Bahrain was once a chief center of pearling, but the industry declined in the 20th cent. Oil was found in 1931, and oil revenues have financed extensive modernization projects, particularly in health and education. Oil and petroleum products account for about 60% of Bahrain's export earnings. Bahrain has taken steps to diversify the nonagricultural sector of its economy, because it was long expected to be the first Persian Gulf nation to run dry of oil, but in 2018 it reported discovering oil and gas fields far exceeding its current reserves. Aluminum-smelting, banking and financial-services, ship-repair, textile-manufacturing, and tourism industries have been established, as have oil refineries that largely process Saudi crude. Bahrain is home to numerous multinational firms, and the government actively encourages foreign investment. The U.S. navy's 5th Fleet, which patrols the Persian Gulf, is based in Bahrain. There is some fishing, and dates, fruits, and vegetables are grown, but the majority of Bahrain's food is imported. Machinery and chemicals are also imported. Saudi Arabia is the main trading partner.
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