The country is an important trading partner for the Kingdom of Bahrain. We plan to strengthen bilateral trade ties with the nation. We are in conjunction with the GCC countries to negotiate a free trade agreement with India, says Ali Al Mudaifa, Chief of Business Development, Bahrain Economic Development Board.
Ritika Arora Bhola
What was the purpose of your visit to India?
On the back of the CIA Summit, attended by the Kingdom’s 60-member business delegation led by the Bahrain Minister of Industry and Commerce, we are having meetings with different companies and stakeholders to bolster the relationship between Bahrain and India.
We believe there are so many untapped opportunities that we would like to capitalize on. We have had a strong relationship with India; Indian FDI stock in Bahrain is in the range of US$1.5 billion across different sectors, be it financial services, manufacturing, and many other sectors. We are looking to build on that. I am a member of the
Economic Development Board (EDB) and India is an important market for us. We have representatives based in the Indian cities of Mumbai and Delhi, who are in touch with the investors to explore opportunities in Bahrain to invest to serve the world.
How are logistics, air cargo and warehousing business shaping up post-COVID?
In October 2021, the Bahrain leadership launched a comprehensive economic recovery plan, which set out the economic priorities for the Kingdom and the growth plans for priority sectors such as air cargo, manufacturing, logistics, tourism, ICT, and financial services. We aim to double the cargo handling capacity volumes to one million tonnes per annum, triple the existing air freight capacity at the airport to one million
metric tonnes by 2030, and we have concrete plans in place to achieve that.
The plans include enhancing our air and sea connectivity and developing new zones in the Kingdom of Bahrain to encourage both sectors to grow.
For example, on the northern apron of Bahrain International Airport, Bahrain Airport Company is developing a new tailored-made cargo and logistics area catering to companies, couriers, express industry, freight forwarding, and last-mile delivery (LMD). The US-based FedEx is the anchor investor in the area, the company is relocating to this area to double its footprint.
Currently, we are in talks with other international companies that are inextricably linked with logistics. In the case of manufacturing, we want to encourage the volume of high value exports, includinga focus on downstream aluminium, petrochemicals, food and pharma-ceuticals, primary food, and renewable energy.
We aim to increase the sector’s contribution to gross domestic product (GDP) over the next couple of years.
How would you rate Bahrain’s logistics infrastructure. Is it good for multimodal cargo movement or is there need for improvement?
A good reflection of our infrastructure is thanks to an initiative launched last year, which essentially bonded a corridor linking our seaport to the airport and vice versa and assuring transit cargo companies in the Kingdom to leverage a multimodal process. This is something that has been done by virtue of the proximity of both ports. We have noticed the need during COVID when ferrying goods from point A to point B by sea was slow and inexpensive, while moving goods from point A to point B by air was fast, but expensive. So, we are looking to achieve this hybrid model whereby the freight forwarders and cargo firms can leverage it to get the best of both worlds. This is something used by the companies during the peak seasons, be it during the summer or the year-end period, to move goods such as commodities and perishables, among others.
We plan to augment infra as we are linked to the KSA via the King Fahd Causeway, opened in 1986, to cater to passengers, freight, road, rail and be linked to the interoperable GCC railway network. Once the project is completed, it will serve as a catalyst for growth and a game changer for Bahrain’s logistics.
How is EDB gearing up for growth during slowdown, and Russia-Ukraine conflict? What key growth strategies have been adopted?
We are blessed to be in a region that is experiencing high growth. The GCC is booming and so is the Kingdom of Bahrain. Since we have worked to strengthen the vital sectors of the economy. Bahrain has experienced an 8 per cent CAGR growth since 2002, and a 13 percent CAGR growth in non-oil exports. In 2002, the Kingdom’s nominal GDP was just under US$10 billion, today it is more than US$40 billion. We expect our proactive approach as it pertains to attracting investments to augment sectors to create jobs and training opportunities for locals. Upskilling will propel us to continue this trend.
After COVID, we are taking steps to address food security problems by storing commodities and vital food products, especially locally produced food such as aquaculture and poultry. We have plans to grow each of those food verticals to mitigate any risks that may arise when you have superior infrastructure. The Danish operator DSV, who recently set up in Bahrain, is considered one of the most prominent third-party logistics providers. Integrated logistics service providers have plans to grow this vertical in Bahrain to cater to this important segment. This is being reflected in some other discussions we are having with logistics companies across the world.
Where do the trade activities with India stand presently. What kind of cargo is moved to and from India?
India is an important trading partner for Bahrain, and we look forward to strengthening this. About 50 per cent of Bahrain’s population are expats of which Indians comprise a substantial portion. We plan to strengthen these bilateral trade ties. Our neighbours in GCC are negotiating a free trade agreement (FTA) with India; when it will be ratified and implemented is yet to be determined. It is in process, but it would go a long way towards enhancing the trade relationships and the flow of goods to and from India.
What, according to you, will be the major growth drivers in this year and beyond?
We are spending effort and money towards upskilling our locals with the skills of the future such as full stack software development, programming, coding, training and cybersecurity training and artificial intelligence (AI) among others. On the financial services front, we are concentrating on fintech, insurance, reinsurance, digital banking, and private banking. We are also focusing on logistics, freight forwarding, e-commerce, food, pharma, petrochemicals, hydrogen, and renewable energy.
Our wise leadership has committed towards carbon neutrality and achieving
net zero by 2060. We have increased the use of renewables, the number of trees planted across the Kingdom, and mangroves. We are encouraging firms, especially consumers of conventional energy, to adopt renewable and green sources such as solar power. We are looking to shift towards green energy, be it for industrial usage and human use. We have many upcoming govt tenders that will be issued relating to solar farm installations in the Kingdom.
