy was effectively reversed in 1981. Although control of immigration remained official policy, it was easily sidestepped. At about this time, under the auspices of the newly formed Gulf Cooperation Council (GCC), Saudi Arabia and Kuwait agreed to fund a number of projects in Bahrain. Major expansions were planned at BAPCO and ALBA. Plans for new industries — steel pelletization and petrochemicals — were set in motion. Three major construction projects began: the Saudi-Bahrain causeway, a new suburban complex on the western side of Awal Island, and the new Gulf University near Isa Town. On another front, after years of trying to restrain the banking sector, the government allowed it to expand rapidly. A new real estate boom and another wave of commercial and residential construction followed the increase in government spending and the announcement of the new projects.
This boom was quite brief. By late 1982, the oil glut had forced the cancellation or cutback of several projects. The 1981-85 development plan has been extended from four to six years and the government has inaugurated a number of new revenue-raising measures, such as increasing fees for licenses and charges for services and utilities. Rents and real estate prices have fallen considerably.
Though this second pause in development was not by design, it does provide a useful point from which to discuss the impact of the last decade’s growth, particularly on the composition of the labor force. Figures from ministry of labor surveys conducted in 1979 and 1982 and recently released data from the 1981 census are startling, especially in view of the relatively modest predictions made in earlier studies. The 1981 census counted 81,500 foreign workers in Bahrain.  Despite the purposeful slowdown in 1979-1980, Bahrain had reached by 1981 the “high-growth” figure the World Bank had projected for 1985.  The foreign population as a whole, counting spouses and dependents, had grown by 197 percent, from 37,900 in 1971 to 112,400 in 1981. In 1981, the foreign population was 32 percent of the total, up from less than 18 percent in 1971.
The foreign population has also changed in both structure and composition since 1971. There has been a reduction in the number of non-Bahraini Arabs, from 17,000 in 1971 to 14,300 in 1981. Omanis, previously the majority of foreign Arabs, have dwindled to insignificance, responding to increased development in Oman. The number of Iranians has also decreased considerably, in response to the revolution and stricter controls on migration. The number of Asians, on the other hand, increased from 12,200 in 1971 to 86,700 in 1981. The vast majority of these are Indians.
A major development in Asian migration since 1971 has been the emergence of East Asian communities, mainly Korean, Thai and Filipino, reflecting the exploitation of fresh labor markets and the diversification of the foreign population, probably for security reasons as well as factors of cost and efficiency. There has also been a large increase in the number of Europeans and Americans in Bahrain. The British community makes up by far the largest part of this category.
The Structure of the Labor Force
The number of foreigners seems quite modest in comparison to the other states in the Gulf. In terms of labor force participation, however, there is a greater resemblance between Bahrain and its neighbors: 59 percent of the employed workers in the country were foreign, up from 38 percent in 1971. Bahrainis still constitute a majority in public employment (67 percent), but represent only 33 percent of the private-sector work force. The construction labor force nearly tripled over the decade, from 10,400 to 29,000 workers; only 13 percent of the construction workers in 1981 were Bahraini, down from 54 percent in 1971. The number of Bahraini construction workers declined absolutely, from over 5,600 to under 3,900 — in an industry that had long been a haven for those in marginalized sectors of the traditional economy. The number of tailors and dressmakers has more than doubled, yet again there has been an absolute decline in Bahraini participation. The booming hotel industry employs virtually no Bahrainis at all. There was a 7 percent drop in the actual number of workers in agriculture and fishing, and a 19 percent decline in the number of Bahrainis in these industries.
Between 1971 and 1981, the number of Bahrainis working increased by 57 percent, marginally exceeding the 52 percent increase in the number of Bahrainis entering the labor pool — defined as all persons 15 years of age or older — in this period. At the same time, the total employed population increased by 137 percent. The increased Bahraini participation rate (just over 1 percent) is entirely due to the increased participation of women in the work force.  This grew from 3 percent to 11 percent, while the participation rate for men actually declined from 74 percent to 70 percent. The participation rate for non-Bahrainis increased from 77 percent to 85 percent, due partly to the increased participation of women (up from 20 percent to 35 percent) and partly to relatively smaller numbers of dependents in the migrating population. Recorded unemployment for Bahrainis has increased from less than 4 percent in 1971 to over 11 percent in 1981. Most Bahrainis recorded as unemployed are male. Any appearance of Bahrainis keeping up with the overall development of the economy is thus illusory.
Three issues need to be examined more closely: working women, government employment and “Bahrainization” programs. The increased participation of women in the work force has occurred at the expense of greater reliance on domestic servants. The 1981 census counted nearly 7,200 personal servants, 97 percent of them non-Bahraini. This number is probably increasing rapidly. Servants — Sri Lankan housemaids in particular — are paid as little as 30 dinars per month. They have become commonplace, even among groups who have never employed servants before. The availability of cheap household labor — and the political decision to facilitate its importation — has prevented the sort of mechanization of household labor that has occurred in the West, and the conflicts of values that have emerged when women have entered the labor force. Increasing numbers of Bahraini women can work, if they so desire, or spend their time visiting or entertaining, without affecting their traditional roles as housewives and mothers. Servants are available to cook, clean and take care of children while Bahraini women engage in other activities.
Thus, at the same time as they contribute to processes of change by allowing Bahraini women to work, servants also contribute to processes of continuity, by allowing them to work in circumstances that do not challenge cultural orientations, social relations or the politics of the family.  Women are a great labor resource in Bahrain. Except at the level of postgraduate training, Bahraini women are nearly as educated as men, and any serious effort at “Bahrainization” would have to involve women in much greater numbers than before. This is one possible response to the current economic problems. The trend, though, is toward the creation of a substantial underclass of domestic laborers. The expansion of public sector employment between 1971 and 1981 has been on the order of 140 to 150 percent.  In 1981, government employment was 67 percent Bahraini and 33 percent non-Bahraini, a reversal of the proportions found in the private work force. Government employment, as a percentage of total Bahraini employment, rose from 29 percent in 1971 to perhaps as much as 44 percent in 1981. There is nothing intrinsically problematical in public sector growth, which might signify the transition to a service-oriented welfare state in a mature industrial economy, or the emergence of a socialist economy. Here a welfare state is emerging, but in the context of a capitalist economy strongly oriented toward services and without much industry. Except in some technically-oriented directorates, the rapid growth of public employment in Bahrain has been inefficient and unproductive. The public sector is a means of distributing patronage and government revenue. Offices are overstaffed, hours are short, tardiness is scandalous, supervision is lax. Skill levels are often inadequate and do not improve much on the job. Productivity is low.
Increasing subsidies and welfare benefits as well as the availability of government employment have discouraged Bahrainis from working in the private sector, while foreigners have taken over a larger part of the productive labor force.  This has made more difficult the problem of developing the skills of Bahrainis already in the private sector. Many regulations and practices limit the economic activities of foreigners and favor nationals in the booming commercial sectors, lessening the attraction of industrial and technical occupations. Many trainees in the state-owned companies have abandoned industrial careers to become proprietors or employers in the commercial sector; many civil servants (illegally) maintain private businesses on the side.
For their part, Bahraini employers have little reason to hire other Bahrainis. Despite 50 years of public schooling, the Bahraini work force is severely undereducated. In 1981, the illiteracy rate remained high?more-than 31 percent for the population over age 10. Another 26 percent could read and write, but had completed no formal education. The same social, cultural and political factors that have contributed to poor education and relatively low levels of technical skills in the workforce have also made many government and private training programs less than attractive to Bahrainis. Even students who emerge with titles and certificates possess inadequate levels of expertise. It has been especially difficult to attract Bahrainis to positions in skilled trades requiring lengthy training programs.
The training programs of the state-owned industries attract many candidates because they are heavily subsidized and offer good salaries during training. But this affects the profitability of the companies and can lead to bottlenecks at the end of the initial training stages. Often there are not enough positions to place all workers with basic skill levels. Many are reluctant to continue with further training; they feel they should be able to either replace their foreign trainers or move into management rather than undergo additional years of specialized training. The problem is usually solved with salary increases, irrespective of increased productivity. Many Bahraini employees are also lost to commerce or to other state companies offering higher salaries. Given the availability of skilled foreign labor at bargain prices, employers thus have few incentives to train Bahrainis, who in the end are likely to be more demanding employees. Attempts by the Labor Ministry to enforce “Bahrainization” measures in the private sector, most insistently during the 1979-1981 period, have met strong resistance.
Foreign workers have taken the great majority of the jobs created in the last ten years. They now dominate the economy at all levels and in most sectors — technical fields, skilled trades, management and professions, services and unskilled labor.  In the other states of the Gulf, foreigners are either segregated from the local population, as in Saudi Arabia, or have always dominated the modern economy, as in Kuwait, Qatar and the United Arab Emirates. In Bahrain, large numbers of foreigners are a new presence in a relatively open society where, by the early 1970s, the local population had come to dominate, if not yet manage, the modern economy. Thus Bahrain presents an element of reversal not found elsewhere in the Gulf.
It is no longer possible to see the foreign communities in Bahrain as an insignificant presence or as a large, temporary construction crew which will disappear when the project is finished. “Bahrainization,” in any absolute sense, is simply out of the question. The current spending cutback is probably a healthy development, but even the projects planned or now in progress will continue to bring in more foreign workers. The economy continues to generate a need for labor which can only be provided by foreigners. The processes by which Bahrainis were being incorporated into the modern sector appear to have lost momentum.
The current trend is toward a segregated labor force, with Bahrainis in trade and the public sector and foreigners in private production and services. There is still considerable dependence on foreign technical and managerial expertise, but foreigners are increasingly employed as advisers rather than as executives with administrative authority. This creates an ambiguity regarding explicit and implicit control. Across the full range of the occupational hierarchy, at work and in social relations, foreigners are increasingly separated from or made subservient to Bahrainis, at least formally. This pattern is strikingly similar to Kuwait during the 1950s and 1960s: the emergence of a large foreign presence, significant economically but discriminated against legally, socially and culturally. 
The policies of rapid growth followed in Bahrain were not inevitable, as the voluntary slowdown in 1979 indicates. Why was the pace of growth reaccelerated in 1981, after the country’s rulers seemed to be satisfied that infrastructure was more or less in place? The country’s increased wealth made this course possible, but recent developments bring the continued affordability of such policies into question. The underlying explanation for the policies pursued is political: in particular, the precarious legitimacy of the regime with regard to the nature of its rule and its distribution of resources.
Before the development of the oil industry, the division of labor in Bahrain was segmented and stratified. Tribal groups dominated the pearling industry. Though they had previously been seamen, the Al Khalifa themselves had more or less ceased to take part in economic activities. Their income derived from their estates, from customs, from levies on those pearl fishing boats which could be induced to pay them and, later, from British subsidies. Townspeople, largely Sunni, generally accepted this state of affairs, but the Shi‘i population resented the depredations visited upon them.
The major drawback of the status quo ante, from the viewpoint of the ruling family, was the fact that they were relatively poor. The merchants were far and away the most prosperous group in society. As the oil industry developed, the ruling family acquired a source of revenue sufficient to make it the wealthiest segment of society. In recent years this gap between the rulers and the people has greatly widened. The ruling family and its allies are now well integrated into the administrative machinery, and are in a particularly good position to exploit the growth of the real estate market. Until recently, the merchants remained the most sophisticated social group. However, as the status consumption of the sheikhs has become more lavish, paced by the other ruling families in the Gulf, the merchants have lost this element of social status as well as predominance in wealth. The growing distance between the ruling family and society has heightened plural distinctions, reinvigorated tribal bonds, and increased elite demand for resources, intensifying traditional practices of redistribution in exchange for loyalty.
These processes have implications for government and society as a whole. “Civil society” in the Western sense — social differentiation in terms of class and other “modern” criteria — has not emerged, but new institutions have acquired relevance alongside persisting relations, networks and action groups based on the traditional ethnic, sectarian and status criteria. Despite the presence of ministries, agencies, and an ostensibly “rational” bureaucratic machinery, decisions are made through informal networks and relationships, on lines of traditional distinctions. Since the establishment of the ministerial system, the ruling family has expanded its dominance of the administrative structure through a growing network of shaikhs in positions of formal and informal authority. 
The contradiction between the radically increasing wealth of the elite and the prevailing sense of distributive justice has had an impact on popular aspirations and motivations. Wealth from oil, unlike wealth from trade, was identified as a general social resource. Total usurpation by the elite was regarded as illegitimate, and was an underlying factor in the civil disturbances of earlier years.
These political grievances have been permutated and compounded in recent years. The various forms of opposition, driven underground in the late 1950s, resurfaced in more organized form in the early 1970s. The dissolution of Parliament in 1975 abruptly terminated this political development without ending the sentiments in favor of reform, creating and reinforcing a profound sense of deprivation and frustration. With the Iranian revolution as the obvious catalyst, this sentiment has now taken a more religious coloration for many Bahrainis. Despite considerable progress, the Shi‘a remain disadvantaged in Bahraini society. Fully aware of this history of discrimination, many Sunnis and sheikhs assume that the Shi‘a are out for revenge, especially since 1978. Their behavior — favoritism and discrimination in the eyes of the Shi‘a, self-protection in the eyes of the Sunni and the sheikhs — has a self-fulfilling effect. The suspicions of the government alienated many Shi‘is who might not otherwise have sought a religious means of expressing their political sentiments. The security apparatus, already ubiquitous, was expanded. As the government became more forceful, it set in motion a spiral of violence, alienation and oppression. This cycle was accelerated by the 1981 coup plot. Occasional deaths of prisoners under detention — reputedly from torture — set off waves of demonstrations.  Mourning ceremonies were in turn occasions for further confrontations with the police — a cycle familiar in Iran before the revolution. As the government demands ever more effusive, explicit and unambivalent expressions of loyalty, society is increasingly politicized and a broader range of the population, Sunni as well as Shi‘i, both rich and poor, is alienated.
Political pressure on the government is compounded by contradictory economic interests, which have directly influenced the course of development policy. The government is under pressure to provide opportunities and benefits to counter popular alienation. The development of the local labor force in the context of a slower and more considered growth policy would serve this interest. On the other hand, the government’s strongest supporters, other than the tribal families, have been the merchants and entrepreneurs. The immediate interests of both the merchants and the ruling elite are best served by unrestrained growth. This requires the free use of foreign labor, which provides both direct profits and markets for more goods and services, but limits the possibility of local labor development. The interests of this group are likely to become more pronounced following the agreements which allow businessmen from other GCC countries to operate freely in Bahrain.
After 1971, the ruling family could no longer rely on — or blame — the British for imposing some resolution of these contrary interests. The sudden influx of revenue after 1973 enabled them to handle this problem for the time being. While the government followed a policy of unrestrained growth to the benefit of the elites, it developed the welfare state, expanded government employment, and provided a subsidized lifestyle for people in general. But their integration into the modern economy was precluded precisely by the rapid pace of growth. In brief, the extraordinary demographic changes were a result of development policies, which were themselves a response to some fundamental social and political contradictions of Bahraini society.
Casualties and Complications
One casualty of affluence, the growth of the welfare state and the availability of foreign labor has been the “work ethic” — i.e., attitudes consistent with participation in the modern and technological sectors of the economy. The processes which distribute people’s share of the new prosperity — benefits, subsidies, and other incentives to unemployment, underemployment and low productivity — emphasize status and authority rather than productivity.
The difficulty of motivating Bahrainis to enter technical and skilled occupations, especially if manual work or status inferiority is involved, is usually attributed to “tradition” or some generalized “Arab culture.” At this level, such an explanation represents little more than an ethnic slur — often the context in which such theories are articulated. Behind this is the fact that there is an established tradition among the tribal segments of Bahraini society of what might be called a “tributary” mode of subsistence.
But this cultural and social complex is not “traditional” for the other groups in society, be they merchant, craftsman, cultivator or fisherman. While status and sociability have always coexisted with other attitudes toward work more conducive to productivity, now they are being reinforced as the primary positive values in work. Inseparable from and lying beneath this demand for status is the spectacle of the elites receiving a grotesquely disproportionate share of public revenues. This greatly weakens motivations to work productively and dilutes the communal bonds of the society as a whole. The processes through which wealth has been distributed have encouraged the generalization of some attitudes previously prevalent among tribal segments of society. The emergence of a “welfare mentality” appears greatest among the less educated and unskilled, those whose efforts could be most useful in Bahrainizing critical sectors of the labor force.
The policies of rapid development also have fiscal and political implications. First, such policies are expensive, and are increasingly being underwritten by Bahrain’s neighbors, especially Kuwait and Saudi Arabia. Currently, according to International Monetary Fund sources, about 10 percent of Bahrain’s budgeted revenue comes from grants and loans. This may be a conservative figure. Nearly all the new development projects planned in 1982 were to be paid for by Saudi and Kuwaiti parties, both public and private. Bahrain was reportedly persuaded to accept a few unwanted projects — to the benefit of Saudi and Kuwaiti interests — in order to maintain support for other programs. Some GCC projects, whatever their benefits might be, could lead to cultural and social restrictions in Bahrain — for instance, regarding the availability of liquor and prostitutes — that would be “bad for business.” Many firms, and Saudi men, come to Bahrain precisely to avoid the restrictions in other Gulf states.
There is now reason to doubt the commitment of other countries to fund Bahrain’s overspending in the face of forced cutbacks in their own development programs. The cancellation of several Bahraini projects and the government’s unprecedented revenue-raising measures of recent years underscore this concern. Real estate and stock shares have already tumbled. Further cutbacks in services are likely to produce resentment. The Abu Sa‘afa oil field, located in the channel between Bahrain and Saudi Arabia and shared by the two governments, provides most of Bahrain’s oil income. Though it has cut production elsewhere, thus far Saudi Arabia has not cut production at Abu Sa‘afa and revenue has flowed uninterrupted to Bahrain.  Recent Saudi moves to control trading in the riyal and to give its own bankers a stronger position in domestic financial markets could have a negative effect on another prime source of Bahraini income. Decisions about these matters, of course, are not being made in Manama.
The extended presence of large numbers of migrant workers in Bahrain has complex political implications. Because most foreigners in Bahrain are non-Arab, Arab nationalism does not cut across the distinction between national and expatriate as it does in Kuwait. Alliances are unlikely and foreigners lack a Bahraini audience for any complaints about conditions. Ideas such as democracy or religious fundamentalism are not new to Bahrain, and if they become powerful social forces it will not be a result of “outside influences.”
There is little possibility that an economically significant foreign labor force could itself become potent politically. Security measures have been effective. The foreign population is diverse. Conditions in the international labor market make it possible to manipulate the foreign population within extremely broad limits. While foreign communities are permanent, strict control over residence and employment can, if desired, make it difficult for individuals and families to become entrenched. Tight control over immigration already exists, and there are few truly illegal residents.  Recent proposals to limit the work tenure of individuals and legally restrict the migration of dependents would further strengthen government control. The sponsorship system and other controls have the effect of safely fragmenting the foreign communities. Most expatriates live in well-structured insecurity.
The political impact of the larger foreign presence is more likely to be indirect. As Bahrainis have become more dependent on foreign labor and their government, they have become less tolerant of the former and more demanding of the latter. A Bahraini sentiment among the people at large, in contradistinction to the ruling family, has emerged in response to the distancing of the elite from society and the arrival of more foreigners. In the context of political tensions, increasing occupational competition with foreign workers has led to violence and to demands for more discriminatory policies. In a country once noted for its tolerance, the tone of relations between “locals” and “expats,” especially Asians, is rising to a xenophobic pitch. 
The development policies of the last decade have served the interests of the ruling elite — and its supporters in neighboring countries and the West — and undoubtedly strengthened and prolonged the regime. At the same time, this sort of dependent development has substantially added to the list of problems the society must deal with. It has squandered an opportunity to develop its labor power; any future attempts to do so are likely to be much more difficult. The regime has encouraged consumption but has not met long-standing demands for political participation and trade union rights. The government has to a great extent bought such legitimacy as it now appears to enjoy, but the underlying disaffection has only been masked by prosperity.
A cutback in development now might have more serious consequences than it would have had ten years ago. A large foreign worker presence seems indefinite. For contractors, foreign workers are cheaper and easier to control than local workers. The government has its own interest in a weak local labor force, economically dependent on the state, less able and less likely to organize and pressure the government for economic reforms. The problem of the permanent incorporation of foreign communities, by one means or another, has not even been formulated. The benefits and privileges which Bahraini nationality confers have become ever more jealously guarded. Given regional politics and the world oil market, decisions to continue diverting wealth to the elites on the one hand, or to maintain services and distributions of wealth at current or greater levels on the other, will become both more difficult and more important. Denying either constituency could have drastic political consequences. Bahrain’s development policies of the last decade represent its entry into a new game, one similar to that being played by its neighbors, Kuwait in particular. While the stakes have become higher, Bahrain’s stack of chips has dwindled.
 See J. G. Lorimer, Gazetteer of the Persian Gulf (1908-15) (Shannon: Irish University Press, 1970), part II, pp. 237-240, 1160, 1270. First published in Calcutta, Government Printing Office.
 Censes were conducted in Bahrain in 1941, 1959, 1965, 1971 and 1981.
 See Fuad I. Khuri, Tribe and State in Bahrain: The Transformation of Social and Political Authority in an Arab State (Chicago: University of Chicago Press, 1980), pp. 194-217. For detailed accounts of the events discussed here, see also Emile A. Nakhleh, Bahrain: Political Development in a Modernizing Society (Lexington, MA: D. C. Heath, 1976), and M. G. Rumaihi, Bahrain: Social and Political Change Since the First World War (London: Bowker, 1976).
 This figure refers to “economically active” foreigners; with slight unemployment, the number of working non-Bahrainis was 80,700. Neither figure counts spouses and dependents.
 Ismail Serageldin, James Socknat, Stace Birks, Bob Li and Clive Sinclair, Manpower and International Labor Migration in the Middle East and North Africa (Washington, DC: World Bank, 1981). This study, probably the most sophisticated of the forecasts, predicted that with high growth rates there would be about 81,400 foreign workers in Bahrain in 1985. Other predictions may be found in J. S. Birks and C. A. Sinclair, Arab Manpower (New York: St. Martin’s, 1980), in their International Migration and Development in the Arab Region (Geneva: International Labor Organization, 1980) and in State of Bahrain, Directorate of Statistics, The Population of Bahrain: Trends and Prospects (Manama, 1979).
 Participation was calculated as the proportion of the working-age population (those age 15 and over) actually working, and not merely “economically active.”
 Preliminary reports from a Ministry of Labor and Social Affairs survey indicate that most working women — young and unmarried — do not employ servants. It is possible that women’s participation in the labor force may not be of a career orientation, and that servants are used to facilitate traditional or leisurely pursuits to a greater degree rather than employment.
 This is a conservative estimate. Census categories are not exactly comparable. The 1981 census provides a figure for “government and semi-government” employment of 37,800, about 10 percent larger than the figure given, which is a compilation of other census categories used to arrive at the 1971 figure. None of these figures include employment in state-dominated companies.
 The movement of Bahrainis out of the private sector is subject to differing interpretations: marginalization due to the low wages accepted by foreign workers, or selective abandonment of wage labor in favor of the new opportunities presented by development and the state. It seems likely that both factors are important.
 One Bahraini friend noted that the very personal and religiously imbued function of gravedigging had finally been taken over by non-Bahrainis. The employment of Indians, and now others as well, as nursemaids and household servants has long been common. Thus, he wryly joked, Bahrainis are now in the care of foreigners quite literally “from the cradle to the grave.” The effect of foreign nursemaids on Bahraini children has recently become a matter of public concern.
 See Saif Abbas Abdullah, “Politics, Administration and Urban Planning in a Welfare Society: Kuwait,” Ph.D. thesis, Indiana University, 1973; Tarik Mohammed Al-Rayes, “Authority and Influence in the Government Civil Service in the State of Kuwait,” Ph.D. thesis, Claremont Graduate School, 1979; Shamlan Y. Alessa, The Manpower Problem in Kuwait (London: Kegan Paul International, 1981) and “Toward Manpower Planning in Kuwait,” Ph.D. thesis, Fletcher School of Law and Diplomacy, Tufts University, 1978; and Jacqueline S. Ismael, Kuwait: Social Change in Historical Perspective (Syracuse, NY: Syracuse University Press, 1982) and “The Politics of Social Change in Kuwait,” Ph.D. thesis, University of Alberta, 1979.
 See Khuri, pp. 123-133, 234-247.
 These incidents and their basis in Bahraini law are discussed in Amnesty International’s Annual Report for 1979 and succeeding years.
 Throughput to Bahrain’s refinery, from other Saudi fields, was cut in late 1982, but was soon restored.
 In Bahrain, all migrants are sponsored, but do not necessarily work for their sponsor or perform the job they are registered for. Many remain by virtue of kickbacks they pay to the influential people and officials who sponsor their residence permits. These sponsors are often lesser sheikhs; the so-called “free visa” is one of the scraps thrown to them by their more powerful cousins. Others are registered in the Ministry of Labor as laborers, or in other occupations not targeted for Bahrainization, but in fact work as clerks, accountants or technicians. This system requires the connivance of officials who look the other way or sell immigration papers or participate in kickback schemes themselves.
 Recently, pictures of “runaways” — workers who have left their employer for one reason or another — have been splashed across the pages of local newspapers as if they were vicious criminals, rather than victims of exploitation.