Bahrain Ecomonic Developent Board's CEO, Kamal Ahmed, on why investors should choose Bahrain.
With limited oil reserves and a population of just over one million people, the Kingdom of Bahrain faces a tough task in trying to attract international investors. But low inflation, an open society and the absence of restrictions on foreign ownership makes the island a perfect base from which to tap the region's wealth, the Bahraini government argues in an international marketing drive.
Bahrainsits between Saudi Arabia and Qatar, but lacks the size of the former and the wealth of the latter. How are you going to convince international companies to choose Bahrain?
Bahrain is a business-friendly society. You can set up your business easily and have it 100 percent owned by yourself. You don't need an agency and you don't need to be in an isolated zone.
The GDP growth of Bahrain has been between six and seven percent over the last six to eight years. We don’t want double digit growth.
All of Bahrain is a free zone. It's a low tax environment, the most cost-effective location in the GCC - especially with the inflation in the other countries.
It is also a cosmopolitan, open and tolerant country. People from all cultures can live their lifestyle in Bahrain.
Is Bahrainisation part of your remit?
Bahrain is the only country in the GCC to address the labour reform issue. Forcing the private sector to employ people will not encourage them to come to Bahrain and will force them to recruit people for the sake of recruiting them, without developing their skills.
We are putting the work permit fees for expat workers in a labour fund, established to train Bahrainis. We are telling international investors: "Come to Bahrain, don't recruit Bahrainis. But we can help you recruit and train Bahrainis, and we will finance the training."
We have received a lot of delegations from other GCC countries and they all want to see how this is going to work. But we are glad that we have taken this step.
Does Bahrain have more local people in the workforce than its neighbouring countries?
Yes. Maybe because we are an island and we started everything before the other countries. The first education system started in Bahrain in 1919, the first female education started in 1929. Bahrain was the first Gulf country where they discovered oil and development started here first.
We used to send teachers to the other Gulf countries to teach in their schools. We started diversifying our economy in the 1960s.
Does Bahrain plan to carve out a niche for itself by attracting a particular type of company?
We know that we have limited land and that we have to utilise it effectively. We also know that we have limited oil and gas and we have to make sure that we attract intelligent foreign direct investment, companies that will create medium and high skilled jobs.
You are using low inflation as a selling point to attract investors, but what's to say inflation won't rise if enough companies listen to your advice and come to Bahrain?
Inflation depends on the growth, and in Bahrain we want to have sustainable, stable growth.
The GDP growth of Bahrain has been between six and seven percent over the last six to eight years. We don't want double digit growth.
Government expenditure is one of the main reasons for inflation going up and down, and the government is even delaying some projects because we want to control the growth.