Interview: Kamal bin Ahmed
What is your outlook for economic growth in 2012 following the events of 2011?
KAMAL BIN AHMED: The situation in Bahrain is now stable and improving. Bahrain has always overcome issues in the past and has always moved on – its economic resilience was demonstrated again in 2011, during which we still saw year-on-year growth of roughly 2% despite economic disruption in the first quarter. The short-term support measures enacted by the government, combined with long-term economic reform, will help to ensure the economy continues to expand and that key sectors, such as financial services, downstream industries, and education and training continue to grow.
In spite of the challenges, we are still seeing strong investor interest in Bahrain. In 2011 the EDB attracted over $300m in new foreign investment, primarily in the banking and manufacturing sectors, with over 20 new companies establishing operations in Bahrain, including BASF, Geneva-based asset managers Notz Stucki, Canara Bank and JBF Industries from India, and global law firm DLA Piper.
To what extent have these events altered the Kingdom’s strategy of economic diversification?
AHMED: Despite the challenges of 2011, the EDB remains committed to its core focus on six key areas of the economy; namely, financial services, downstream industries, business services, logistics, and education and training. These industries all have bright prospects over the medium to long term, and we believe Bahrain has particular advantages in each. There are especially opportunities in infrastructure projects in the immediate future – we have almost $90bn of upcoming projects in the Kingdom, including the expansion of the airport and the GCC railway.
In line with Vision 2030, what expectations do you have for job creation for locals in the coming years?
AHMED: Bahrain’s modern international business credentials go back several decades, considerably longer than neighbouring markets. Its financial services sector has been thriving for nearly 40 years. With these decades of experience comes a certain dependability, sustainability and business wisdom that makes Bahrainis highly prized employees across the Gulf and the Kingdom an attractive investment destination. Bahrain has prudently diversified its economy and carefully tended to its expansion, ensuring that growth has remained steady and sustainable despite challenges.
What are the EDB’s expectations for foreign direct investment in the short to medium term?
AHMED: We saw nearly 20 international businesses from around the globe announcing approximately $300m of investments into the country in 2011, whilst the number of financial services businesses with Central Bank of Bahrain licences rose from 401 to 417 by the end of March 2012. Furthermore, the Kingdom’s economy grew approximately 2% in 2011, despite the global economic and regional challenges, and is forecast to expand at around 4% in 2012.
The large number of international investments into Bahrain from India through Europe to the US over the last year demonstrates that the Kingdom’s wide-ranging attractions to foreign investors remain as compelling as ever; from having the most skilled workforce in the region and a liberal business environment to the low costs, competitive taxation and ready access to large global markets, including the $1trn Gulf market.
Considering the current economic climate in the West, how is the EDB’s focus of attracting investment shifting towards the East?
AHMED: The East is an important focus area for Bahrain, particularly India, Singapore and China. The benefits of Indian businesses investing in ICT have helped Bahrain to become recognised as the Middle East’s ICT leader in the 2012 United Nations Global E-Government Survey, and to be ranked in the top 10 countries in online service delivery and e-participation.
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