Productivity, trade 'key to Bahrain growth'
Manama, May 21, 2013
The productivity growth – particularly in tradable sectors such as manufacturing – should be at the centre of sustained economic growth in Bahrain, said a top economist in the kingdom.
Dr Jarmo Kotilaine, the chief economist at the Bahrain EDB, was speaking at a seminar hosted by the Bahrain Economic Development Board (EDB) and the Centre for Research at Bahrain Institute for Banking and Finance (BIBF).
The seminar, entitled “Making sense of economic growth: Global experience and the Bahraini context”, saw contributions from panelists, Khalid Hamad, the executive director - Banking Supervision, Central Bank of Bahrain, Dr Mohammad Omar Farooq, the head of Centre for Research, BIBF and EDB officer Marwa Al Eskafi.
According to Dr Kotilaine, much of Bahrain’s growth over the past decade has come from the rapid expansion of sectors such as financial services, retail and services, construction and real estate.
"However, while they will remain important in the years ahead as well, the emphasis of development will likely shift more towards the tradable sector. Sectors of particular promise include knowledge-based services and high value-added manufacturing," he explained.
Dr Kotilaine stressed the importance of sustained investment as a driver of growth – something that has been particularly well highlighted by the post-war experience of Japan and the Asian “tiger economies.”
"One of Bahrain’s key competitive advantages in the coming years will be its growing young population, and investments in this human capital will be critical for the sustained expansion of the non-oil economy," said the top economist.
"In this area, Bahrain can build on an established track record of educational reform and through developed capital markets and a benign investment climate will also be critical for enabling the Kingdom to fully capitalize on this potential," he added.
Speaking at the event Dr Kotilaine said: “What is important is not just the level of economic growth in a given year but a development pattern that ensures sustainable and inclusive growth. The quality of economic growth is above all measured by its ability to provide Bahrainis with greater well-being and opportunities – now and in the future.”
Bahrain saw GDP growth of 3.4 per cent in 2012, with non-oil growth reaching 6.7 per cent, including growth of more than 9 per cent in manufacturing and 3.5 per cent in financial services. Estimated overall growth in 2013 is expected to exceed 5 per cent on the back of a rebound in oil production and ongoing expansion in the non-oil sector.-TradeArabia News Service