Bahrain is tapping the UK, China and India for more foreign direct investment in 2019, with three deals expected to be signed in the coming months, as the kingdom looks to non-oil sectors to drive economic growth.
The government’s investment agency, Bahrain Economic Development Board, is in talks with two Chinese technology companies to set up in the kingdom, which would be their first locations in the Middle East. Both deals would represent investments of “tens of millions of [US] dollars”, said the agency’s chief executive Khalid Al Rumaihi. The deals are expected to conclude this year.
The EDB is also in talks with an Indian company that wants to set up operations in Bahrain. The agency, which already has promotional offices in Delhi and Mumbai – among other global offices – wants to establish an office in a third Indian city in the year ahead.
Chinese technology giant Huawei, as well as retailer Chinamex that owns Dragon Mall, State Bank of India, ICICI, Ajmera and Mayfair Global Realty, are examples of Chinese and Indian companies already operating in Bahrain.
Bahrain’s GCC neighbours, especially the UAE and Saudi Arabia, are another “wonderful source of FDI”, the chief executive said, as is the UK, which is nearing its deadline for exit from the European Union.
Two laws are set to be introduced that would support an increase in FDI, including a data jurisdiction law enabling companies that store digital data in Bahrain to have their data and any related disputes governed by their own country’s legal framework. Amazon Web Services in 2017 announced a deal to open a massive data centre in Bahrain, and the project is expected to commence later this year, according to Mr Al Rumaihi. The other law seeks to create a register of movable assets, to support bank lending to small and medium-sized enterprises in Bahrain.
In the first nine months of 2018, Bahrain EDB reported record FDI inflows to Bahrain for the second year running, increasing by 138 per cent year-on-year to $810 million.
Bahrain’s real gross domestic growth reached 3.8% in 2017 but is forecast to have slowed to around 2 per cent in 2018 on the back of challenging economic conditions for the region and maintenance work on a major Bahraini oilfield which halved production in the first half of the year. This caused GDP growth to lag to 1.1% in the third quarter, Mr Al Rumaihi said. The latest figures are due to be released in the coming weeks.
The chief executive forecasts “marginal” gross domestic product growth of 2 to 2.5% this year, driven by the manufacturing and construction industries. State-backed aluminium company Alba’s Line 6 expansion project will come online this year, making Alba the world’s largest aluminium smelter.
Source: The National