Bahrain is at a political and economic crossroads under the leadership of His Majesty the King of Bahrain, Shaikh Hamad bin Isa Al Khalifa, King of Bahrain. On the first anniversary of the National Charter, which passed with a 98.4% vote on February 14, 2001, His Majesty the King declared the Kingdom of Bahrain and the establishment of full constitutional institutions. On this occasion, His Majesty the King ordered the full reactivation of Bahrain's Constitution, including the amendments dictated by the National Charter.

In line with the second chapter of the Charter, the ruling system in Bahrain is a constitutional hereditary monarchy. This was amended to stipulate that Bahrain is a fully sovereign, independent Islamic Arab Kingdom. The Constitutional Authority will be the two Councils of Shura and Parliament. The selection of the Shura Council members will be by appointment and the selection of the Parliament members will be based on direct free elections. Municipal elections are to be held on May 9 of this year, while legislative elections are to be held on October 24, 2002.

The amendments of the Charter ensure equality between the Shura Council and Parliament on the legislative specialization for both councils, but the monitoring role will be performed by the elected Council.

The Charter gives equal rights to men and women, with all citizens having equal political rights and being entitled to elections and candidacy according to the law.

In order to ensure that no law contradicts the constitutional provisions, it was agreed to establish Constitutional Court to supervise the proper application of the constitutional rules and regulations.

The constitution was also amended to achieve complete independence of the Financial Control Bureau and facilitate its monitoring role.

These historic changes have awakened a heightened sense of responsibility amongst the Bahraini population, as the Government has shown a commitment to the resumption of democratic life in the Kingdom of Bahrain. As the government is committed to training and developing its human resources, the working population of Bahrain will be well equipped to fill the positions that are expected to be created by new investment activity which these developments yield.

Commercial, legal and investment laws in the country are continuously being enhanced to create the most accommodative and transparent economic environment possible. An example of this evolving system is the recent modification to the Commercial Companies Law.

In addition, the Amiri Decree establishing the Economic Development Board is a clear sign that the country remains committed to creating a free economy that can achieve long-term sustainable growth. Bahrain's international recognition in this regard is evidenced by the consistent ranking of the country as one of the top free economies in the world by the Heritage Foundation/Wall Street Journal Index of Economic Freedom.

The preceding factors clearly indicate that Bahrain strives to earn an undisputed leading position as the most open, transparent and conducive investment environment for investors wishing to establish their businesses in the kingdom.