Long an important commercial centre of the northern Persian Gulf, the traditional economy was based on pearling, fishing, boatbuilding, and import trade. Harbour facilities were poor; ocean vessels had to anchor in the open roadstead 2–4 miles (3–6 km) offshore.
The discovery of petroleum on Bahrain (1932) revolutionized the city’s economy and appearance, with the construction of many modern buildings. Manama developed as a trade, financial, and commercial centre; it is the seat of numerous banks. The headquarters of the Bahrain Petroleum Company (BAPCO), however, are at
ʿAwālī, in the centre of Bahrain island. Manama was declared a
free port in 1958, and the new deepwater port facilities of Mīnāʾ Salmān, in the protected bay of al-Qulayʿah Inlet, southeast of the built-up area of the city, were opened in 1962. With storage and refrigeration facilities, and equipment for docking and repair of large oceangoing vessels, it is now one of the most important ports of the Persian Gulf. The island and town of
Al-Muḥarraq, Bahrain’s second largest
community, lies just northeast; the two cities are linked by a causeway 1.5 miles (2.5 km) long. Pop. (2001) 143,035.