Bahrain’s economy is based on various factors and oil is one of the contributors, enough to impact the growth rate in its GDP. The economic overview is of the mixed kind with many primary industries under the hold of the government and private development of other sectors, telecommunication, utilities and finances at the forefront. The future development is aimed to diversify the economy by investing the oil revenue into the expansion of other sectors. Within the Middle East, Bahrain is a financial and business hub that speaks of its importance and contribution to the big picture of this region.
The economy was suspected to fall by 1.8% due to the crash of the crude oil industry in 2020 but did well for itself due to the policies that emphasised diversifying the economy as mentioned above. Yet, the pandemic has hurt the economy as 60% of revenue is based on oil but the remaining 40% has been of some support. Apart from cruise oil, other areas of impact are the services and tourism sector, both of which contribute significantly to the revenue, other than oil and aluminium. The global impact has not left Bahrain untouched but early preventive measure and early investment into fiscal policies other areas of economic focus have helped the country float.
The once again rising oil prices would only help the economy bounce back by 2% which is a small margin of what should have been 2021 growth. But there is a definite pick up in the revenue, nonetheless. One of the reasons has been the investment from oil revenue into the IT sector of the company. This fact combined with the business supportive policies that lead to effective cost and competitive market along with a large population of talent makes the strategic business location of Bahrain, even better to the opportunistic eyes of enterprises.
Diving into IT subsectors, Bahrain has taken a special interest in services outsourcing, cybersecurity, e-commerce and digital entertainment. With so much going for Bahrain on the technological front, the country decided to adopt a policy of ‘cloud-first’ across the country and hence being the first in the region to do so. Leading by example, the country has fared better for itself despite the plunge in its primary industries dues to these safeguards in place that benefited large quantities of small enterprises of the sector and the country.
Conclusively, the combination of the strategic positioning of Bahrain and the conditions that support business success led to multiple business setups in the country. Top that with investment policies that focused on secondary and tertiary sectors (IT being one of them). Bahrain is fared better than its neighbouring countries in crisis.