Following my trip to the Kingdom of Bahrain, this article presents Bahrain’s geography, economy, and demographic features, its rapid development over a relatively short period and the potential areas for collaboration between Mongolia and Bahrain.
One. Geography, economy, and governance
The Kingdom of Bahrain is a small but strategically significant country in the Arabian Gulf. It consists of 33 islands, covering an area of 787 km², equivalent to Orkhon province. The total population is 1.5 million, with 55 percent being foreign citizens, mainly from India and Pakistan.
Often referred to as the “Singapore of the Gulf,” Bahrain is known for its open economy and business-friendly environment. Its land area is comparable to Singapore’s, and both countries are major global financial and trade hubs. However, Bahrain’s GDP is approximately $50 billion, which is ten times smaller than Singapore’s, and its GDP per capita is around $28,000, one third that of Singapore. Bahrain also relies heavily on foreign labor, with a higher percentage of migrant workers than Singapore.
The Bahrain economy is diversified, with oil and natural gas making up 18% of GDP, a low figure compared to its neighbors. The financial sector accounts for 17% of GDP, making Bahrain a major center for Islamic banking and investment in the Gulf region. The industrial sector comprises 14%, producing 11% of the world’s aluminum. The highly developed tourism and trade attract over 11 million visitors each year.
The country implements distinct policies for its citizens and migrants. Bahraini citizens have access to over 40 thousand homes provided by the government. Foreign residents rent apartments at market prices. Citizens also enjoy free healthcare and education, as well as subsidized food and fuel, making Bahrain’s welfare system one of the most advanced in the region.
Bahrain is a constitutional monarchy with a bicameral parliament known as the National Assembly. It consists of the Shura Council (Consultative Council) with 40 members appointed by the king and the Council of Representatives – 40 members elected every four years by the people.
The Majlis-Al-Nuwab has the authority to approve laws, budget, and oversee government activities, while the Shura Council participates in the legislative process, reviews government proposals and offers recommendations.
The executive branch is led by King Hamad bin Isa Al Khalifa, with Crown Prince and Prime Minister Salman bin Hamad Al Khalifa managing the government. The Prime Minister appoints cabinet ministers.
Bahrain’s judicial system is a mix of Islamic Sharia law and civil law. The Supreme Judicial Council oversees judiciary and judicial independence, while civil courts handle civil and criminal cases, and Sharia courts deal with family and religious matters.
Two. Key features of Bahrain’s development
Historically, Bahrain has been a center of trade and a strategic military port in the Arabian Gulf. In the late 13th century, the Ilkhanate founded by Mongols controlled Bahrain through the Kingdom of Hormuz, as documented in the Qal’at al-Bahrain Fort Museum. Bahrain, famed for its pearls, was a hub for merchants from Persia, India, and Arabia.
Bahrain was a British protectorate for 110 years from 1861 to 1971. It became the first Gulf country to extract oil in 1932. Due to its limited reserves, the country diversified its economy by developing banking, tourism, and manufacturing.
Bahrain’s strategic location provides smooth access to a 50-million-people Arabian markets. With no corporate taxes, low business costs, and the most open economy in the Middle East, Bahrain ranks high in the region for its economic freedom.
The Economic Development Board of the Kingdom of Bahrain, modeled after the one in Singapore, leads Bahrain’s efforts of attracting investment and improving the conditions for investments.
In 2005, Bahrain established the Bahrain International Investment Park (BIIP), which now hosts 114 multinational corporations with 5,200 employees. The park has attracted $2 billion in investment, 80% of which is foreign with the rest from domestic export-oriented firms.
Bahrain offers the cheapest rental rates in the Gulf, averaging $2.66 per square meter per month. The spaces can be leased for 25 years with extension. Fully developed industrial spaces range from 2,000 to 9,600 m², with lease rates at $6.6 per square meter per month and only a 10% VAT with no other tax.
Bahrain is a founding member of the economic and political institution, Gulf Cooperation Council (GCC), which includes Saudi Arabia, the UAE, Kuwait, Oman, Qatar, and Bahrain. Unlike its neighbors, Bahrain is notable for its religious tolerance and pluralistic social policy, making it one of the most stable and business-friendly countries in the Gulf.
Currently, Bahrain is stiving to become a regional hub for digital economy and fintech.
Three. Cooperation between Bahrain and Mongolia
Mongolia established diplomatic relations with Bahrain in 1998. Despite the massive geographical distance, economic opportunities for cooperation remain open.
Mongolia can learn from Bahrain’s experience in diversifying its economy beyond mining through building wealth on the ground by using the underground wealth. Bahrain has smartly used its oil revenue to create a sovereign wealth fund, develop banking, finance, technology, tourism, and industrial sectors—lessons that Mongolia could learn from.
The primary area for potential cooperation includes geological exploration in mining, renewables in energy and meat exports in agriculture. Mongolia has begun exporting halal-certified meat to the Gulf and gained certain recognition in their markets. The credits for this initiative go to the Mongolian embassy in Kuwait, responsible for Bahrain. Bahrain could become a market for Mongolian meat, cashmere, leather goods, and other food products including mutton while Bahrain could supply financial services, technology, and petroleum products to Mongolia.
Growing bilateral trade and investment could open talks on direct flights between Mongolia and Bahrain. Currently, discussions are underway to waive visa requirements for diplomatic and official passport holders.
During his official visit to Bahrain in late February 2025, Mongolian Deputy Prime Minister T.Dorjkhand met with relevant authorities to utilize the cooperation opportunities effectively and discuss investment opportunities in the aforementioned sectors.
Mongolian Deputy Prime Minister Dorjkhand Togmid and his Bahraini counterpart Sheikh Khalid bin Abdullah Al Khalifa met to discuss investment opportunities in Mongolia in the energy, mining, and agricultural sectors, cooperation in tourism and culture as well as Bahrain’s management real estate development and good practices in attracting foreign investment.
The Deputy Prime Minister T.Dorjkhand also met with Prince Sheikh Nasser bin Hamad Al Khalifa, the deputy chairman of the Higher Committee for Energy and Natural Resources, Commander of Bahrain’s Royal Guard and National Security Advisor to discuss potential cooperation especially in energy and invitation to participate in Mongolia’s Economic Forum this summer.
Additionally, Mongolia, Bahrain, and the UAE signed a tripartite Memorandum of Understanding on joint exploration and development of oil, gas, and mineral resources.
This concludes Bahrain’s story of successfully aiming for the stars and how Mongolia can cooperate with this country. I hope this overview provides useful insights.