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Wed 9 Sep 2009 04:00 AM

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The bridge to Bahrain

With billions of dollars being spent to develop its warehousing and transportation infrastructure, Bahrain has emerged as a popular hotspot for the global logistics industry.

The bridge to Bahrain
Billions of dollars have been invested to develop Bahrain’s infrastructure, including Bahrain Gateway.

With billions of dollars being spent to develop its warehousing and transportation infrastructure, Bahrain has emerged as a popular hotspot for the global logistics industry.

Bahrain has experienced a number of economic booms during its vast history. In particular, the shallow waters that surround the island once contained a generous supply of pearls, which resulted in years of lucrative trade with countries around the world.

Unfortunately, the ‘peal or the Gulf’ – as Bahrain was nicknamed – suffered from a global collapse in the market and found solace in another high-value commodity, becoming the first country to discover oil reserves in the western side of the Gulf.

Although the quantity was limited in comparison to neighbouring countries such as Saudi Arabia and Kuwait, enough income was generated to fund the development of other industries in Bahrain, such as banking and finance, travel and tourism, education and training, and most recently, warehousing and transportation. The ambitious nature of this diversification programme can be attributed to King Hamad bin Isa Al Khalifa, who outlined the importance of a varied economy with his National Economic Vision 2030 plan, which launched with much fanfare in October 2008.

“His Majesty’s Economic Vision 2030 outlines the future path for our economic development,” explains Kamal Ahmed, chief operating officer at Bahrain Economic Development Board (EDB). “It has been shared with a host of opinion leaders from the private and public sectors, whose input has added to the quality and significance of this document.”

A number of business incentives have been marketed by the EDB during its campaign to establish Bahrain as a warehousing and transportation hub. For example, companies can benefit from 100% foreign ownership, while Ahmed also claims the Kingdom has shorter travel times between its logistics zone, airport and seaport compared to other Middle Eastern countries, allowing the trading community to handle their goods in a faster, more efficient manner.

The importance of such benefits has never been more apparent, with Free Trade Agreements (FTAs) being signed between Bahrain and the United States, Singapore, Iceland, Norway and Switzerland in recent years. Negotiations are also taking place with India, China, Japan, Australia and the European Union, which explains the growing need to develop infrastructure for supply chain operations.

“Bahrain has invested billions of dollars to develop the best transport links in the region, incorporating road, sea and air,” states Ahmed, without making a specific reference to the UAE and Saudi Arabia, which also have multi-modal transportation projects that amount to billions of dollars.

“Our strategic location can provide companies with road access to the booming economies in the Gulf, supported by the 25km causeway to Saudi Arabia and the forthcoming Friendship Causeway to Qatar, which is scheduled for completion in 2013. In addition, we have new developments such as Bahrain Logistics Zone and Khalifa Bin Salman Port, while the existing capacity at Bahrain International Airport will soon be trebled to 1 million tonnes per annum with our new Cargo Oasis, making it comparable to London’s Heathrow Airport.”

With a string of developments in full swing, the government is also encouraging Bahraini nationals to consider a long-term career in logistics and supply chain management. Over $114 million has been invested by Tamkeen, Bahrain’s labour fund, to provide over 19,000 nationals with relevant training. This will be supported by local education institutes, such as Bahrain Polytechnic, which has launched a higher diploma in transport, freight and logistics.

However, with the global recession having an impact on all corners of the world, will the forthcoming generation of logisticians have suitable opportunities in their home country? At face value, the indicators are undoubtedly positive, with industry leaders such as

, Danzas and CEVA Logistics all biting the bait and expanding their presence in the Kingdom. In addition, DHL has established a central base in Bahrain to cover its entire Middle East operations.

“Logistics operations are very complex in today’s market and effective supply chain management is a way for companies to differentiate themselves and gain a competitive advantage. I believe the infrastructure in Bahrain will enable companies to compete more effectively in the regional and global market,” concludes Ahmed.

“The global financial credit crunch hasn’t had a negative impact on our plans, because the Kingdom started investing heavily in infrastructure during the oil boom and our approach has always been one of stable growth in line with demand.”

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