Analysis Economy The Gulf island state’s vision for recovery and growth By Liz Bains August 10, 2022 Creative Commons The Bahrain World Trade Center From building new cities to upskilling nationals for digital transformation, Ali Murtaza, executive director, business development for tourism and real estate on the Bahrain Economic Development Board, answers a Q&A with AGBI on the state’s all-encompassing recovery strategy. Bahrain’s economic recovery plan was revised during the coronavirus pandemic. What are the details? The economic recovery plan is based on different priorities. Primarily, we’re looking at a huge investment into different types of infrastructure and development projects in Bahrain worth $30 billion. These are strategic projects across five new cities – Fasht Al Jarim, Suhaila Island, Fasht Al Adham, Bahrain Bay and Hawar Islands – and across healthcare, education, housing, youth and sports, and so forth. They’re currently being developed and turned into investment opportunities that the private sector should be part of, and we’re encouraging that as a strategy. Bahrain’s non-oil economy has more wind in its sailsManama goes all out to woo international holidaymakersDoubling oil output may prove a challenge too farCrown prince keen to catch up after slow start on green energy The second priority in the recovery plan is to generate jobs. We’re looking at generating 20,000 quality jobs for Bahrainis, as well as hopefully upskilling 10,000 Bahrainis annually over the next few years. The idea will not work if you don’t achieve economic stability and fiscal sustainability, and the plan is that by 2024 we’ve reached that milestone as well. We also want to continue to improve commercial set-up procedures in Bahrain while growing our non-oil GDP across five major sectors: tourism; logistics; industry; telecom, ICT and the digital economy sector; and energy. Ali Murtaza of the Bahrain Economic Development Board How are you growing these sectors? For each pillar there are a set of targets and a set of priority initiatives backing them to make sure that we achieve these. For example, in tourism, the idea is to lift the contribution from seven percent of GDP to over 11.5 percent by 2026. This includes major investments in infrastructure. We’ve already upgraded our airport with an investment of over $1 billion. We’re now looking to launch a new King Hamad causeway between Bahrain and Saudi Arabia to help increase visitors from the region. We’re also working on developing the southern area of Bahrain. There are massive developments coming there. The first one is a new Jumeirah hotel opening later this year. We have also invested in a brand new international exhibition centre, with over 100,000 square metres of leasable space. It’s going to be the biggest in the region and is also opening this year. So my sector will be a huge focus for the country for this year. There is also the Bilaj Al-Jazayer, a three-kilometre beachfront development. Our tourism strategy is to reach 14 million visitors by 2026, and we want to increase visitor spend from $200 a day to about $275-300. How do we do that? By improving our infrastructure, improving our offerings across different platforms, and then focusing a lot more on showcasing our history and heritage. Bahrain has over 5,000 years of history. We’re also launching our new metro line, so that’s now in the works as well. Artist’s Impression of the proposed King Hamad Causeway joining Bahrain with Saudi Arabia What are some of the key initiatives in other sectors? In the logistics sector we have created one of the most efficient global sea-to-air hubs in Bahrain, where you save about 40 percent on air freight and 50 percent in time when moving from sea to air, around a two-hour turnaround. We’re aiming for the logistics sector to be ranked in the top 20 globally by 2030. In terms of the industrial sector strategy, the idea is also to increase its GDP contribution. Here we are focusing on our Bahrain Petrochemicals and Bahrain Aluminium production. We modernised and expanded both facilities. We’ve also done a US Trade Zone specifically as a treaty with the US; hopefully, light industrial downstream players will look to Bahrain to expand their global networks. There is a strategy for financial services too. It’s a huge sector that we plan to maintain as 20 percent of our GDP. We also want to modernise it and attract more financial and fintech companies. We’re looking at improving our currency circulation, improving our electronic fund transfers and we’re also looking at over 3,000 training opportunities for Bahrainis and residents to come into the financial sector. The last one is the telecoms, ICT and digital economy sector. Bahrain attracted Amazon Web Services to set up the first data centre in the region, and we’re continuing to attract more. We created the first data embassy law to underpin this. Riyadh issued a directive saying that companies wishing to do business in Saudi Arabia must base their headquarters in the country. How will this affect Bahrain? We’re working very closely in terms of partnerships with our friends in the region. It has strategic conversations at all levels about migrating, sure, but we have decided, collectively as a region, that we’re going to collaborate. We’re trying to find the best way to position every one of our cities and nations in the region to be global players. Bahrain is no different. Part of our strength comes from our people. We are over 99 percent in terms of literacy rate and our education levels are high for both sexes. We have a very strong local talent that helps support international company expansion. Some companies have a headquarters in Saudi but also find that an operation in Bahrain helps them expand eastwards or westwards. We see more companies and more business coming into the region as good for all of us. The new Jumeriah Royal Saray hotel What kind of skills are most in demand? There’s been a lot of shifts in the technology sector, especially after Covid. Historically, we’ve been a hub for banking and manufacturing. We have a labour fund called Tamkeen that helps upskill all the Bahrainis a company hires, so not only do we subsidise their salaries, we also subsidise all the upskilling. The focus has been signing up with the likes of Google and Apple academies and other developer programmes to help upskill in tech, and that’s where we want to focus. What regulatory changes have made doing business in Bahrain easier? We have a brand new real estate regulatory authority. We’ve regulated the ownership of different types of investments in real estate, and we’ve also recently launched a golden visa scheme. A lot of countries have visa on arrival now as well. There’s been a huge change in our cabinet itself. We have brand new ministers now, including our minister of tourism. There are more such changes to come soon as well.