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8 13 17 18 21 23 27 35 36 37 39 40 42 In the face of the challenges posed by declining oil prices and regional unrest, Bahrain has remained committed to its programme of economic diversification. While GDP growth is forecast at 3.3% in 2016, the fiscal gap is not expected to close significantly. However, the advancement of SMEs, as well as significant growth in the manufacturing sector, bode well for the kingdom’s long-term economic future. Bahrain in figures The country of two seas: A stable player in the region raises its profile internationally Steadying the ship: With growth moderate, the government boosts public spending Preparing for the future: Declining production in the Gulf has GCC nations looking elsewhere to assure food security Managing growth: A youthful population has the potential to boost Gulf economies Interview: Li Yong, Director-General, UN Industrial Development Organisation Broad appeal: The kingdom is taking a holistic approach to economic development, and diversification is a key goal Interview: Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board Interview: Shaikh Mohammed bin Essa Al Khalifa, Chairman, Tamkeen Exploring options: The government faces a tricky task over subsidy cuts Interview: Mahmood Al Kooheji, CEO, Mumtalakat Solid investment: The sovereign wealth fund is eyeing further expansion Small and medium at large: The government’s support for SMEs demonstrates recognition of their importance 47 54 55 57 58 62 66 67 69 70 71 72 73 74 77 82 83 85 86 Thanks to a prudent yet flexible regulatory system, Bahrain’s lenders have been able to extend from a small domestic base to become substantial regional and global players. The sector’s strong aggregate balance sheet and sizeable pool of skilled financial workers means that it is well placed to continue to take advantage of numerous domestic and global lending opportunities. Leading by example: Strong financials give this regional leader global sway Viewpoint: Rasheed Al Maraj, Governor, Central Bank of Bahrain Pushing plastic: New offers are increasing the popularity of credit cards Interview: Ahmed Dayyat, Country Head, Mashreq Bank Bahrain Head of the back office: A well-trained workforce is key to regional financial leadership Altitude adjustments: A range of new developments are helping expand the sector Viewpoint: Najla M Al Shirawi, CEO, Securities & Investment Company Bearing standards: How the country’s institutions are gaining influence Public outreach: A multi-faceted approach to spreading awareness of the bourse’s offerings A two-pronged bid: Moves to expand stock market appeal Market Analysis: Market analysis & data 89 93 95 98 103 104 107 111 117 119 121 In 2014 hydrocarbons accounted for 24.1% of Bahrain’s total GDP. However, in the wake of falling oil prices, the kingdom has had to reduce its forecasts for the contribution of oil and gas in its budget projections for FY 2015-16. While the energy sector remains key to the economy, Bahrain is also taking steps to diversify its economic base. Lead position: By capitalising on its expertise in the sector, Bahrain is consolidating its reputation as a key regional insurance player All together now: The major insurance centres of the Gulf are exploring regulatory harmonisation Playing to its strengths: The growth of reinsurance activity in Bahrain is supported by a robust regulatory system A diverse base: The development of innovative methods for oil recovery boosts production and eases constraints Interview: Abdul Hussain bin Ali Mirza, Minister of Energy Powering up: Rising demand fuels a range of investments in electricity and other public infrastructure Bright prospects: A range of initiatives expand the use of greener energy sources Over land and sea: A new causeway is just part of bold expansion plans Interview: Maher Salman Al Musallam, CEO, Gulf Air Going places: The transport network is set for further expansion Local heroes: GCC funding is enabling the kingdom to push ahead with a raft of infrastructure projects 124 129 130 131 133 138 139 142 146 147 150 155 163 165 166 A stable outlook: A varied range of projects is in progress as the sector reaps the benefits of GCC investment Interview: Faisal Faqeeh, Chairman, Bin Faqeeh Real Estate Investment Company Moving on: A judicial committee will review developments that have ground to a halt Working together: Public-private partnerships are helping to address a nationwide shortage of social housing Signs of progress: The sector is recovering, with retail and hospitality gaining visitors, and housing benefitting from GCC funds Interview: Mohammed Khalil Alsayed, CEO, Ithmaar Development Company Rights and responsibilities: A new tenancy law will bring increased clarity for landlords and tenants Keeping busy: The kingdom is investing in capacity expansion as the non-oil sector drives growth Interview: Tim Murray, CEO, Aluminium Bahrain (Alba) Timing investment: Adding a sixth production line in preparation for a recovery in aluminium prices Sweet tooth: Confectioners are investing locally to feed growing populations across the region Far and wide: The extension and upgrading of facilities is attracting a growing number of visitors Come one, come all: The kingdom hosts a wide range of experiences to attract visitors from near and far Time to shine: Manama’s status as 2016 tourism capital set to boost the sector Destination management: Public-private collaboration is helping to enhance the sector 168 172 173 174 176 180 182 186 187 189 195 200 202 204 207 208 Bridging the gap: Public investment aims to improve state schools and boost national attainment levels A two-pronged approach: Boosting national employment by focusing on localisation and training programmes Learning network: Using technology to help push the boundaries of education Quality boost: High educational standards mean the country continues to draw international students Keeping pace: Changes are afoot as the sector adapts to new conditions Nurses needed: Training students to enter the medical profession with an eye to raising Bahrainisation rates Diversifying trends: New entrants and sector reforms increase competition Interview: Muna Al Hashemi, CEO, Batelco Network restructuring: The government is seeking a regulatory structure that will maximise broadband coverage Extending the reach: Leveraging an open regulatory environment for continued regional competitiveness in ICT Rule of law: An overview of recent amendments to the Commercial Companies Law Business boom: Real estate development Viewpoint: Hatim Q Zu’bi, Partner, Zu’bi & Partners, Attorneys & Legal Consultants Sleep easy: Hotels and their services Listings: Important numbers Facts for visitors: Useful tips for new arrivals Year-on-year growth for the sector approached 7.5% in 2014 and 2015, with no signs of slowing. A second oil pipeline to Saudi Arabia, as well as airport and road enhancements, will continue to drive growth in 2016. The total contribution to GDP at constant prices for 2014 was $2bn, and construction constituted 6.7% of Bahrain’s GDP in 2014. Tourism is an increasingly important component of the kingdom’s economy, accounting for 10.3% of GDP in 2014. With upgraded infrastructure and a greatly raised international profile, the country’s ecotourism offerings, undiscovered islands and UNESCO Heritage sites are beginning to draw increasing numbers of visitors from the Gulf region and beyond. As Bahrain marks the 30th anniversary of the opening of the King Fahd Causeway, its transport sector is gearing up for an even greater set of expansions. Among the central projects are upgrades to its airport and expanding its internal road networks. Bahrain is also building a second causeway to ease congestion and connect to the planned GCC rail network.

Bahrain is home to one of the most liberalised telecoms markets in the region, and is keen for the sector to facilitate broader economic growth.

As regulators determine how best to stimulate competition and investments, major changes are under way, such as the rolling out of 4G services.