Bahrain’s Performance on the Resource Governance Index
Bahrain received a “weak” score of 47, ranking 31st out of 58 countries. A “failing” performance on the Institutional and Legal Setting and Reporting Practice components contrasted with “partial” success on Safeguards and Quality Controls and the Enabling Environment.
(out of 58)
(out of 100)
|50||Institutional & Legal Setting||38|
|26||Safeguards & Quality Controls||59|
Institutional & Legal Setting (Rank: 50th/58, Score: 38/100) learn more
Bahrain's "failing" score of 38 was largely due to its lack of disclosure policies and the absence of an independent licensing process.
The National Oil and Gas Authority (NOGA) has licensing and regulatory responsibilities, with revenues accruing through production sharing contracts with foreign firms or directly from state-owned companies. Ultimately, the Finance Ministry receives all cash payments and deposits them in the treasury. Environmental impact assessments are required but not made public, and there is no freedom of information law.
Reporting Practices (Rank: 39th/58, Score: 40/100) learn more
While the government provides some information on extractive industry production and transfers to the Future Generations Reserve Fund, overall, Bahrain's disclosure policies are fragmented and incomplete, resulting in a "failing" score of 40.
There is little information about the licensing process, which often includes direct negotiations between companies and the government. However, in recent years contracts requiring legislative approval have been included in government publications.
Neither NOGA nor the state-owned Bahrain Petroleum Company (BAPCO) publishes financial statements, so it is difficult to trace government revenue flows from the extractive industries. The Finance Ministry publishes annual data on resource exports, production costs, taxes, and dividends, but does not include the financial balances of state-owned companies in its review of state accounts. The national budget does include annual oil revenue contributions to the Future Generations Reserve Fund and makes clear distinctions between resource and non-resource revenues.
Safeguards & Quality Controls (Rank: 26th/58, Score: 59/100) learn more
Bahrain's "partial" score of 59 is the product of contrasting oversight policies: the budget and the Future Generations Reserve Fund are subject to significant monitoring requirements, yet there is no effective regulation of state-owned companies.
NOGA's investment arm maintains full ownership of BAPCO, giving NOGA a major financial stake in the industry and little incentive to reform a licensing process that is uncompetitive and opaque. The legislature reviews production sharing contracts, but there are neither regulations limiting NOGA's discretion in the licensing process nor mechanisms for appealing licensing decisions.
However, Bahrain has taken steps to ensure the integrity of oil and gas funds. Regulatory officials and employees of state-owned companies cannot have a financial stake in the petroleum industry. A national audit office reviews resource revenues and submits annual reports to the legislature.
Enabling Environment (Rank: 15th/58, Score: 58/100) learn more
Bahrain received a "partial" score of 58, reflecting relatively high rankings on corruption control and government effectiveness and low scores on government accountability and democracy.
State-Owned Companies (Rank: 41st/45, Score: 14/100) learn more
A number of state-owned companies operate in the extractive sector. BAPCO, the largest, is active in all aspects of the petroleum industry. It sells oil domestically at undisclosed prices and supplies all of the nation's natural gas, probably subsidizing national energy consumption. BAPCO publishes little information on revenue generation, joint ventures, or quasi-fiscal activities. It does not appear to be subject to independent audits, and no law requires that it disclose its accounts.
Natural Resource Funds (Rank: 3rd/23, Score: 96/100) learn more
Bahrain deposits a portion of its oil revenues in the Future Generations Reserve Fund managed by the Finance Ministry. Rules for deposits into the fund are defined by law, and withdrawals are prohibited unless sanctioned by the legislature. It appears these rules are followed. Lawmakers review annual reports of the fund's investments, and these reports are published online. A national audit authority audits the fund and publishes its findings.View full questionnaire for Bahrain
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INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
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Key Economic Indicators
|GDP (constant 2011 international $ billion)||10.2||15.2||23.5|
|GDP per capita, PPP (constant 2005 international $)||23,726||28,068||21,345|
|Oil and gas revenues (% total government revenue)||76||91|
|Extractive exports (% total exports)||16||93||76|
|Sources: Oil and gas revenue as share of total government revenue from the Economist Intelligence Unit and the International Monetary Fund. All other data form the World Bank. GDP 2011 value from 2010.|