Winds of change

Bahrain has long been the financial capital of the GCC. As it now begins its own construction boom, Hugo Berger looks at the challenges the country is having to address.

Bahrain's construction sector is incredibly upbeat at the moment, with the number of mega-projects on the increase.

The tiny, oil-rich Kingdom is awash with new schemes, funded both by the public and private sectors.

But, like other construction sectors in the GCC, this rapid expansion is causing a raft of problems for the country to overcome.

The country will be the first Gulf State to run out of oil and so it is rushing headlong into an economic diversification programme.

The government has launched new port contracts along with power stations and desalination plants.

Bahrain International Airport is undergoing a huge expansion, while the Bahrain World Trade Center ((BWTC) - a symbol of the nation's interest in sustainability - is nearing completion.

Half a decade ago, the country was just a series of small towns and villages, where inhabitants lived a traditional Bedouin lifestyle.

Now, new hotel complexes, roads, shopping malls, theme parks, skyscrapers and residential areas are springing up.

And the wave of development is showing no signs of abating with new schemes being announced almost on a weekly basis.

And the country's small size - 716km² - is not holding it back.

Just as in other Gulf States, reclaiming land from the sea is a common building technique.

In recent years the government has supported increased commercial activity, none more obvious than its growing financial sector.

Ever since the civil war virtually destroyed Lebanon's banking sector in the 1980s, Bahrain has taken on the mantle as the Middle East's financial hub.

With adequate communication and transport facilities, numerous multinational companies have set up in Bahrain.

At present, some 60% of the country's exports are related to oil, which accounts for 11% of its GDP.

Because oil supplies are limited, in 2006 the country signed a free-trade agreement with the US to encourage foreign investment.

The government is committed to a strategy of commercial and residential expansion, but it is being stage-managed very carefully.

Unlike nearby Dubai, which some people have suggested has a 'build anything, anywhere' mentality; the government has set out clear guidelines on development.

In December 2006 it drafted the National Planning Development Strategy, or 'National Plan'.

The plan provides strong and clear guidance on 10 key strategies that will support the future development of Bahrain. These include the built environment, infrastructure, transport and the environment.