We’ve had to be tough for so long, we’ve become unnecessarily guarded. It’s time to drop the defensive stance, release old constructs, and allow investors in.
Something we never thought we would see in this part of the world has recently begun happening on a regular basis. The oil-rich countries of the Gulf—mainly Saudi Arabia and the UAE—have been making the headlines by announcing their intention to explicitly move away from oil dependency and diversify their income generation to sectors like tourism, financial services, etc.
On a related note, the Bahraini citizen, the Rocky Balboa of the Gulf, has been bombarded with battering headlines recently that include the fuel-price hike, the meat subsidization controls, and the impending electricity and water adjustments. The immediate reactions of Bahrainis are ones of pessimism and foreboding of a very dark future. Naturally, one would think that investors would never think of Bahrain when it comes to investments.
NOW MORE THAN EVER, LAWS AND LEGISLATION SHOULD BE PASSED TO HELP INVESTORS DECIDE ON BAHRAIN RATHER THAN MORE CONVENTIONAL CHOICES, SUCH AS THE UAE.
But they are. At least for now. And it is up to the government to make sure they stay interested in our Kingdom. Now more than ever, laws and legislation should be passed to help investors decide on Bahrain rather than more conventional choices, such as the UAE.
Laws and regulations to make an investor’s life easier should be passed just as quickly as the fuel-increase bill. People, both local and foreign, should see this proactivity for themselves, and note that tight controls are the only way to save the economy from the current mire in which it finds itself.
Making it easy for investors to conduct business is nothing new, and has been proven time and time again with (surprise!) the UAE leading the way. The UAE’s bet on foreign investment decades ago resulted in a big drop in dependency on oil, with the non-oil sector now providing two-thirds of the country’s GDP. Plans by Sheikh Mohammed bin Rashid, the country’s Prime Minister, are in the works to further lower dependency to a paltry 5% by 2021.
BAHRAIN HAS ALWAYS BEEN “BUSINESS FRIENDLY.” NOW IT NEEDS TO BE FRIENDLIER.
Bahrain’s strategy, however, should be a little different. The Kingdom’s reserves are nowhere near as big as the UAE’s, so in order to generate income to sustain its people’s lifestyles, it needs tighter controls on government spending. More importantly, it needs to open up even further to foreign investors. The government should concentrate most of its efforts on the logistics of the Kingdom—including, but not limited to, roads and telecommunication. A solution to the decades-old Saudi Causeway traffic jam could be a start.
Another example would be the current financing options available to foreign investors. As an ex-banker, I have seen how potential deals are missed by banks because it is not as easy for other nationalities to get financing from a Bahraini bank to buy property in the Kingdom. These are opportunities just waiting to be snatched up, but unfortunately, everyone loses when the paperwork makes the financing procedure an exercise in futility. Bahrain-based banks would be wise to capitalize on this by offering easy, hassle-free financing options to these investors.
Bahrain has always been “business friendly.” Now it needs to be friendlier.
