Non-oil sources key to Bahrain economic growth

Manama / TNS

Bahrain’s future prosperity can be built around a three-point strategy of national economic development as Middle East governments take robust action to flourish in a new post-oil era, according to new analysis.
A report, by PA Consulting Group, says the key for Bahrain and
other GCC countries will be in developing human capital, developing economies and reforming the business of governments. It says GCC governments have already taken steps to combat the threat of low oil prices by committing to develop their nations through focussing
on human resources and attracting investors.
The market analysis, issued from PA’s Mena regional headquarters in Abu Dhabi, emphasises that a growing focus on national economic development will help Bahrain leverage on current challenges and move to the next level.
“The region is moving towards a new post-oil era, and the GCC governments have started to review their economic ecosystems and begun to decrease their dependency on oil revenues to focus on non-oil revenue sources,” said PA Consulting Group Mena head Jason Harborow.
“Qatar has been focusing on developing its economy by investing in tourism, healthcare and education, as it remains under pressure from the slump in oil prices. The same applies to Bahrain, Kuwait, Oman and the rest of the region.
“Governments must now plan and implement a highly intellectual educational infrastructure that will help grow and develop resources to become globally recognised leaders and drive towards excellence.”
The PA report says Bahrain and other GCC countries should invest in their citizens, develop them, and support them to become the next generation of leaders to drive innovation of economies and market a nation’s success. This will have a major impact on the social and economic agenda.
PA Consulting Group economic and government services expert Ibrahim Komati said regional governments need to increase foreign direct investments, and diversify spending into global investments across different sectors, with the main focus on education, healthcare and travel, transport and logistics.
“Governments should also invest in non-profit organisations serving as a backbone to a nation’s development, whether in education, social affairs, healthcare or human development,” he added.
PA, which works with businesses and governments worldwide, says priority government actions should include a review of strategies and operating models to ensure agility to adapt to the new normal.
“A priority for governments is to develop contingency plans, and slashing costs is not the only solution. They must focus on their strengths and competitive advantages, and embed the culture of excellence and innovation in order to reach their ambitions and drive transformations in the most innovative and unique way,” said Komati.
“Innovation is the best way to hit the ground running for the region should oil prices remain low. Governments should focus on human capital development, economic development and on transforming their businesses to cope with changes.”
The PA report says regional governments should plan a “War on Waste”, minimising inefficiencies by focusing on targeted reductions. They must review funding plans and consider raising cash in the debt markets such as public-private partnerships (PPPs) and sukuk and keep enough cash as a buffer to back up contingency plans.