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82                         Records of Bahrain

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                          ... *                               BRITISH RESIDENCY,
                                           J                      BAHRAIN             )
                                Despatch 34                               V ftlf? v*ij . s«J I
                                CONFIDENTIAL                   24th April, 1950.-
                                 39^71756
                                Sir,
                                          I propose in tills despatch to endeavour
                                to analyse the effect which the discovery and
                                exploitation of oil in Buhrain hus hod and is
                                lllcoly to huve on the people of the islands espec­
                                ially from the political angle,   This is a mattor
                                which I have been considering for some time and I
                                have reached the conclusion that while the oil
                                operations have greatly increased the material
                                prosperity of the islands and possibly indeod because
                                of this the offect they have had on the minds of the
                                people is astonishingly small,   In fuct uny slight
                                political stirrings there may have been are to be
                                attributed to the wireloss and Egyptian newspapers
                                rather than to the oil operations.
                                2.        It must be remembered that Bahrain is a
                                port which has become a city state and that there is
                                nothing which can be called a "nation",   There are
     i
                                three main elements.
                                      (1)   the Sunni ruling family,
                                      (2)   the merchants of various races, languages
                                           and religions, and
                                      (3)   the Shiah cultivators of the gardens who
                                           are more or loss serfs.
                                All three are extremely prosperous,   The Shaikhs
                                are drawing large incomes from the oil royalties,
                                trade of all kinds flourishes and the Shiah cultiv­
                                ators provide the bulk of the well-paid labour
                                whichv the oil company employs. A fourth element
                                should perhaps be mentioned, viz. the pearl-divers
                                who ore mostly miscellaneous Arab tribesmen and ex­
                                slaves.   But for the udvont of oil they would- be
                                in a parlous plight as the Japanese cultured pearl
                                dealt a heavy blow to their industry before the war
                                and the war und the conditions which followed it
                                removed all hopes of its revival,   The industry
                                lingers on but fewer bouts go out each year and the
                                divers are reconciled to finding a steadier and less
                                risky employment with the oil company.
                                3.        although the development of the oil
                                industry has undoubtedly raised the standard of
                                living of the people it lias not produced u demand
                                for the hiijer forms of education. The primary
                                schools uro crowded and many boys have to be turned
                                away und the recent census has shown that ubout 10%
                                of tho population are now 11torate - a high propor-
                                tioh for tho Middle East.   As soon, howover, as tho
                                boys can reud and write a little English they loavo
                                school to seek employment with the oil companies
                                or to join their fathers' businesses in the towns.

                              His Majesty's Principal Secretary of State      /As a
                                     for Foreign Affairs,
                              The Foreign Office. London, S.W.lf
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