| 15 Aug 2008 |
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GDP of GCC reaches $735 billion
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Manama: The Gulf region, with an average sustained growth of 5.5 percent annually, has become one of the most robust economic blocs in the world. The combined gross domestic product of the Gulf Cooperation Council (GCC) is already $735 billion and by 2050 could close the gap with G-7 economies, the Economic Development Board (EDB) said in its annual report.
Regionally, the report added, the oil-price windfall has been re-invested in new infrastructure including transport, telecommunications, education, training and health care. Around $1 trillion infrastructure investments are in the pipeline. By 2010 this could reach a total of $3 trillion.
The population of the Gulf has grown 10-fold in 50 years, to 40 million two years ago, one of the highest rates in the world. Highlighting the salient features of Bahrain's economy, the report added that with its unique location at the heart of the Gulf, Bahrain would continue to be one of the fastest-growing markets in the world.
Widely regarded as the best-regulated financial center in the Middle East, Bahrain has been the region's undisputed financial capital for more than 40 years. Financial services currently make up 27.6 percent of Bahrain's GDP, and there are over 400 licensed financial institutions. This has created a large pool of local talent.
Of around 10,000 people employed in the industry, 72 percent are Bahrainis, with very high levels of financial skill and expertise. The sector is supervised by the Central Bank of Bahrain, which over the last six years, has functioned as the single regulator for the entire financial system.
The sector continues to grow strongly with banking assets rising by 33.5 percent two years ago and by more than 18 percent in the first half of last year. Bahrain plays host to a number of organizations central to the development of Islamic finance including the Accounting and Auditing Organization for Islamic Financial Institutions, the General Council for Islamic Banks and Financial Institutions, the International Islamic Financial Market and the International Islamic Rating Agency. Excellent opportunities for growth remain in mutual funds, fund administration, project finance, private banking and asset management.
To enable institutions to take advantage of these opportunities, CBB has created a license specifically for investment businesses.
International banking groups based in Bahrain include BNP Paribas, Citibank, Merrill Lynch, HSBC and Standard Chartered; Middle Eastern banks such as Arab Bank, the Arab Banking Corporation, Arcapita, Gulf International Bank, National Commercial Bank Capital, Gulf Finance House and Investcorp with Asian banks such as Bank of China and India's ICICI. Many insurance groups are also in the country including AIG, Alico, AXA and Zurich.
They enjoy a trusted regulatory environment, effective and transparent legislation as well as the best resources and expertise the region has to offer.
In Islamic finance, Bahrain has been an innovator ever since it brought sukuk to the international market.
Bahrain has continued to lead significant growth in this sector and has the largest concentration of Islamic financial institutions in the Middle East including commercial, investment and leasing banks, insurance companies and mutual funds. In the tourism sector, Bahrain offers great potential as both a regional and a world tourist destination, blessed with 33 islands, a cosmopolitan capital city; an attractive, liberal lifestyle and a rich history and culture.
Tourism-sector growth in the region is set to see a 6.7 percent increase in international tourists by 2010. In the past, Bahrain has focused on niche and boutique tourism as well as the meetings, incentives, conferences and exhibitions sector. Bahrain attracted 4.5 million business and leisure visitors two years ago.
Chaired by Crown Prince Shaikh Salman bin Hamad Al-Khalifa, EDB formulates and oversees development strategy. The board is responsible for creating a climate to attract direct investment and for marketing the Kingdom abroad through embassies and overseas offices in Japan, Hong Kong and India.
Mahmood Rafique
© Arab News 2008
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