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BH11 Contents:Layout 1 THE REPORT Bahrain 2011 ECONOMY ENERGY INDUSTRY BANKING TOURISM CAPITAL MARKETS INSURANCE REAL ESTATE CONSTRUCTION TRANSPORT TELECOMS & IT INTERVIEWS 9 7 8 1 9 0 7 0 6 5 3 9 2 CONTENTS BAHRAIN 2011 43 Careful oversight: The Central Bank of Bahrain ISBN 978-1-907065-39-2 45 Roundtable: Adel El Labban, Group CEO & Editor-in-Chief: Andrew Jeffreys Managing Director, Ahli United Bank; Editorial Director: Peter Grimsditch Abdulkarim Ahmed Bucheery, CE, BBK; Regional Editor: Oliver Cornock Jamal Ali Al Hazeem, CEO, BMI Bank; and Editorial Manager: Gregory Kramer Abdul Razak Hassan Al Qassim, CEO, National Chief Sub-editor: Alistair Taylor Bank of Bahrain Deputy Chief Sub-editor: Jennie 49 Standard practice: The regulator is in the Patterson Sub-editors: Sam Inglis, Sean Cox, process of implementing Basel III Elyse Franko, Esther Parker 51 Managing the recovery: A measured response Contributing Sub-editors: Miia Bogdanoff, Barbara Isenberg has mitigated the effects of the downturn 53 A fresh approach: Local banks are increasingly Analysts: Nick Anderman, Ben Campbell, Marc Hoffman implementing new strategies Editorial Research Manager: Susan A solid base Mano€lu CAPITAL MARKETS Editorial Researchers: Matt Ghazarian, Page 16 57 Trading up: A new exchange and solid Souhir Mzali fundamentals are expected to contribute to Art Director: Yonca Ergin In recent years Bahrain has increasingly focused future growth Art Editors: Cemre Strugo, Meltem Muzmuz on efforts to diversify its economy, reducing its 61 Interview: Fouad Rashid, Director, Bahrain Illustrations: Shi-Ji Liang dependence on the extraction of its limited Bourse Photography: Jonathan Lewis hydrocarbons resources and turning to a mod- 62 Interview: Arshad Khan, Managing Director and Photo Editor: Mark Hammami el based primarily on services and manufactur- CEO, Bahrain Financial Exchange Production Manager: Selin Bolu ing. The government has identified several 63 Mutually beneficial: Rapid growth seen in high-potential growth areas, including finance, mutual and other fund schemes Operations Manager: Yasemin Dirice Logistics & Distribution Coordinator: IT and tourism, and it is working to increase the Esen Barin role that these sectors play in the economy. ISLAMIC FINANCE Operations Assistant: Nefise Gurel 66 Golden opportunity: The sharia-compliant OBG would like to thank its local finance industry is poised for a sea change partners for their assistance and support in the research of this project. COUNTRY PROFILE 70 Paradigm shift: Branching out to increase 9 At the heart of the Gulf: Competitive stability and market depth advantages in a business-friendly environment 71 Interview: Abdulhakeem Alkhayyat, Managing 14 Interview: Sheikh Khalid bin Ahmed bin Director and CEO, Kuwait Finance House (KFH) Mohammed Al Khalifa, Minister of Foreign Bahrain Affairs INSURANCE ECONOMY 74 Well covered: Maintaining growth in spite of 16 A solid base: Diversification continues apace in difficult times the Gulf’s most open market 79 Interview: Sheikh Mohammed bin Isa Al Khalifa, 23 Interview: Sheikh Mohammed bin Essa Al CEO, Social Insurance Organisation Khalifa, Chief Executive, Economic 80 Realigning reinsurance: Domestic firms are Development Board and Chairman, Tamkeen taking a greater share of the market 24 Interview: Rasheed Mohammed Al Maraj, 82 Expanding the life market: The long-term Governor, Central Bank of Bahrain segment has experienced rapid growth 25 Home-grown talent: Training and skills development to make locals the employees of choice 28 Joint effort: GCC-wide economic integration Golden opportunity continues to be put on hold Page 66 31 Engines of growth: Training programmes and funding ensure smaller businesses thrive As of March 2011, the Islamic banking 33 Interview: Jameel Humaidan, Minister of Labour sector had total assets amounting to 34 Interview: Talal Al Zain, CEO, Bahrain $24.6bn, representing about 12% of Mumtalakat Holding Company Bahrain’s banking sector. The country 35 Balancing act: Temporary declines in some was the world’s fifth-largest sukuk mar- sectors are offset by growth in others ket in 2010, with some $680m of Islam- 37 Interview: Craig Emerson, Australian Minister ic bonds issued, and the government of Trade is encouraging secondary trading of these assets. Diversifying Islamic finan- BANKING cial products will be a focus for the 40 Back on form: A return to profit in 2010 has industry during the coming few years. boosted spirits 4 CONTENTS BAHRAIN 2011 Chairman: Michael Benson-Colpi REAL ESTATE & CONSTRUCTION 116 Onward and upward: The sector looks to new Director of Field Operations: Elizabeth Boissevain segments for continued growth 122 A healthy change: The financial downturn Regional Director: Abby Lindenberg Country Director: Syanna Swyers has resulted in sector improvements 123 Interview: Basem bin Yacob Alhamer, Field Operations Executive: Meltem Okur Minister of Housing Field Operations Coordinator: Zeynep 124 Homeward bound: Developments under Akdamar way to meet demand Project Coordinator: Grace Aguiluz 126 Bricks and mortar: Moving into new segments For all editorial and advertising bodes well for future expansion enquiries please contact us at: [email protected]. To order a copy of this publication IT or to enquire about your subscription 130 Opening up: Growth and investment please contact us at: [email protected]. opportunities continue to multiply 134 Buying time: Sales are climbing as the All rights reserved. No part of this Transformation publication may be reproduced, stored economy strengthens in a retrieval system or transmitted in 135 Interview: HH Sheikh Mohammed bin any form by any means, without the initiative prior written permission of Oxford Mubarak Al Khalifa, Deputy Prime Minister Business Group. Page 87 and Chairman, Supreme Committee for Whilst every effort has been made to Information and Communication Technology ensure the accuracy of the informa- After decades of leveraging its reserves to tion contained in this book, the power industry, Bahrain is now working to authors and publisher accept no TELECOMS responsibility for any errors it may identify alternative fuel sources. Exploration 139 Smooth operators: Heightened competition contain, or for any loss, financial or continues and the Kingdom is even looking otherwise, sustained by any person and new technology are driving the market using this publication. abroad for imports, while enhanced oil recov- 143 Interview: Mohammed Al Amer, Chairman, ery is expected to boost production at home. Updates for the Telecommunications Regulatory Authority information provided in this and President, Central Informatics Organisation volume can be found in Oxford Business Group's 'Online Briefings' ENERGY 144 In the loop: New measures should heighten service available via email or at 87 Transformation initiative: Focus turns to the level of competition www.oxfordbusinessgroup.com maximising local supply and considering imports INDUSTRY 93 Interview: Abdul Hussain bin Ali Mirza, 146 Success by design: A concerted shift in focus Minister of Energy; Chairman, National to manufacturing has paid off Oil & Gas Authority; Chairman, Bahrain 152 Interview: Esam Abdulla Fakhro, Chairman, Petroleum Company; and Chairman, Tatweer Bahrain Chamber of Commerce & Industry Petroleum 153 Fully serviced: One industrial zone specialises 95 Optimising output: Enhanced techniques in multinational export-oriented firms are hoped to drastically increase oil 155 Aluminium assets: Production expansion is in production the works for smelting operations 97 From the source: Continuous upgrades are 157 Favourable framework: Legal and tax expanding oil-based product offerings benefits continue to pave the way for 99 Power supply: Focus shifts to independent foreign investment producers to meet electricity demand 101 Clear directive: A new council is tasked TOURISM with maximising non-conventional 160 New angles: Diversification in the sector potential aims to bring in a wider range of visitors 166 Hospitality upgrade: Increasing hotel and TRANSPORT resort infrastructure 105 Linking up: Connections and services are expanding 110 Steady flow: Establishing a transit nexus for the logistics industry 112 Improved connections: Large infrastructure projects are upgrading the road network 113 Interview: Sheikh Daij bin Salman Al Khalifa, Chairman, General Organisation of Sea Ports and Chairman, ASRY 114 Interview: Gordon Dewar, CEO, Bahrain Airport Company www.oxfordbusinessgroup.com/country/Bahrain CONTENTS BAHRAIN 2011 5 167 Interview: Sheikha Mai bint Mohammed Al Khalifa, Minister of Culture 168 Interview: Hassan Fakhro, Minister of Industry Linking up and Commerce, and Chairman, Bahrain Exhibition and Convention Authority Page 105 169 All aboard: Strengthening the economy as Creating more effective connections ships call at port through the expansion of ground, sea and air networks is strengthening Bahrain’s role EDUCATION as a regional centre of commerce. Large 172 A careful study: Work to implement sums have been invested to upgrade the reforms to the educational system is currently road network, while the opening of a new under way port has increased container volumes. The 175 Bridging the generation gap: The Kingdom’s logistics industry is also benefitting from youth move into the spotlight the improved facilities and infrastructure. 176 Supply and demand: Ensuring training matches the needs of the national economy HEALTH 178 Surging forward: Private providers are helping
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