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Report | The Report: Bahrain 2015

As the region faces up to the challenge of the recent drop in oil prices, Bahrain’s fundamentals indicate the kingdom is well positioned to weather the dip. The focus on diversification goals outlined in Economic Vision 2030 is helping establish a more competitive and sustainable economy in the kingdom. The financial sector, which represents Bahrain’s second-largest GDP contributor, has continued to recover robustly since the global economic downturn.

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Chapter | Legal Framework from The Report: Bahrain 2015

This chapter contains an outline of the legal framework in which local and foreign investors operate, including a review of the effects that new labour legislation will have on employers, an examination of corporate law in Bahrain and a look at a proposed law to address the threat of cyber crimes. This chapter contains a viewpoint from Qays H Zu’bi, Senior Partner, Zu’bi & Partners.

Chapter | Telecoms & IT from The Report: Bahrain 2015

Privatisation and liberalisation initiatives have led to increased competition in the Bahraini telecoms sector in recent years, making it one of the most dynamic in the kingdom’s economy, with telecommunications accounting for roughly 4% of GDP in 2012. Mobile penetration stood at 166% in 2013, well above the regional average of 110% and the global average of 96% while the roll out of 4G long-term evolution services is accommodating the huge rise in data demand. Meanwhile the IT sector continues to thrive, with 2013 figures showing that 82% of households in Bahrain had internet access and more than 90% had computers. Government services have increasingly become available online since 2007, with The National eGovernment Strategy for 2016 aiming to bring over 90% of key services used by Bahraini residents and businesses online, including business and office registration, banking services and e-tendering of government contracts. This chapter contains a roundtable discussion with Alan Whelan, Group CEO, Batelco; Ulaiyan Al Wetaid, CEO, VIVA Bahrain; and Mohammed Zainalabeddin, General Manager, Zain Bahrain.

Chapter | Health from The Report: Bahrain 2015

The Bahraini constitution guarantees access to health care for all nationals. The government budget allocation for health care rose from $1.4bn in fiscal year 2011/12 to $1.8bn for 2013/14, while the sector currently contributes 2.5% to GDP, a figure set to grow to 7% by the end of the decade. Attitudes towards health issues among the local population shifting in recent times; an increased focus on healthy living is expected to fuel demand for health products while the government’s drive to increase the participation of the private sector to meet the medical needs of the growing population will provide further opportunities moving forward. As well as catering to local demands, government efforts are in place to expand Bahrain’s medical tourism offering, with various projects aimed at capturing a slice of the GCC’s medical tourist market.

Chapter | Education from The Report: Bahrain 2015

Bahrain was the first country in the region to start developing universal education and today this continues to form a central tenet of government policy. The World Economic Forum currently ranks Bahrain 48th worldwide in terms of the quality of its education system, and the kingdom has a literacy rate of 91%. In June 2014 the Higher Education Council approved Bahrain’s first National Strategy for Higher Education and Scientific Research. The strategy focuses on six priority areas for reform and improvement, including the development of quality teaching, increasing student engagement and the enhancement of higher education institutions, while work placement schemes and vocational training aimed at matching skills with high-growth areas are also key elements. Government goals to attract greater private sector participation present a bright outlook for investors looking to target the segment. This chapter contains an interview with Solveig Nicklos, Director, Bahrain Institute of Banking and Finance.

Chapter | Tourism from The Report: Bahrain 2015

Tourism’s total contribution to Bahrain’s GDP reached $3.26bn, or 10.2% in 2013, with this is expected to increase by 7.6% in 2014 and then by 5% each year until 2024. Continued investment in infrastructure will help drive future growth in the sector, with the $980m expansion of Bahrain International Airport due to increase capacity to 13.5m passengers per year. Meanwhile, plans to expand the country’s already vibrant hotel offering are under way, with five new five-star hotels due to open over the next few years. Additionally, the kingdom is looking to unlock its rich potential as an ecotourism destination while also boosting its reputation as a regional sporting destination, building on the success of the Formula 1 Bahrain Grand Prix, a major event on the kingdom’s sporting calendar which attracts visitors from all around the world.

Chapter | Industry from The Report: Bahrain 2015

Industry in Bahrain continues to grow as increasingly low borrowing rates, particularly for manufacturing, demonstrate banks’ willingness to finance projects in the sector. Bahrain’s manufacturing sector accounts for 15% of GDP making it the country’s third-largest economic contributor after hydrocarbons and financial services, and is expected to reach 20% of GDP within the next decade. The sector is dominated by basic metals, refined petroleum products and chemical products, and in 2012 employed 13% of the total workforce in the kingdom. Bahrain is home to the sixth-largest aluminium smelter in the world, which has encouraged the clustering of several downstream businesses, while the kingdom’s burgeoning pharmaceuticals sector was worth $260m in 2012 and is expected to rise by a compound annual growth rate of 10.1% to 2017. This chapter contains interviews with HE Dr Hassan Fakhro, Advisor to the King for Economic Affairs; and Tim Murray, CEO, ALBA.