Known in ancient times as Dilmun, Bahrain was an important center of trade by the 3rd millennium B.C. The islands were ruled by the Persians in the 4th century A.D. , and then by Arabs until 1541, when the Portuguese invaded them. Persia again claimed Bahrain in 1602. In 1783 Ahmad ibn al-Khalifah took over, and the al-Khalifahs remain the ruling family today. Bahrain became a British protectorate in 1820. It did not gain full independence until Aug. 14, 1971.
Although oil was discovered in Bahrain in the 1930s, it was relatively little compared to other Gulf states, and the wells are expected to be the first in the region to dry up. Sheik Isa ibn Sulman al-Khalifah, who became emir in 1961, was determined to diversify his country's economy, and he set about establishing Bahrain as a major financial center. The country provides its people with free medical care, education, and old-age pensions.
Conflicts between the Shiite and Sunni Muslims are a recurring problem in Bahrain. The Sunni minority, to which the ruling al-Khalifah family belongs, controls nearly all the power and wealth in the country. the Shiites continue to agitate for more representation in government, and minor violent clashes have led to about two dozen deaths since 1994.