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The Report: Bahrain 2013 - Product Image

The Report: Bahrain 2013

  • Published: June 2013
  • Region: Bahrain
  • 216 Pages
  • Oxford Business Group

FEATURED COMPANIES

  • Alba
  • Bahrain Bourse
  • BAPCO
  • Batelco Group
  • Ithmaar Bank
  • JP Morgan
  • MORE

Bahrain has remained largely insulated from international external risks and has weathered the global economic shocks of the recent past relatively well. At the height of the international financial downturn, for example, the kingdom avoided falling into recession and even achieved real GDP growth of more than 6% in 2008 and over 3% in 2009. The economy has also weathered regional challenges - including political unrest - well, and several ratings agencies have indicated confidence in the country's economic outlook.

Economic Vision 2030, Bahrain's long-term development strategy, outlines plans to build upon the kingdom's successes through further diversification of the economy. The main objectives of the strategy include establishing a more competitive and sustainable economy that supplies nationals with improved employment options. The plan also takes into account the need to integrate environmental considerations into development and infrastructure projects in line with the 2006 National Environmental Strategy. Looking forward, the kingdom will need to address several challenges such as government debt, youth unemployment and increased competition in the finance sector from READ MORE >

I. SNAPSHOT
Bahrain in figures

II. COUNTRY PROFILE
Island of empires: The kingdom has been a global trade centre for centuries
One from many: The GCC has become a catalyst for collaboration and mutually beneficial development
Interview: Hala Mohammed Al Ansari, Secretary-General, Supreme Council for Women
Viewpoint: David Cameron, UK Prime Minister
Trading up: Both internal and external
GCC trade have increased considerably

III. ECONOMY
An environment for growth: Maintaining high rankings and a positive outlook in spite of global financial troubles
Interview: Mahmood Hashim Al Kooheji, CEO, Mumtalakat
Emphasis on employment: Development of labour-intensive industries is a priority
Interview: Shaikh Mohammed bin Essa Al Khalifa, Chairman, Tamkeen
Interview: Sheikh Khalid bin Abdullah Al Khalifa, Chairman, Mumtalakat
Building up: Rapid population growth highlight the need for infrastructure development
A model for success: New focus on policies for SME development

IV. BANKING
Steady wins the race: New strategies are being considered for conventional and Islamic banks
Interview: Ali Moosa, Senior Country Officer fBahrain, JP Morgan
Licensed to bank: Mergers between retail and wholesale operations are expected as the market responds to changing conditions
Offering support: Priority is being given to small businesses

V. CAPITAL MARKETS
Opportunity-risk ratio: Steadily developing the exchange for long-term returns
Interview: Fouad Rashid, Director, Bahrain Bourse
Developing a niche: A new bourse has the potential to boost liquidity

VI. ISLAMIC FINANCIAL SERVICES
Spring forward: Consolidation and greater overall capacity will boost performance
Come together: Recent mergers have set a good example for the future
Interview: Mohammed A Rahman Bucheerei, CEO, Ithmaar Bank
Interview: Aabed Al Zeera, CEO, International Investment Bank
Bright future: The market for Islamic bonds is promising

VII. INSURANCE
Healthy prospects: The proposed implementation of compulsory medical insurance promises to boost revenues
Interview: Zakareya Sultan Al Abbasi, CEO, Social Insurance Organisation

VIII. ENERGY
Innovative techniques: Rising demand necessitates a search for other sources
Interview: Adel Khalil Al Moayyed, Chairman,
Interview: Abdul Hussain bin Ali Mirza, Minister of State for Electricity and Water Affairs
Outside the box: Solar and wind energy stand out as alternative sources of power
Lifting liquid gold: A wider variety of extraction techniques are being examined
On the grid: Fibre optics and an expanded transmission system are in the works

IX. TRANSPORT
Strong linkages: Plans to improve infrastructure and expand the main airport
Interview: Kamal bin Ahmed Mohammed, Minister of Transportation
Port to port: Changing global trade patterns add importance to maritime shipping
Moving the masses: Public transport set to grow with added focus on infrastructure

X. REAL ESTATE & CONSTRUCTION
Toward stability: Taking advantage of the slowdown to focus on affordable housing
Interview: Essam bin Abdulla Khalaf, Minister of Works
Residential property: The housing market is beginning to stabilise
Build up: The recovery of the economy is mobilising the sector
Interview: Mohammed Khalil Alsayed, CEO, Ithmaar Development Company
Interview: Christopher Sims, CEO, Naseej Funds for the future: Regional resources are being aimed at social needs

XI. INDUSTRY
Looking to the future: Maintaining its edge and opening up to new opportunities
Full of possibilities: Downstream industries
Interview: Chris Potter, CEO, Arab Shipbuilding & Repair Yard
Interview: Tim Murray, CEO, Alba
Keeping options open: The government is keen on increasing foreign investment
True as steel: Continued investment and expansion will generate further growth

XII. TOURISM
Consolidating recovery: A unique heritage and growing MICE segment boost diversification
All aboard: Efforts to energise the sector through cruise ship tourism gain traction
Widening its appeal: Better accommodation and more business visitors aid the hotel trade

XIII. EDUCATION
Training for diversity: An international-standard system excels in educating women
Interview: Garry Muriwai, Director, Bahrain Institute of Banking and Finance
Invested in innovation: An array of projects target research and development
Job ready: Domestic institutions are taking steps to meet changing labour needs

XIV. HEALTH
Slow and steady: Health care continues to be a priority for the government
Expanded treatment: Plans to diversify the range of facilities are moving forward

XV. TELECOMS & IT
Future oriented: Operators to offer next-generation mobile broadband services
Roundtable: Sheikh Hamad bin Abdulla Al Khalifa, Chairman, Batelco Group; Ulaiyan Al Wetaid, CEO, VIVA Bahrain; Mohammed Zainalabedin, General Manager, Zain Bahrain
Need for speed: Mobile broadband infrastructure coming on-line
Innovative solutions: Efforts to upgrade infrastructure and promote e-services
Getting up to speed: Increasing internet penetration through a broadband network

XVI. LEGAL FRAMEWORK
Zu'bi & Partners
New oversight: Regulations covering the marketing of unauthorised financial services
Mixed views: A look at the new labour law
Swift resolution: A new centre offers a forum for mediation and arbitration
Viewpoint: Qays H Zu'bi, Senior Partner, Zu'bi & Partners

XVII. THE GUIDE
Hotels: A rundown of the island's offerings
Listings: Ministries, embassies and services
Facts for visitors: Information for travellers

POLITICS: Following a wave of protests throughout the Arab world in 2011, civil unrest reached its height in Bahrain during February and March of the same year. The basis of the demonstrations, led predominantly by Shiite Muslim citizens, related to grievances surrounding the country's democratisation process. By mid-March 2011, the kingdom received GCC security assistance in order to uphold political stability, and although some protests continued through 2012, the country's businesses have carried on and growth levels remain positive. As a result of the initial unrest and a national dialogue with the aggrieved parties, the King authorised the Bahrain Independent Commission of Inquiry (BICI) on June 29, 2011 to investigate the crisis and develop recommendations moving forward. The final report highlighted various instances of police brutality and demonstrator violence during the unrest, and it also provided recommendations for political reform looking forward. As of early 2013, the government continues to receive pressure from the opposition and the international community regarding the implementation of the BICI report recommendations.

ECONOMIC OVERVIEW: Bahrain pioneered the Middle East's oil production in 1932, thus establishing the region's initial framework for the petroleum industry. The new resource enabled Bahrain to modernise its economy by moving beyond traditional industries such as pearl diving and fishing. Aware of the commodity's finite nature, the kingdom sought to diversify its economy at an early stage and consequently established itself as a leading regional financial centre with a highly regarded regulatory system. At present, Bahrain's Economic Vision 2030 aims to enhance private sector growth while the government invests in infrastructure projects, affordable housing and human resources. Furthermore, the kingdom maintains a highly developed industrial sector and hosts one of the world's largest aluminium smelters, Aluminium Bahrain (Alba). According to the World Bank's 2013 “Doing Business” report, the country ranks 42nd in the world for the ease of conducting business, and the World Economic Forum's 2012-13 “Global Competitiveness Report” ranks it 35th. Bahrain's Economic Development Board (EDB) recorded 2012 GDP at $30.28bn.

ENERGY: The energy sector is central to Bahrain's economy, accounting for over 70% of total government revenue and about 13% of GDP. Upstream recovery technology has enabled Bahrain to increase its oil production rate to over 45,000 barrels per day (bpd), up from 32,000 in 2010, and the government's target is to reach 100,000 bpd by 2017. Presently, the country refines a total of 265,000 bpd, with the majority of crude coming in from the Abu Safa field, which it shares with Saudi Arabia. Gas production is also expected to increase from 1.5bn cu feet per day to 2.5bn cu feet in the same timeframe, as the kingdom recently awarded a tender for deep gas exploration alongside enhanced onshore drilling efforts.

TRANSPORT: The island's geographic location is a key strategic asset enabling it to serve the Northern Gulf as a transportation hub. The new Khalifa Bin Salman Port has enhanced the country's role as a primary supplier of goods to Saudi Arabia, the region's largest market, which is already linked to Bahrain via the King Fahd Causeway. Additionally, the Bahrain International Airport is in the midst of undergoing an extensive expansion, which is expected to further improve the country's status as a centre for global trans-shipment and logistics. TOURISM: Due to its vibrant history and rich culture, Bahrain attracts a large number of tourists, particularly from other GCC states. In 2012, the Arab League named Manama the Capital of Arab Culture, and the kingdom hosted a wide array of events relating to Arabic art, music, architecture and literature. Manama is also designated as the Capital of Arab Tourism for 2013, further boosting the industry after a decline in tourism numbers due to the 2011 political unrest. The Formula 1 Grand Prix, cancelled during the 2011 crisis, was revived in 2012 and remains a key driver of annual tourism revenue. Bahrain is also investing in infrastructure to support the meetings, incentives, conferences and exhibitions segment, and is currently developing the new Expo City project, which is planned for commissioning in 2013.

CLIMATE: Bahrain's climate consists of two seasons, a hot and humid summer and a mild winter. April through October generally mark the summer months when the average temperature hovers around 40°C, with highs up to 48°C. During the winter months, generally November through March, the temperature ranges between 10°C and 20°C. The country's annual rainfall averages approximately 77 mm. GEOGRAPHY: Due to land reclamation projects, the country has increased its overall landmass to more than 765 sq km, up from its original size of 665 sq km. The total archipelago consists of 33 islands and rests off the eastern shores of the Arabian Peninsula. The four predominant islands include Bahrain Island (accounting for 83% of the total landmass), Al Muharraq Island, Sitra Island and Umm An Nasan Island, which are all interconnected by causeways.

NATURAL RESOURCES: The country's primary natural resources include oil, gas, fish and pearls. The desert climate restricts extensive agricultural production. The traditional industries of fishing and pearl diving have diminished substantially since Bahrain began oil production, yet they remain culturally significant. Although the kingdom was the first GCC state to discover oil, it has smaller petroleum reserves than its neighbours. However, enhanced oil recovery technology has improved access to reserves. Water is another finite local resource, and the island's primary aquifer, Damman, is becoming salinised due to overuse. Bahrain depends on desalinisation for approximately 90% of its potable water. POPULATION: The island hosts a diverse, multicultural population that, according to the 2010 Central Informatics Organisation census, totals approximately 1.23m people, 568,400 of which are Bahraini nationals and 666,200 expatriates. The percentage of foreign nationals in Bahrain has increased from 38% of its total population in 2001 to 54% in 2010. Roughly 51% are either Bahraini nationals or citizens of the GCC or other Arab states; 45.5% are from Asia or Oceania; 1.6% are from Africa; and 1.3% from Europe and the Americas. Due to the large size of the expatriate workforce, males account for approximately 62% of the population. Almost 90% of people live in urban areas. The largest single group – numbering about 329,510 individuals – resides in the Capital Governorate, home to the capital city.

EDUCATION: Bahrain was the first Gulf state to initiate public school education for boys in 1919 and schools for girls in 1928. Ever since, Bahrain has invested heavily in education, and the government currently expends approximately 11-12% of its budget on education development. The 2012-13 World Economic Forum “Global Competitiveness Report” ranks Bahrain 31st in primary education enrolment and 21st in secondary education enrolment, noting the overall high quality of the system. Bahrain's literacy rate is one of the highest in Arab world at 91.4%. In line with Bahrain's Economic Vision 2030, the government launched the National Education Reform Initiatives in 2005 to improve all levels of the system from curriculum development to vocational and teacher training. In 2012, the first class graduated from the new Bahrain Polytechnic, and new schemes such as the School Improvement Programme (SIP) are coming online in order to further enhance school adequacy and increase accreditation standards. HEALTH CARE: As has been the case in some other sectors, Bahrain has historically led the GCC in health care innovation. The American Mission Hospital (AMH), established in 1902, is the region's oldest. Bahrain created its Ministry of Health in 1973 and modelled its policies on the operations of AMH, and the government subsidises health care costs for all citizens. In early 2013, there were 13 private hospitals and 11 gov- ernment hospitals, with the King Hamad University Hospital opening in 2012. The Ministry of Health is currently streamlining an e-Health initiative with the overall objective of linking hospitals across the country to a central databank. Upon completion, the programme will enable easy access to immunisation and prescription medicine records, improving efficiency.

- Alba
- Arab Shipbuilding & Repair Yard
- BAPCO
- Bahrain Bourse
- Batelco Group
- International Investment Bank
- Ithmaar Bank
- Ithmaar Development Company
- JP Morgan
- Mumtalakat
- Tamkeen
- VIVA Bahrain
- Zain Bahrain

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