Bahrain cuts reliance on oil wealth
Bahrain may have been the first Gulf state to discover oil, but it was also the first to recognise the need to develop an economy less reliant on the sticky black gold.
The archipelago of 40 islands covering 711.9 square kilometres in the Arabian Gulf, has been described as the most business friendly and the most socially liberal state in the Middle East.
Bahrain is the only member of the Gulf Cooperation Council to permit 100 per cent foreign ownership of companies. Foreign direct investment is expected to reach US$2 billion this year from US$1.7 billion in 2007.
Bahrain is not interested in being the biggest, but in being a steady and reliable partner, said Mohammed Bin Essa Al-Khalifa, the chief executive of the Bahrain Economic Development Board.
'We must create a sustainable model,' Sheikh Mohammed said. 'We want foreign investors to develop our people to serve the region. We want long-term partnership that last generations not quick money.'
Despite the global financial crisis, Sheikh Mohammed said Bahrain was still looking for economic growth of between 3 and 5 per cent. That compares with 6.6 per cent growth in 2007.
He said with growth momentum now coming from Asia and the Middle East, Bahrain needed to focus more on the East, building on the government's long-term policy of promotion of non-oil industries.
Fifteen years ago, Gulf countries were mostly dependent on earnings from oil. But oil now accounts for only 4 to 5 per cent of Bahrain's gross domestic product, making it the least oil dependent of the Gulf states.
Bahrain is investing US$2.9 billion to upgrade its logistics infrastructure, including a bridge to Qatar, an airport expansion, a logistics zone and a larger port. The country is also building a US$2 billion convention and exhibition centre.
Debbie Stanford-Kristiansen, deputy chief executive at the Bahrain Exhibition and Convention Authority, said construction of the centre would begin by the end of this year. The 100,000-square-metre project, comprising 75,000 sq metres of exhibition floor space and 25,000 sq metres of convention centre is expected to be completed by July 2012.
Bahrain's current exhibition centre is running at 100 per cent occupancy for 2009, with many bookings already confirmed for next year. Ms Stanford-Kristiansen said because of limited space, the organisation has turned away 48 conventions and exhibitions so far this year.
She said international associations and corporations have realised the value of Bahrain's strategic location as a gateway to the Saudi Arabia and Northern Gulf markets.
APM Terminals opened the Bahrain Gateway terminal at Khalifa bin Salman Port in April, offering shipping lines new ways to optimise their upper Gulf route network to serve the growing regional market.
APMT managing director Steen Davidsen said the port aimed to handle 1 million twenty-foot equivalent units (teu) in five years, with 650,000 teu to be transshipped to the upper Gulf.
Tomorrow (final part): Bahrain's finance sector
