Bahrain outperforms the GCC and the rest of the world in dimensions such as economic stability, employment, education, and infrastructure, according to a new report from The Boston Consulting Group (BCG).

When it comes to its current-level Sustainable Economic Development Assessment (SEDA) scores, the dimensions in which Bahrain lags behind other GCC countries include income, employment, health and environment, added the report entitled “The report, titled The Private-Sector Opportunity to Improve Well-Being: The 2016 Sustainable Economic Development Assessment”.

Interestingly, while Bahrain showed the strongest recent progress scores in education and infrastructure—compared to the GCC region and the rest of the world, according to the report.

In addition, the analysis shows that Bahrain has not effectively converted its wealth into well-being.

The report also discusses the need for the private sector to contribute to improving a country’s wellbeing, and specifically looks at the role of the banking sector at creating financial inclusion.

“We have found a clear and measurable association between financial inclusion—access to basic financial services such as a bank account—and national well-being,” said Douglas Beal, BCG's Director of Social Impact and an author of the report.

“Today, in the UAE, private sector innovation can play a significant role in improving living standards. But to make meaningful progress in this area, banks must pursue financial inclusion using their core business, and not just pursue typical corporate social responsibility strategies.”

The findings are based on BCG’s latest study of worldwide economic growth trends using the firm’s Sustainable Economic Development Assessment (SEDA). The fact-based, comprehensive analysis measures the relative well-being of 163 countries—including Bahrain—through ten key areas, including economic stability, health, governance, and environment.

SEDA scores countries in two ways: the current level of well-being and recent progress in well-being from 2006 to 2014. It also assesses how countries convert wealth and growth into well-being.

Spotlight on Bahrain

Overall, when looking at Bahrain’s current level of well-being as well as its recent progress in that measure, the nation finds itself in the ‘good but losing ground’ category.

From a regional perspective, Bahrain’s current-level scores are mostly above or on par.

In terms of recent-progress scores, when stacked up against the average of the GCC, the nation is significantly above par in education but is falling behind in income, employment, health, civil society, governance and environment.

All in all, when assessing Bahrain’s performance versus the rest of the world, it is clear that across a number of dimensions—including income, education, civil society, income equality, economic stability, infrastructure and employment—the nation is higher and moving further ahead.

The importance of financial inclusion

The 2016 SEDA report took a close look at the issue of financial inclusion. The analysis found that the strong link between well-being, as measured by SEDA and financial inclusion existed even when controlling for income.

“This means that among countries with the same income (GDP per capita) level, those with higher levels of financial inclusion are likely to have higher well-being levels,” added Beal.

“Our study finds that two factors are critical to improving financial inclusion: a regulatory structure that provides safeguards but allows innovation and a solid infrastructure, including communications networks and payment systems. With those two elements in place, private-sector innovation in Bahrain can flourish.” – TradeArabia News Service