A BD378 million ($1 billion) technology city being set up at the Bahrain International Investment Park in Hidd is set to provide a major boost to the country's economy.

It is expected to improve growth in high-tech knowledge-based industries, according to Bahrain Chamber of Commerce and Industry (BCCI) chairman Dr Esam Fakhro.

'The project will bolster Bahrain's plans to make its industrial sector more competitive and shift the economy away from a reliance on oil,' he told the global publishing, research and consultancy firm Oxford Business Group (OBG).

Dr Fakhro was speaking as part of its forthcoming Bahrain 2011 report, which looks at economic activity and investment opportunities.

He said the project, a joint venture between the Economic Development Board (EDB) and Kuwait Finance House, formed part of Bahrain's bid to tap into industrial investment and increase the role of the private sector in line with its Economic Vision 2030.

'The project will focus on the manufacture and assembly of computers, electronics, pharmaceuticals and medical supplies,' he said.

'It will also aim to embrace small and medium enterprises (SMEs) since the private sector plays a major role in establishing and promoting industry through technological projects.'

Dr Fakhro said SMEs would be a driving force in propelling growth across Bahrain's economy, pointing out that structures had been put in place which would enable them to play a key part in its expansion.

'They will continue to play a major role in creating jobs and provide an alternative way to improve standards of living and mitigate negative effects of unemployment, particularly for young people,' he said.

The business leader said with the BCCI's support, SMEs in Bahrain were set to achieve great success and become a global model emulated by countries worldwide.

'Expanding Bahrain's heavy industries, spearheaded by the key aluminium segment, is a priority,' added Dr Fakhro, while acknowledging there were concerns about finite energy reserves.

He said plans to expand Bahrain's aluminium industry would drive forward the development of value-added products, ensuring gas exploitation brought maximum economic benefit.

'The issue of limited energy is certainly a concern, but efforts are under way to find and utilise economically feasible alternatives,' he said.

'Despite their heavy reliance on hydrocarbons, continued investments in these sectors are critical due to their important role in the national economy.

'The key is to facilitate the continued expansion of Bahrain's heavy industries.'

The report, which will be available in print and online, will mark the culmination of more than six months of research by a team of OBG analysts and provide information on opportunities for foreign direct investment into Bahrain's economy.

Dr Fakhro earlier said the city would employ thousands of Bahrainis.-TradeArabia News Service