Bahrain's economy praised for diversity and sustainability
Manama, Bahrain 19 August 2008: Bahrain’s economy is exceptional within the Gulf region and destined for success, an independent report has revealed. The Growing Beyond Oil report, produced by the Conference Board, a not-for-profit research organisation based in the US, highlighted the rapid rise of Bahrain’s economy and demonstrated how the Kingdom had avoided many of the Gulf’s general economic pitfalls to position itself at the vanguard of economic progress in the region.
The Conference Board confirmed Bahrain’s economy to be by far the most diverse and sustainable in the GCC. Finance and manufacturing are among the largest sectors, with oil and gas production contributing less than 20 per cent of GDP growth. This contrasts with other GCC countries which are heavily dependent on fossil fuel production. Bahrain’s diversification into the high-productivity sectors of finance and manufacturing was lauded by the Conference Board, in contrast to other Gulf States’ diversification into low-productivity areas such as construction.
The uniquely sustainable nature of Bahrain’s economic growth surge was also highlighted in the report. The basis of Bahrain’s economic growth is the dramatic increases in labour productivity. While other GCC members have achieved steady rates of growth, the report showed that this had occurred largely through rapid increases in the labour force - an unsustainable source of progress. Data revealed that capital has played a relatively minor role in Bahrain’s success. This led the Conference Board to conclude that the Kingdom has “an unrealised potential for productivity growth without running into diminishing returns on capital investment.”
These productivity increases reflect Bahrain’s achievement of the highest rate of labour productivity in the GCC. Bahrain’s dominance is largely the result of two factors. The first is the deregulation of the labour market and liberal economic reforms introduced in recent years which has created ideal conditions for foreign investment in the Gulf’s strategic business hub. The second is Bahrain’s highly educated labour force and its high rate of both male and female participation. These were key areas emphasised in the report as preconditions for future economic success for the GCC economies.
Shaikh Mohammed bin Isa Al-Khalifa, Chairman of the Economic Development Board commented: “These findings show the strides Bahrain has made in economic diversification, education and labour market reform. Bahrain is proud of its record as a leading destination for business and finance and we will continue to forge a diverse, vibrant economy fully-equipped for the demands of the global economy in the 21st century.”
The roots of Bahrain’s success lie in its unique social and economic attributes within the region. Bahrain’s economy is the most free and most diverse in the Middle East, according to the 2008 Index of Economic Freedom. It has also been rated the most socially liberal country in the Gulf by the Oxford Business Group and is a young Middle Eastern democracy. Bahrain’s strategic location within the Gulf, with rapid access to Qatar and Saudi Arabia, and strong trade links with booming South Asian economies, also make it a vital centre of world trade. It is distinctions such as these that make Bahrain a primary destination for foreign business, foreign investment and expatriates.
Notes to editors:
About The Bahrain Economic Development Board (EDB)
The Bahrain Economic Development Board (EDB) is a dynamic Government agency with an overall responsibility for formulating and overseeing the economic development strategy of Bahrain, and for creating the right climate to attract direct investment into the Kingdom.
The role of the Bahrain EDB is to provide leadership by uniting all of the Kingdom's shareholders through a unified vision, and to develop key strategies for growth. The Bahrain EDB also acts as a facilitator, helping all of Bahrain's stakeholders to understand and adopt the changes necessary for progress. In addition, the Bahrain EDB provides sound project management to ensure that all agreed reform initiatives are implemented in an effective and timely manner.
The Bahrain EDB is also responsible for attracting inward investment into Bahrain, and is focusing on six target economic sectors in which the Kingdom offers significant strengths. These are financial services, downstream industries, tourism, business services, logistics and health, education and training.
EDB Mission Statement
Our mission is to grow and diversify Bahrain’s economy by developing a strategy that supports the advancement of a modern and liberalized business environment, encourages inward investment and enables us to compete in the global marketplace.
We are dedicated to raising living standards by creating greater opportunities for our citizens and to make Bahrain the Gulf’s most welcoming, business friendly location. We will accomplish these goals by working in partnership with the public and private sectors, and by being passionate, professional and innovative in all that we do.
About The Conference Board
The Conference Board creates and disseminates knowledge about management and the marketplace to help businesses strengthen their performance and better serve society. Working as a global, independent membership organization in the public interest, we conduct research, convene conferences, make forecasts, assess trends, publish information and analysis, and bring executives together to learn from one another. The Conference Board is a not-for-profit organization and holds
501 (c) (3) tax-exempt status in the United
© Bahrain Economic Development Board 2008