The Economic Development
As part of its preparation for the Millennium, Bahrain's economy is undergoing a degree of adaptation in order to improve and develop its infrastructural base, and to improve public utilities and services both for citizens and foreign investors. The state also endeavours to provide a favourable investment climate in order to attract local, regional and global investors. It utilises well prepared feasibility studies as a means of stimulating investment in Bahrain and achieving sustainable annual growth areas. In addition to this the government is making efforts to create increased job opportunities and to raise living standards in order to secure for its people a good standard of life.
To realise these ambitions and aspirations in the face of the high levels of economic competition, and coinciding with the sudden growth of information technology, Bahrain is focusing on human development and preparing its people to shoulder the challenges of the high technology age. In so doing they also seek to strengthen the value of work both for its personal benefits, but also as a means towards betterment of the nation as a whole.
The government's economic strategy aims to bolster a free and liberal economy, with equal opportunities for all people, in which a favourable atmosphere exists to enable the private sector to take initiatives in economic development.
The Bahrain Monetary Agency administers the monetary policy and supervises the financial sector, regulating the banking industry and vitalising its role and contribution to economic development while enhancing the country's position as a unique international financial centre. There are presently 182 licensed banking institutions in Bahrain; i.e. 19 commercial banks; two specialised banks; 45 foreign offshore' banking units; 32 investment banks; 41 representative offices; 26 money exchanges; 7 brokerage houses; together with 10 investment and other financial consultants offices. In addition there are 285 investment funds administered in Bahrain under the management of 35 financial institutions.
The Islamic Banking sector has also received an impetus and is being actively encouraged to grow further. At present 11 Islamic banks and financial institutions are located in Bahrain.
Bahrain has joined the World Trade Organisation, WTO, and is reviewing laws and trade systems so as to conform with the prerequisites of full membership of this organisation.
The Bahrain Stock Market has shown steady growth with 530 million shares traded by October 31, 1997, having a total value of BD 139 million in 1483 contracts. Meanwhile the Index recorded a rise from 1533.30 to 3190.33.
The Bahrain Promotion Board is promoting opportunities for investment in Bahrain with particular emphasis on its efficient and advanced services sector. The campaign has succeeded in convincing a significant number of companies to move their regional headquarters into Bahrain. Incentives include full entitlement of foreign investors to 100 percent ownership of their projects; provision of a convertible national currency at a stable exchange rate to the US dollar; exemption from income taxes for companies; possibility of repatriation of invested capital; and finally low rates for using national utilities, energy, and telecommunications network including digital facilities.
Bahrain's dependence on oil has shifted dramatically from 36 percent of GNP 20 years ago to 20 percent in 1996. Meanwhile the services sector has paid dividends in terms of economic development.
Bahrain's oil industry has shown impressive growth with daily production capacity reaching 14,124 barrels by 1996. Given the importance of Bahrain's industrial base, the Ministry of Industry is concentrating on policies aimed at developing the industrial sector and giving priority to its needs in order to encourage it to develop further. It is also seeking to finalise legislation and regulations in connection with industrial establishments, renting of industrial land and the relationship between commercial property investors and operating companies.
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