er social benefits that the government bestows upon the Bahraini people. So, too, under intense pressure from Shiite opposition and in light of an increasing number of resident expatriates, the government instituted unemployment benefits in 2001. However, the funding for such programs is primarily derived from petroleum revenues. As such the funding and social welfare programs are highly sensitive to fluctuations in international oil prices. When oil prices are low such welfare measures create enormous fiscal deficits, currently in excess of U.S. $1 billion (Overview, 2002).
The growing demand in Bahrain for natural gas has resulted in contracts with Qatar which has improved regional cooperation. Such moves make Bahrain more attractive to foreign investors. Direct foreign investment is being sought by Bahrain, including a target of $600-$800 billion from the U.S. King Hamad is encouraging more openness to such investment. To this end in the past few years, Bahrain has cooperated with other nations in orde
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