BrazilThe consulting industry of Bahrain could be set for a growth spurt
Currently worth around $80 million per annum, the management consulting industry of Bahrain could be set for a growth spurt due to certain converging factors, belying the small Kingdom’s relative economic standing.
The little brother of the GCC states, Bahrain’s management consulting market was worth approximately $80 million last year according to Source Global data, trailing Oman as the second smallest at around $100 million, and streets behind regional powerhouse Saudi Arabia, which accounted for nearly $1.3 billion of the total $2.8 billion market in the GCC.
Bahrain’s standing as the smallest GCC management consulting market is a fair reflection of the overall wealth and economic output of each GCC nation, with the UAE the next largest nation behind Saudi Arabia in terms of both GDP and its management consulting industry – worth nearly $800 million last year – and so on down to Bahrain, which is the smallest oil producer and economy of the GCC.
According to recent forecasts from analytics and consulting firm Oxford Economics, Bahrain is also set for a drop in GDP growth this year to 2.1%, before rising to 2.8% in 2019. While positive in the longer-term, Bahrain’s growth forecast is still pegged at a lower rate than every other GCC state, including the significant 6% prediction for Kuwait in the upcoming years.
Yet, while an immediate economic boom mightn’t be on the horizon for Bahrain, several recent developments suggest its management consulting market may still be in for a boost. For starters, Saudi Arabia – set to return to double-digit growth figures for consulting this year – could potentially drag the tiny island state along in its wake, a political ally in ongoing ructions with Qatar, and one of the prominent states enforcing the ongoing embargo.
As gas-rich Qatar courts international allies, and develops closer trade ties with Oman as an embargo back-door, Saudi Arabia may bring Bahrain even closer to further reward the alliance and shelter it from other losses. A number of Bahraini officials have stated already that they view reforms in Saudi Arabia as a benefit to Bahrain rather than economic threat, and, along with recent cooperation in oil & gas and transport infrastructure projects, there may be further joint developments in areas such as tourism and entertainment.
Moreover, Bahrain’s treasury will undoubtedly benefit from recent news of the nation’s largest oil strike since it began production nearly a century ago, described as ‘dwarfing’ its existing reserves. While oil prices may remain relatively flat in the longer run, despite recent peaks, the boost to stocks will allow the Kingdom – which, according to the World Bank, has been fiscally hampered by high debt and limited savings – to more confidently pursue its forward-planning. It will also help drive inbound investment in other areas.
Such conditions are ripe fruit for the management consulting industry. The public sector accounted for nearly a third of the GCC consulting spend last year, at a growth rate of 7.3%, while the largest growth segment was in area of technology at plus 36 percent – with fintech a key playing field heading into the future. And with Bahrain being a well-established financial hub (contributing over 17% of the country’s GDP), and the financial services industry being the largest private spender on consulting globally, the tiny Kingdom’s management consulting market may be about to outgrow its little brother status.
