Q.Bahrain is one of the freest economies of the Middle East and although it is a small country it has always managed to attract big corporations from overseas that use the country as their springboard to the Gulf and the MENA region in general. However, the economy of Bahrain and the image of the country have been affected due to the generalised uprisings following the Arab Spring. What has been the real effect to the development of new industrial projects in Bahrain and what to the overall economy?
A. The Bahrain International Investment Park was established in 2005 and by 2010 a total of 60 new projects had been approved to locate operations here. (26 of these projects were FDI). This works out at an average of 10 projects per year.
In 2011, 12 new companies (5 FDI) committed to establishing their operations here. By June 2012 a further 15 new projects (10 FDI) were approved to locate operations here. Included here are some of the largest companies in the world --BASF and SIEMENS from Germany and JBF from India. By June 2012 total committed investment had grown to BD551m up from BD327m at the end of 2010. This trend is continuing into the 2nd half of 2012. From these figures it is clear that the development of new projects into the Bahrain International Investment Park has increased significantly over the past 2 years.
Q. A new Economic City is in the process of being developed in Bahrain under the umbrella of the ministry of industry and commerce. You said recently that it will create a paradigm shift in terms of the economy, creating new industrial and business clusters. Which will be the preferred business to be welcome to the city and what is the development stage of it?
A. The New Economic City represents a major investment by Bahrain in its future and in achieving the aims set out in Bahrain Vision 2030. It sets out an ambitious plan for the phased development of an integrated economic city to be constructed between now and 2035 for a new city totaling 93 sq. km. in area.
The local Bahraini population is projected to grow from .6 million at present to 1.0 million by 2040. The economy will diversify towards value adding manufacturing and service sectors from its current focus. To accommodate the demand generated from the manufacturing sector alone an additional approximately 7,800 hectares of land will be required.
Bahrain intends to reinforce its status as one of the top 'ease of business’ destinations’. What will differentiate the fully integrated NEC from its competitors will be unique characteristics in the region;
This city will generate a GDP of BD 5 billion annually by 2040 which will represent 20% of the Bahraini economy at that time. It will significantly improve productivity and create approximately 243,000 new jobs with the majority of these jobs in the Services sector.
Whilst the selection of specific sectors and projects to be targeted will be on the basis of ongoing market research identifying business and market needs and projected future trends, the prime focus will be on prioritizing and developing downstream and high value adding manufacturing sectors such as those in the areas of Automotive, Electronics/Electrical, Food Products, Metal Based Products, Pharmaceuticals, Plastics and related sectors, particularly in the parts of these sectors as they relate to the regional and wider economy.
It is also intended that it will become a hub of world class export oriented service sector to cater to the demands of neighbouring and international markets, such as Education, Information and Communications Technology, Logistics and Business Process Outsourcing.
In addition, it will focus on emerging innovative sectors, such as Advanced Manufacturing Sub-Sectors (Robotics, High Precision Technologies, and Information Technology), Energy Conservation Sub-Sectors (Green Technology, eRecycling) and areas such as Solar Technology, Wind Technology and Geothermal Components.
The Cabinet Subcommittee for Infrastructure & Services has reviewed the project. The choice of locations has been reduced to two (2) and these are currently being evaluated on a fast track basis. Once the Cabinet is satisfied with the chosen location specific studies (Environmental, Traffic Impact and such will be undertaken prior to commencement of detailed design.
Q. There is also a new expo city that according to BECA will be fully operational by 2013. What are the competitive advantages of Bahrain in the MICE market against its Gulf neighbours?
A. Bahrain is well-positioned for exhibitions and conferences and will continue to have competitive advantage for the MICE (Meetings, Incentives, Conferences and Exhibitions) sector due to its historical strategic geographic location in the region.
Through the Bahrain – Saudi Arabia causeway, Bahrain has connection to the very high population of Saudi Arabia and with the new planned causeway connection to Qatar along with the potential future GCC railway transport system, Bahrain will have the added future market advantage and easy access to the extended GCC market. Excellent infrastructure, business and financial environment, multi-cultural lifestyle, one of the freest economies in the region gives further advantage to Bahrain’s position in the MICE market.
Discussions are on-going with private and financial sectors to attract equity participation and put in place the financial structure for the future “Expo City” which is planned to be developed in phases. The Phase 1 of the facility is currently estimated to be operational possibly by late 2015 or early 2016.
Q. According to independent forecast, real GDP growth in Bahrain will average 3.6% in 2012-16 a lower growth than that of its neighbours. What are the ministry real policies to stimulate private-sector growth and foreign investment?
A. Exports play a very important role in stimulating private sector growth. The Ministry has taken a significant initiative in collaboration with Bahrain Chamber of Commerce & Industries to establish an Export Development Centre in Bahrain. The Centre is expected to be operational by early next year. Other initiatives to stimulate private sector growth include provision of industrial lands and associated infrastructure, single window clearance system for industrial projects through Bahrain Investors Centre, customs duty exemptions, increased market access through bilateral and multilateral trade agreements etc. BIIP (Bahrain International Investment Park) has attracted significant foreign investment and the proposed new economic city is another step in this direction.
The Kingdom of Bahrain has always been the Gulf’s technological pioneer. With their open and forward-thinking approach, Bahrainis have proved to be an ideal testing ground for the introduction of new technologies to the region and Bahrain has experienced a fast rate of innovation. Bahrain has the Middle East’s most liberal and advance information, communications and technology (ICT) infrastructure and policies. The ICT and E-Commerce Directorate in the Ministry promotes opportunities in this area and facilitates new projects. Similarly the Ministry encourages and facilitates incorporation of Professional Services and Management Consulting industries.
Q. Tackling down the unemployment is one of the government priorities. Within this frame, small and medium enterprises are seen as engines to reduce the unemployment rate. What is the strategy of the Ministry to help reduce unemployment and improveeducation means and training services?
A. Small and Medium Enterprises (SME’s) are not only engines to reduce unemployment but are also important contributors to our GDP. Developing Small and Medium Enterprises and ensuring their sound growth is a major priority of the Ministry of Industry & Commerce. An apex, high level Committee chaired by the Minister of Industry & Commerce co-ordinates all important SME related activities in the Kingdom of Bahrain. This includes vocational training and related services. The Committee has representatives from Bahrain Polytechnic and other training agencies as well as LMRA (Labour Market Regulatory Authority).
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
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Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession. Bahrain is a small island in the Arabian Gulf with an incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain. Banagas, Nass Corporation, BBK and DHL were GGC strategic partners in the development of the series among others.
FindMe in Bahrain is available at the local bookstores Jashamal and online as well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.
FindMe in Saudi offers a multi-faceted overview combining business and leisure, economy and heritage. The book aims to capture the current development of Saudi Arabia in the words of the people who live and work there. It is an authoritative source of information for investors, businessmen and travellers produced to firmly position KSA as an attractive investment destination.
In contains general information about the country´ economic performance and who is who as a sectorial overview and a leisure guide.
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