Interview: Sameer Abdulla Nass
What opportunities exist to develop the financial ecosystem for entrepreneurship and small and medium-sized enterprises (SME) creation?
SAMEER ABDULLA NASS: The most pressing challenge for entrepreneurs and SMEs is related to their ability to secure financing. Understandably, many banking institutions have strong prerequisites and risk-aversion mechanisms that limit their participation in SME financing. In order to facilitate SME access to credit, the BCCI recommends the establishment of a local credit ratings agency. This will boost confidence and address financing obstacles for SMEs.
On another note, there is ample room to enhance the domestic venture capital environment. Local economic stakeholders must work together to make this a reality and raise awareness in the SME community of the possibilities this offers for their financing needs. The Ministry of Industry and Commerce has created a specific department to address SME issues, as well as supporting incubators and start-up accelerators to boost the creation of private businesses in the kingdom.
In what ways can the private sector contribute to expanding business activity in non-oil sectors?
NASS: The private sector and the government are working together to identify ways to restructure the economy and lay the foundations for continued sustainable growth in the years to come. Other countries in the region, particularly Saudi Arabia, are also diversifying their economies, and there is little doubt that GCC countries are becoming increasingly internationally competitive. Bahrain therefore needs to undergo a strategic restructuring of its economy, focusing on sustainable growth while complementing other economic developments in the region.
In this context, Bahrain must continue reducing its dependence on hydrocarbons, and identify sectors that can add value to the economy and create jobs for the local population. One key sector is tourism, including medical and education tourism. We are seeing shortages of medical beds in the GCC, providing an opportunity for the local medical sector to attract patients from the region and abroad. Medical tourism has ample potential, provided the country creates laws and regulations that support investment and growth.
The private sector plays an essential role in diversification efforts, and because approximately 80% of local businesses are SMEs, the regulatory framework is catered to their needs. The government is privatising many public services and providing opportunities for local businesses to handle overall operations, which ultimately will improve efficiency and productivity. The government, in turn, is limiting its role to regulating and overseeing development to ensure standards of quality are maintained. This process is already under way, but there is still much room to continue developing the local economy in this manner.
How can labour market reform strengthen the business environment and boost private sector growth?
NASS: Advancements are being made to create a national certification body, with the purpose of having every local trade or service specialist, in every sector of the economy, properly trained, certified, tested and licensed. It is currently in a pilot phase, and we are confident that this kind of approach will encourage trainees to develop their skills and create more opportunities to advance their careers. At the same time, a national certification body will help increase efficiency, productivity and overall quality of service.
This is a long-term programme, and we might not see the benefits of it immediately. However, it will advance the professionalism of the entire labour market.
On a separate note, the kingdom is also making notable strides in boosting gender diversity throughout the local business community. The young and highly educated female population is ready to contribute at a much higher level than it currently does to the sustainable economic advancement of the country.
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