BrazilResearch consulting firm OBG releases annual economic report on Bahrain
The global research and consulting firm Oxford Business Group has released its latest economic country report on Bahrain, noting 2017 as a record year for inward investment. The publication release follows recent news that Bahrain has been removed from the EU’s tax-haven blacklist, which curtails certain financial activities by EU institutions with the countries listed.
The Bahrain 2018 report by Oxford Business Group (OBG), one of 40 such comprehensive study reports the research and consulting firm releases annually on some of the fastest growing economies across the globe, including each of the GCC member-states, takes an in-depth look at trends and developments across Bahrain’s economic spectrum, with analysis and insight on the banking, capital markets, tourism, energy, ICT and construction sectors among the many examined.
The report charts the country’s focus on targeted growth areas, as Bahrain, in line with the sweeping national economic transformations underway in the GCC, seeks to diversify away from a reliance on resources. Such areas include Bahrain’s push to develop itself as a centre for digital technology – given a boon last year with Amazon Web Services announcing its plans to establish a cloud computing and data base in the Kingdom by 2019 – along with other fiscal reforms and infrastructure measures designed to attract greater investment, with $81.9 billion worth of projects in pipeline at the mid-point of last year.
The research firm expects such upgrades to infrastructure to play a key role in driving growth and help to meet the increasing demand. More broadly, Oliver Cornock, OBG’s managing editor for the Middle East, said, “Bahrain’s expanding telecoms and tourism industries, together with its well-established financial services sector and dynamic manufacturing base, serve as a reminder that the kingdom has already made significant headway in diversifying its economy, even though lower global oil prices have brought challenges.”
One longer-term effort to diversify has been in the development of the country’s financial services sector, which the report says that as one of the leading centres in the region was a major component of the country’s non-oil economy last year, contributing over 17% to the GPD – with an earlier annual country review by OBG noting that “continued fiscal consolidation and reform, combined with steady growth, were the hallmarks of Bahrain’s year.”
Black-listing
The local financial sector however was under pressure at the end of the year by way of the country’s European Union black-listing alongside the UAE for non-cooperation on transnational tax avoidance initiatives, with EU legislative measures set to block non-aid-development investment in blacklisted nations and bring greater scrutiny to financial transactions.
Both nations vowed to address concerns at the time, with the Bahraini government saying that it would initiate dialogue with the EU on the matter “to ensure understanding and recognition of the Kingdom’s efforts to ensure financial transparency, international cooperation and a robust regulatory environment.” After securing specific commitments from officials in Manama, the EU last week announced that Bahrain would be removed from the list, following the UAE's removal at the start of the year.
The OBG 2018 Bahrain report was produced in collaboration with local financial consulting firm KSI Financial Consultants and Public Accountants, with the firm’s head of its Board of Management Ahmed Alsulaiman contributing his views to the report on the implementation of VAT in the GCC, along with other contributors including King Hamad bin Isa Al Khalifa and the CEOs of Bahrain Bourse and sovereign wealth fund Mumtalakat.
