Interview: Khalid Al Rumaihi
What infrastructure is being implemented to generate sustainable economic growth?
KHALID AL RUMAIHI: In terms of hard infrastructure, there are a number of major tourism-related projects we expect will support an expansion of the role that the tourism sector plays in Bahrain’s economy. Strong tourism infrastructure will not only bring in more visitors and encourage them to stay for longer, it will also have positive impacts on other areas, including transport and logistics, construction and retail. Hard infrastructure upgrades taking place in other sectors include Bahrain Petroleum Company and the sixth pot line at Alba; both are key developments that will enhance long-term productivity, and increase the role of industry and downstream manufacturing in economic growth.
In terms of soft infrastructure, we are seeing positive momentum in the financial technologies sector, where Bahrain has introduced a regulatory sandbox, alongside a range of other measures to encourage entrepreneurship. Globally, technology and connectivity are transforming sectors, so it is important to create an environment where the private sector is able to build upon this opportunity. As such, we have opened the possibility of 100% foreign ownership in 98% of sectors, along with a host of other reforms. For example, we reduced the minimum capital required for starting a business, and we are looking at introducing a new bankruptcy law to make it easier for entrepreneurs to start, experiment, fail and start again. Combined, we think these hard and soft infrastructure projects will support sustainable non-oil growth.
How will education foster growth in the main sectors being targeted by the EDB?
AL RUMAIHI : We are mainly focusing on five sectors: financial services, manufacturing, logistics, tourism and ICT. In addition, we are looking to enhance our support for new start-ups and small and medium-sized enterprises across all of these areas. These are sectors where we believe there are significant economic transformations taking place and new opportunities opening up. Additionally, these sectors play to Bahrain’s fundamental strengths: its regional connectivity, competitive costs and skilled, bilingual human capital.
Underpinning all our work, we aim to ensure that people have access to training and education throughout their careers, as having a workforce that has the skills and capability to adapt to new jobs and technologies will be essential for continued economic growth. Education throughout the career cycle will be increasingly important because in 10 or 20 years, many of us will find ourselves in jobs that do not yet exist. Meanwhile, generous support from Tamkeen is helping us keep education affordable and widely available. We are also seeking to align the education sector with industry demand. Achieving this will require better cooperation among educators, policymakers and businesses.
In what ways is the global macro-investment environment affecting the Bahraini economy?
AL RUMAIHI: The economic transformation taking place in the GCC region as it diversifies away from a reliance on oil is very promising, and it is clear that it is creating interest and excitement among investors as well. Bahrain is seeing record levels of foreign direct investment (FDI) through the EDB. After doubling to $280m in 2016, FDI levels are expected to reach over $700m in 2017, led by a major investment from Amazon Web Services, which will be establishing its first administrative base in the Middle East in Bahrain.
There are still significant obstacles to attracting FDI to Bahrain, such as the lower oil prices and perceived regional political volatility. However, we think that the new normal in oil prices and other challenges could actually be blessings in disguise, because they can help drive necessary reforms and improve efficiencies. This is important groundwork that investors will certainly be looking for when they consider investing in Bahrain.
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