Page 326 - Records of Bahrain (7) (ii)_Neat

716 Records of Bahrain

PICKET

merchant community grow up in Eastern Saudi Arabia to

challenge Bahrain's hegemony of trade until the Arabian
American Oil Company began to develop a local purchasing
policy and to encourage local merchants to import on its
behalf. This development has, however, been slow and has
been retarded by Saudi Arabia's shortage of foreign currency,
Saudi merchants have therefore continued to buy through
Bahrain houses, from Iwhom they can obtain credit and who, being
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established in the Sterling Area, have access to all the foreign
exchange they require for their trading operations. Moreover
Bahrainis arc treatec ns Saudis in the Kingdom,, and many have
branches there which serve as ^wholesale and retail outlets
for the goods brought in transit through Bahrain.
13. These traditional ties, jv/hich have been of benefit
to both Bahrain and Eastern Saudi Arabia, will not lightly
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or quickly be broken, It is ; however, certain that Eastern
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Saudi Arabia's rulia ice on Bahrain's trading skill and credit—
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facilities will gradually decrease, as much from the actions
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of the Bahraini merchants themecivon as from those of Saudi
importers. Bahrain-merchants already have branches in Saudi
Arabia and, increasingly, are ordering goods for direct
shipment there. The leading Bahraini merchant has told my
I Commercial Secretary that his eyes and activities are focussed

on Saudi Arabia to the exclusion of Bahrain, where lie finds
transit and storage charges too high to permit the profitable

use of Bahrain a6 a transit centre for Eastern Saudi Arabia.
This merchant is building a bonded warehouse at Dammam.
This is a facility which is not available in Bahrain, where
the Government huve still not announced any policy for the now
deep-water port of Mina Sulinan arid the fi’oe transit uroa which
will adjoin it in spite of being advised to do go no early
SECJIKT /as. # •