Bahrain was once part of the ancient civilization of Dilmun and served as an important link in trade routes between Sumeria and the Indus Valley as long as 5,000 years ago. Since the late 18th century, Bahrain has been governed by the Al Khalifa family, which created close ties to Britain by signing the General Treaty of Peace in 1820. A binding treaty of protection, known as the Perpetual Truce of Peace and Friendship, was concluded in 1861 and further revised in 1892 and 1951. This treaty was similar to those entered into by the British Government with the other Persian Gulf principalities. It specified that the ruler could not dispose of any of his territory except to the United Kingdom and could not enter into relationships with any foreign government other than the United Kingdom without British consent. The British promised to protect Bahrain from all aggression by sea and to lend support in case of land attack.
After World War II, Bahrain became the center for British administration of treaty obligations in the lower Persian Gulf. In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain joined the other eight states (Qatar and the seven Trucial Sheikhdoms, which are now called the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. By mid-1971, however, the nine sheikhdoms still had not agreed on terms of union. Accordingly, Bahrain sought independence as a separate entity and became fully independent on August 15, 1971, as the State of Bahrain.
Based on its 1971 constitution, Bahrain elected its first parliament in 1973, but just 2 years later, in August 1975, the Amir disbanded the National Assembly because the Parliament attempted to legislate the end of Al-Khalifa rule and the expulsion of the U.S. Navy from Bahrain. Political unrest broke out in December 1994 and included sporadic mass protests, skirmishes with local law enforcement, arson, and property attacks. In June 1995, the first Bahraini cabinet change in 20 years took place, producing mixed public response. In 1996, the Amir increased the membership of the Consultative Council, which he created in 1993, from 30 to 40, to provide advice and opinion on legislation proposed by the cabinet and, in certain cases, suggest new laws on its own. In 1998 Shaykh Hamad bin Isa Al Khalifa became Amir after the death of his father, Shaykh Isa bin Hamad Al Halifa.
Bahrain's small size and central location among Persian Gulf countries require it to play a delicate balancing act in foreign affairs among its larger neighbors. Possessing minimal oil reserves, Bahrain has turned to petroleum processing and refining, and has transformed itself into an international banking center. The new amir is pushing economic and political reforms, and has worked to improve relations with the Shi'a community.