Interview: Sheikh Khalid bin Abdulla Al Khalifa
What are Bahrain’s key economic strengths?
SHEIKH KHALID BIN ABDULLA AL KHALIFA: As the most established business centre in the Gulf, Bahrain has many enduring economic strengths. A decade of reform has established fundamentals that have made it a key gateway to the GCC economy – worth around $1trn – and it is the Gulf’s largest financial centre, with over 400 institutions. Our people are among the most skilled in the region, and we have an economy with strong financial and industrial sectors that give international companies the freedom to operate unhindered, underpinned by a trusted and transparent regulatory framework. As a government we work to ensure that costs remain low relative to the rest of the region and that our tax system is competitive. Combining these attributes with our location at the heart of the region, and linked by a causeway to the largest market, Saudi Arabia – particularly its economic heartland in the Eastern Province – makes Bahrain a highly attractive business destination. The government is focused on supporting and improving this environment to maintain long-term sustainable growth.
Where is the greatest need for additional reforms to further support the economy of Bahrain?
SHEIKH KHALID: The Bahraini economy has shown its resilience in recent times and remains on course for growth in 2012. Despite the challenges that 2011 presented, the economy continued to grow. The government has confidence that the economy is robust and resilient following 10 years of committed economic reform. Bahrain is ranked 12th globally, and first in the MENA region, according to the 2012 “Index of Economic Freedom” by the Heritage Foundation. This assessment was made following a study of Bahrain’s labour regulations, fiscal policy, government intervention into business, property rights, intellectual property protection and many other factors. The government will ensure that further economic reforms seek to build on the success achieved over the past decade. We will continue to invest in an education programme that has made Bahrainis valued employees across the region, while maintaining the programme of economic diversification and providing support and incentives to prospective investors. Creating the right environment for investment will always be a priority for the government.
What developments can be expected in terms of infrastructure in the Kingdom?
SHEIKH KHALID: Bahrain is a key logistics hub in the region, with the shortest travel time between its port, airport and logistics processing zones. We are constantly reviewing our infrastructure to ensure it meets the needs of the economy and international standards. To that end, Bahrain International Airport, which connects to over 50 international destinations, will be expanded by 50%, and we are reviewing plans for a new railway between Bahrain and Saudi Arabia to improve connectivity to the GCC’s largest economy. We are also investing several hundred million dollars in our road network. We will always ensure that our infrastructure matches our ambitions for economic growth.
As the chairman of Mumtalakat, what future role do you see the institution playing in the economy?
SHEIKH KHALID: With over 35 companies in its portfolio and assets of $8.8bn, Mumtalakat plays a vital role in building an ever more dynamic and internationally competitive economy, and growing the wealth of Bahrain to the benefit of all of its citizens. One of Mumtalakat’s recent successes has been to bring in private sector partners, and diversify and add value to our portfolio. Adding value to existing companies remains a key focus. Raising corporate governance standards throughout the portfolio to comply with the Code of Corporate Governance is a priority for the institution. We will ensure Mumtalakat continues to make strategic decisions; extracting value for the Kingdom on its key non-oil and gas assets, strengthening corporate governance standards and procedures, while making investments that will benefit the country now and for future generations.
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