Economy
From The Report: Bahrain 2016
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Increasing revenues and reducing spending have been established as the core objectives of Bahrain’s economic policy, with subsidy reduction across the board likely to be a common theme in 2016. After energy, the financial sector continues to be the second-largest contributor to GDP, accounting for 16.5% of the total in 2014. This is followed by manufacturing which comprised 14.4% of GDP. Meanwhile the drive for greater private sector participation in the economy, particularly from small and medium-sized enterprises (SMEs), continues apace, and currently 97% of all companies in the kingdom fall into the micro or SME category, between them accounting for almost 30% of GDP. In recent years various government and non-government schemes have been launched offering SMEs financing, training, advisory services and infrastructural support.

This chapter contains interviews with Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board (EDB); Shaikh Mohammed bin Essa Al Khalifa, Chairman, Tamkeen; and Mahmood Al Kooheji, CEO, Mumtalakat.

Articles from this Chapter

Overview

Broad appeal: The kingdom is taking a holistic approach to economic development
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Bahrain’s economic story over the past year is one of two parts: while the government has given much attention to the nation’s stubborn fiscal deficit and a challenging process of subsidy reduction, a longer-term focus has remained on the objective of economic diversification that the kingdom established in the early years of this century. Progress has been made regarding these concerns, in the face of the challenges presented by a precipitous decline in oil prices and regional unrest. Fiscal…

Interview

Strategising for growth: OBG talks to Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board (EDB)
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Interview:Khalid Al Rumaihi Which countries and sectors is the EDB focusing on in terms of foreign direct investment (FDI)? KHALID AL RUMAIHI: Our long-term trading partners remain key targets, including the US, EU countries such as Germany, France and the UK, and our GCC neighbours such as Saudi Arabia and the UAE. However, we are also increasingly looking east, which reflects the broader trend of economic power shifting towards Asia, especially since these markets account for a large proportion…

Interview

Supporting to succeed: OBG talks to Shaikh Mohammed bin Essa Al Khalifa, Chairman, Tamkeen
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Interview:Shaikh Mohammed bin Essa Al Khalifa What changes has Tamkeen undergone that reflect its core vision and principles, and how will its success be monitored? SHAIKH MOHAMMED BIN ESSA AL KHALIFA: After extensive consultations with our stakeholders and the public, 2015 saw a year of transition for Tamkeen, with a shift towards a customer-oriented model. We aim to create comprehensive support solutions that cater to the two main groups we serve: individuals and businesses. Each group…

Analysis

Exploring options: The government faces a tricky task over subsidy cuts
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In a low-tax nation such as Bahrain the obvious part of the balance sheet to look at when addressing a stubborn fiscal deficit is government spending. It is hardly surprising, then, that over the past year the question of government subsidies has come to the fore in the public debate on the nation’s challenging economic situation. While the Gulf Assistance Programme has allowed Bahrain to maintain its capital spending levels, current spending is still underwritten by government revenue, and with…

Interview

Diverse opportunities: OBG talks to Mahmood Al Kooheji, CEO, Mumtalakat
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Interview:Mahmood Al Kooheji With Mumtalakat aiming to double its assets under management in the next seven years, what specific areas are you targeting? MAHMOOD AL KOOHEJI: We are looking to grow our assets both through the development of our existing portfolio and through acquisitions. We have already signed several acquisition deals in the first half of 2015. We look at any opportunity on a commercial basis, and we are looking for companies and management teams that share our values and…

Analysis

Solid investment: The sovereign wealth fund is eyeing further expansion
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Despite declining oil prices and a renewed focus on fiscal contraction, one government body has bucked the consolidation trend and embarked on a new phase of expansion. Established in 2006, Bahrain Mumtalakat Holding Company is the independent holding company for Bahrain’s strategic non-oil-and-gas-related assets, and as such is the government’s chief investment division. It is a medium-sized player, ranked by the Sovereign Wealth Fund Institute (SWFI) as the 42nd-largest such fund in the world.…

Analysis

Small and medium at large: The government’s support for SMEs demonstrates recognition of their importance
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One of the unfortunate consequences of the recent fall in oil prices is a regional tightening of lending conditions for small and medium-sized enterprises (SMEs). The vulnerability of smaller firms to business interruptions means that lenders adopt a cautious stance, often demanding more collateral or stricter documentation standards, and offering shorter tenors. However, while Bahrain’s banking industry is not immune to this tendency, the importance of SMEs to the economy has prompted the government…