December 2016 69 www.bahrainthismonth.com earlier this year the Ministry of Industry, Commerce and Tourism announced a raft of regulation changes aimed at easing the process of doing business in Bahrain. At the time, His Excellency Zayed Alzayani told BTM these had been well received overall and he was planning to turn his attention to the tourism sector. Bahrain’s tourism market currently comprises around six per cent of GDP but it is hoped it will bring in around USD1bn in revenue by 2020. The Economic Development Board views the Kingdom’s tourism sector as a key area of growth and has been working towards promoting Bahrain as a destination for leisure industry investments. At the recent World Travel Market exhibition in London, Bahrain launched a campaign to promote the island as a wedding destination with many hotels and supply businesses joining with the tourism authority in the push. OBG forecasts Bahrain’s tourism to grow by 4.9 per cent annually until 2025 and CBRE’s latest property report highlights development in the hospitality sector, mostly in the five-star and luxury segment, with significant new properties either completed or in the pipeline. This year saw the opening of Downtown Rotana, in Manama, new Ramadas at Bahrain City Centre and Amwaj Islands, Gulf Residence in Amwaj, the Atiram Premier in Juffair and S Hotel, Seef, among others. Major investment has also gone into transforming Hawar Islands into an eco-friendly destination with wellness resorts, a bird research centre, a heritage market and restoring the 100-year-old Hawar mosque. Hospitality developments still in progress include the Wyndham Grand at Bahrain Bay and five new hotels expected to be built by Emaar Hospitality Group at Diyaar Al Muharraq’s Marassi site. Charles Russell Speechly’s (CRS) also notes: “On the private sector side, whilst catering for the wider Bahrain market, we also see trends towards healthcare tourism in the region; in particular between the Kingdom and Saudi Arabia. Projects such as Dilmunia and King Abdullah Medical City are two current examples.” Healthcare is also a big concern for Bahrain’s general population which has resulted in major investment in both the public and private sectors with CRS noting: “On the public sector side, the trend is towards smaller specialised health centres, clinics and facilities including diabetes care, autism and child services and sickle cell anaemia. Hamad Kanoo Health Centre in Riffa being an example of such a project.” Also in the public sector, a number of new developments and initiatives are deepening Bahrain’s pool of government housing, offering opportunities for a wide range of investors and industries. OBG reports that in early October Prime Minister HH Prince Khalifa bin Salman Al Khalifa announced that the construction of 5,000 units at the East Sitra housing project would begin before the end of this year, though no date for a contract tender was set. The Prime Minister’s announcement came just days after the government launched a tender for the construction of 1,246 residential units, part of the initial stage of the Al Ramli affordable housing project, which is being funded by the USD10bn Gulf Development Programme and will eventually include 3,720 housing units. Under a directive from His Majesty King Hamad bin Isa Al Khalifa, 40,000 residential units are to be added to Bahrain’s social housing stock, with 25,000 to be delivered by 2018. Importantly, these programmes will allow Bahrainis on lower incomes to accumulate equity, which can potentially be used as a springboard to gain access to finance or purchase other assets or real estate in the future. A raft of major industrial and infrastructure projects are also spurring activity and investment in the Kingdom’s construction industry. According to OBG, an initial set of large-scale projects is already under way, with several multibillion-dollar developments on track to be finished in the next three to four years. The total project pipeline – including long-term builds such as the USD3bn King Hamad Causeway, set to be completed around 2025 – amounts to USD72.7bn, up 4.7 per cent year-onyear. This includes the USD5bn Bahrain Petroleum Company (Bapco) upgrade and expansion of the Sitra refinery; the USD3bn Aluminium Bahrain (Alba) Line 6 smelting project; Bahrain Airport Company’s USD1.1bn expansion project; and the USD655m offshore liquefied natural gas terminal being commissioned by the National Oil and Gas Authority. Overall, it seems Bahrain is in a reasonable position to weather the ongoing financial storm. The government is taking steps to curb spending while encouraging economic diversity and investment and, while the country’s credit rating took a dive earlier in the year, the most recent rating from Fitch puts the situation at stable, allowing the prospect of future investment to thrive.
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