Economy
From The Report: Bahrain 2015
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While Bahrain has witnessed strong growth in recent years, there are concerns that sluggish oil prices and rising debt levels will limit growth into 2015. However the finance and banking sector, which represents the kingdom’s second-largest economic contributor, is expected to continue expanding, with the country having emerged in recent years as a financial services hub, especially in regards to its Islamic finance and insurance offerings. Moreover, foreign direct investment (FDI) flows into the kingdom continue to grow steadily since 2009, totalling $989m in 2013, up 11% from $891m in 2012 and outpacing global FDI flows, which increased by 9% in the same period. Three of Bahrain’s industrial areas are included among a list of the top 20 global free zones of the future, with the additional investment incentives and benefits for foreign investors on offer expected to ensure the kingdom remains an attractive location for companies setting up in the region.

This chapter contains interviews with Kamal bin Ahmed, Acting Chief Executive, Bahrain Economic Development Board; Sheikh Ahmed bin Mohammed Al Khalifa, Minister of Finance; Le Luong Minh, Secretary-General, Association of South-East Asian Nations; Abdul Latif Al Zayani, Secretary-General, GCC; Alderman Fiona Woolf, Lord Mayor of London; and Mahmood Hashim Al Kooheji, CEO, Mumtalakat.

Articles from this Chapter

Overview

Bahrain fiscal policy: Spending increases and lower oil provides putting pressure on government finances
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Despite the gradual economic recovery seen in the US and parts of Europe, the GCC has witnessed strong growth in recent years, and Bahrain is no exception. With its main stock market index reaching a three-year high in mid-2014, and spending on infrastructure anticipated in the second half of the year, there has been a renewed sense of confidence and cautious optimism about the kingdom’s economy. On May 21, 2014, the IMF concluded its Article IV consultation with Bahrain. The report stated that…

Interview

Kamal bin Ahmed, Acting Chief Executive, Bahrain Economic Development Board (EDB): Interview
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Interview:Kamal bin Ahmed What needs to be done to ensure that Bahrain’s growth potential is communicated to investors and that perceived risks are adequately addressed? KAMAL BIN AHMED: EDB’s focus is on what we call “smart foreign direct investment”. These are businesses that will create quality jobs for Bahrainis, fit with our economic model and help support long-term, sustainable growth. The past few years have seen the financial services, logistics, manufacturing, healthcare,…

Interview

Sheikh Ahmed bin Mohammed Al Khalifa, Minister of Finance: Interview
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Interview:Sheikh Ahmed bin Mohammed Al Khalifa What does the level of interest in Bahrain’s issue of sovereign bonds in 2013 say about investors’ attitudes to the Kingdom and its prospects? SHEIKH AHMED BIN MOHAMMED AL KHLIFA: Bahrain returned to the international debt markets in 2013 with a $1.5bn 10-year Eurobond, which was five times oversubscribed. Government Development Bonds are part of the mix of instruments used by the government to finance budgetary deficits. The oversubscription…

Analysis

Bahrain making efforts to improve its fiscal position
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According to the IMF, Bahrain’s economy grew by 5.3% in 2013; however, this was expected to slow somewhat to 3.9% for the following year. One of the main challenges faced by the Bahrain government is how to reduce public spending, especially given downward pressure on oil prices in the latter half of 2014. In this respect, the government has been moving away from the counter-cyclical spending of recent years and is taking steps towards making expenditures more sustainable. An example of these efforts…

Analysis

Bahrain attracting an increasing flow of FDI with investor-friendly policies
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As part of the kingdom’s long-term development strategy, private sector investment and innovation is set to play a key role in Bahrain’s future prosperity. The country has a long history of trade and has created an attractive environment for companies wishing to invest and establish a base from which to do business in the Middle East and beyond. The Bahrain Economic Development Board (EDB), which is responsible for facilitating foreign direct investment (FDI) in the kingdom, noted a brisk upturn…

Interview

Alderman Fiona Woolf, Lord Mayor of London: Interview
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Interview:Alderman Fiona Woolf How can Bahrain’s experience be applied as London aspires to be an Islamic financial centre? ALDERMAN FIONA WOOLF: Bahrain has established itself as a leading centre for Islamic finance, and the UK is of course keen to discuss how we can work even more closely together for our mutual benefit. That is why we were delighted to host the first UK-Bahrain Islamic Finance Summit in London in 2013. This provided a platform for us to discuss and coordinate our regulatory…

Interview

Mahmood Hashim Al Kooheji, CEO, Mumtalakat: Interview
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Interview:Mahmood Hashim Al Kooheji What are some of Mumtalakat’s key highlights from the 2013 trading year? MAHMOOD HASHIM AL KOOHEJI: We saw a positive trend in our financial results for 2013, recording net profits of BD82.7m ($219.16m) compared to a loss of BD181.7m ($481.51m) in 2012. These positive results can be attributed to the implementation of our investment strategy throughout the year. Firstly, we grew our existing portfolio. We made considerable progress in completing the…

Analysis

Bahrain’s industrial zones offer a range of investment incentives
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While the kingdom prides itself on offering tax-free incentives to businesses, it has also been developing industrial zones with added benefits for foreign investors, including contracts protecting tenants against future tax changes and, in some cases, bonded warehousing, which provides companies with certain exemptions from paying import duties. Three such industrial areas were included among the top 20 global free zones of the future in a 2012 report by the Financial TimesfDi magazine, despite…