BAHRAIN’S ECONOMIC VISION 2030

 

 

 

 

 

 

 

BAHRAIN’S ECONOMIC VISION 2030

 

 

 

 

 

 

 

 

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Introduction

Bahrain developed its economic vision plan and launched it in 2008 in an effort to revamp its oil-dependent economy. The Economic Development Board (EDB) manages the Bahrain Economic Vision 2030 plan and ensures that the plan achieves its goal of improving the welfare of Bahrainis. The economic vision focuses on reducing the dependence of Bahrain’s economy on oil and diversifying on tourism and hospitality, business services, logistics, and manufacturing. The Economic Development Board posit that focusing on the development of the identified sectors will help in addressing the major economic challenges affecting the Bahrain government such as job creation and the improvement of the living standards of the citizens. The economic vision is guided by three underlying principles that include fairness, competitiveness, and sustainability. The Bahrain Economic Vision 2030 acknowledges that education is critical in the realization of the country’s economic growth since the current education system does not provide prerequisite skills to enable young people to succeed in the labor market. Consequently, the economic vision 2030 plan seeks to improve the Kingdom’s quality of education to ensure that more Bahrainis are employed and reduce the number of expatriates working in Bahrain. The Economic Vision 2030 plan seeks to produce a competent Bahraini workforce and increase the number of job opportunities. Bahrain is a small archipelago, and its rapidly expanding population is likely to exert pressure on the realization of the economic vision of improving the lives of Bahrainis.

The Bahrain Economic Vision 2030

The Bahrain Economic Vision 2030 provides guidelines of the growth and development of the Kingdom’s economy, and it focuses on increased private sector participation in the economy. The economic vision plan seeks to reduce the Bahrain economy’s dependence on oil extraction and make the Kingdom’s economy competitive in the region. According to the Vision 2030, the government will cede many activities to the private sector and only take an oversight role on Bahrain’s economic activities. The Bahrain Economic Development Board hopes that the achievement of the Vision 2030 will help double the disposable income of each Bahraini household and create a broad middle class for the Kingdom’s citizens. The board also hopes that the economic revitalization plan will result in the creation of high-wage jobs. The private sector employs very few Bahrainis in highly paying jobs and most of the natives are employed in low-skill and low-paying jobs. Bahrain seeks to increase the number of jobs by encouraging Foreign Direct Investment by foreign organizations or countries.

Bahrain has relied on the revenues generated from oil extraction and direct provision of employment opportunities in the public sector to Bahrainis to reduce the impact of weak job creation. Consequently, the Kingdom has a bloated public sector that is perceived as unsustainable due to slowly diminishing oil reserves. Bahrain seeks to use its Economic Vision 2030 plan to encourage innovation and entrepreneurship through the creation of a conducive business environment, and enhance economic activities. The plan will allow Bahrain’s economy to enhance its level of innovation and sophistication and enable the Kingdom to gain a good status in the international value chain. The Kingdom will use its Economic Vision 2030 plan to develop high-value-adding and knowledge-based firms. The Economic Development Board points out that the financial sector will remain critical in Bahrain’s economy. Other important segments identified in the Economic Vision 2030 include logistics, manufacturing, business services, and the tourism sectors. Shebeb & Al-Saleh (2009) note that Bahrain’s will achieve its intention of diversifying its economy through improving various factors of production such as the human resources. Bahrain seeks to improve its human capital by offering intensive education and training opportunities to its citizens, especially in different applied sciences. The Kingdom hopes that this will enable Bahrainis to compete effectively against foreigners for employment opportunities within the country. The Bahrain Economic Vision 2030 plan indicates that by the year 2030, success will reward talent and hard work within the Bahraini society.

The Bahrain government seeks to compete with leading countries in terms of productivity, and it seeks to encourage local companies to be productive through various methods. For instance, the government will offer incentives to encourage gains in productivity within the private sector and open its markets to motivate best practices and innovation in local companies. The government will continue to offer more opportunities to foreign companies since this helps in challenging local companies to enhance their creativity. The government will ensure that the Kingdom’s economic growth is beneficial to all its citizens by ensuring fairness in the job market for its citizens through revision of Bahrain’s labor laws. The government will also ensure that the Bahraini employees receive increased remunerations in all sectors within the nation’s economy. The Bahrain government will offer assist Bahrainis to access support programs to enable them access better-paying job opportunities. The government will evaluate its success in enhancing the productivity of Bahrainis and local companies by analyzing changes in its real Gross Domestic Product per capita, the number of Bahrainis employed in well-paying positions, changes in the quantity of Foreign Direct Investments, and the total number of Bahraini citizens employed in the country by the year 2030.

The government will diversify its economic activity to encourage revenue generation from non-oil sectors such as logistics, manufacturing, business services, and tourism. The Bahrain government will promote its sectors oriented towards exportation of goods to ensure that local companies adapt to the international markets. The Kingdom will facilitate the private sector growth by creating an enabling environment that encourages innovation and entrepreneurship. The government will assist the small businesses to access financial support, and create a platform for encouraging creativity to allow the local businesses utilize the global knowledge economy. The government will ensure economic growth through a fair and transparent regulatory system that discourages favoritism and corruption. Bahrain will conduct more inspections to ensure that all businesses operating in the country observe the regulation, and ensure fast dispute resolution in case of any disputes.

Furthermore, the Bahrain government will focus on upgrading its infrastructure to connect the country to the international information highways and global trade. The government will develop and maintain the appropriate infrastructure by using private and public funds. By the year 2030, the Bahrain government hopes to build effective air, sea, and road connections to international markets while increasing the accessibility of utilities and services such as public transport and logistics. The prices of the utilities and services will be made affordable to enable small businesses access them. Some of the proposed strategies to improve the country’s infrastructure by the year 2030 is through enhanced planning for elasticity supplies, transportation networks and land utilization. The government will also encourage the involvement of the private sector in offering public infrastructure services.

The number of employees contracted by the government overwhelms Bahrain’s public spending since the government uses most of its revenues in paying its civil servants. As previously indicated, the government’s strategy of reducing the impacts of unemployment was to offer employment opportunities to many Bahrainis although their level of education was not appropriate. The Bahrain government understands that this is no longer sustainable due to the diminishing oil deposits. Consequently, Bahrain seeks to streamline its public sector, and make it more effective and efficient. A leaner public sector will enable the government to increase the productivity of its public sector. The government will eliminate redundant and inefficient processes within its public administration. The government will also develop effective public policies that promote the delivery of high-quality services. The Bahrain government will also take other measures to increase the productivity of its public sector. These measures include enhancing the governance of Bahrain’s civil service, and the transformation of the country’s human resource management in the public sector. Other measures include the revision of the government’s processes and organization to increase transparency, and creation of systems that evaluate and manage the performance of employees in the public sector by setting concise goals for the employees, evaluating their performance, and rewarding the deserving employees appropriately.

The Bahrain government seeks to expand its health sector and upgrade various health facilities in the country. Unhealthy lifestyles, increase in non-communicable diseases, and the aging population have added pressure on Bahrain’s public healthcare institutions (Bahrain Economic Development Board 2011). The government will rely on the private sector to build new hospitals and various healthcare facilities, and this is also partially due to the increasing demand in medical tourism. The government will seek to educate more Bahrainis as doctors and medical personnel, and this will help in reducing the Kingdom’s reliance on expatriate medical personnel. The government has already opened the King Hamad University Hospital to allow local students to access learning opportunities in medicine. The Bahrain government focuses on the provision of high quality and affordable healthcare, and become a major destination for modern medicine within the region. The government seeks to offer effective medical care to its quickly expanding and aging population by ensuring that patients have fast, equitable, and convenient access to high-quality healthcare attention. Bahrain will ensure that the activities within its healthcare sector are regulated effectively by contracting an independent regulator to manage the healthcare sector. However, the government will also participate in improving its healthcare sector by encouraging good ethical practices among employees within the sector, and promoting healthy lifestyles among Bahrainis. The government will train, attract, and retain employees with good skills and experience in the provision of healthcare services. The government will measure the success of its initiatives to improve the healthcare sector by analyzing the changes in life expectancy and infant mortality among its citizens. The government will also use the ratings by an independent regulator on the performance of its healthcare sector to evaluate its success in offering high-quality healthcare.

The Bahrain government understands that education is critical in enabling people to realize their maximum potential in various activities. Education also influences future leaders that Bahrain requires, and will enable Bahrainis acquire crucial knowledge, values, and skills that will enable them become the best candidates for highly paying job opportunities. Education is critical in enabling the Bahrain government to realize its economic vision 2030 plan. Consequently, the government seeks to create an effective education system that will enable all Bahrainis to access education that allows them to achieve their aspirations, realize their individual needs, and enhance their abilities. The training and education offered to Bahrainis has to be consistent with the needs of the country and its economy. The training and education must also be accessible to all Bahrainis based on merit and ability, and have the highest quality standards. The government seeks to realize this through the creation of clear strategies to improve the performance and standards within various learning institutions. According to a report by the Quality Assurance Authority for Education and Training, some of the strategies of improving the education sector include improving methods of assessing students and teachers, and the creation and enhancement of higher-order thinking abilities (Karolak 2012).

The strategies will focus on empowering teachers through enhancing their training, improving the management of teachers’ performance, bettering the image of teachers within the Bahraini society, and enhancing the attractiveness of the teaching profession. The government will offer high-quality training to Bahrainis to enable them compete effectively in global labor markets while attracting new industries to the country due to the abundance of skilled labor. The Bahrain government will create quality standards in the education sector, frequently evaluate the performance of its learning institutions, and compare their performance with that of Bahrain’s competitors. Finally, the Bahrain government will encourage its higher learning institutions to focus on research and development to facilitate the creation of a knowledge-based economy.

Weaknesses of the Bahrain Economic Vision 2030

One of the reasons why the Bahrain Economic Vision 2030 plan is likely to fail is because the plan does not provide clear outlines how Bahrain will achieve its goals stipulated in the vision plan. Bahrain should introduce various milestones and benchmarks that are achievable in a shorter period rather than focusing on an economic vision plan of more than two decades. Using such a long-term economic vision plan increases the complexity of implementing such a plan or realizing its targets. The Bahrain Economic Vision 2030 plan also does not include specific and achievable targets. The economic vision plan merely indicates that the Bahrain Kingdom’s ambition of improving the quality of education offered to Bahrainis and its health sector. For instance, the economic vision 2030 plan indicates that Bahrain will train more teachers to help in revitalizing the country’s education sector, and it will evaluate the success of this goal through students’ scores in various examinations. However, the economic vision plan does not indicate the proportion of Bahrainis to be trained as teachers.

The plan also fails to indicate the teacher to student ratio it seeks to enable Bahrain achieve its goal of improving the quality of education offered to Bahraini students. Bahrain should be clear about the teacher to student ratio it wishes to achieve since this is an important factor in improving the quality of education offered to students. The Bahrain Economic Vision 2030 plan states that the scores attained by students in different tests will be used to gauge the improvements in the country’s education sector. However, the country’s needs are likely to change during the twenty years Bahrain will implement its economic vision plan. Since Bahrain wants to enable its citizens to compete on an international level, it has to develop a curriculum that allows the provision of high-quality education.

Another weakness of the Bahrain Economic Vision 2030 is the fact that the plan has a very long timeframe of approximately 22 years. During such a long duration, it is probable that many changes in the global economy and technological advancements will occur. Such changes would make the Bahrain Economic Vision 2030 irrelevant or ineffective. Consequently, the Kingdom should use an economic vision with a shorter span to enable the country compete with its local competitors.

Another challenges facing the realization of Bahrain’s economic vision are internal conflicts due to the division between the Sunni and Shi`a Muslims. The Bahraini political system presents a major threat to the kingdom’s economic prosperity. Sunnis lead the kingdom, and this implies that they control most government posts and business opportunities although they constitute between 30% and 40% of the population. On the other hand, the Shi`a Muslims who are the kingdom’s majority claim that they continue to be excluded from government jobs and have fewer business opportunities (Vlahos 2012). Furthermore, a great division exists between people who believe that the Islamic religion should guide the Bahrain’s economic activities, and the individuals who argue in favor of the non-religious and liberal civil rule to guide the country. The Sunni Muslims prefer the use of the civil rule whereas the Shi`a Muslims prefer the religious rule. Since Bahrain’s independence, the country has experienced numerous issues with Shi`a fundamentalists. The kingdom risks being drawn into the problems due to religious extremism and sectarianism.

Finally, another challenge facing the country is the issue of external influence on the country’s activities. Several foreign countries seek to influence Bahrain’s decision-making cycles and alter the kingdom’s future. For instance, Iran also allegedly has terrorist cells in Bahrain, and this complicates the relationships between the Sunni and Shi`a Muslim factions. Bahrain also depends on many expatriates in its major industries, and this presents a challenge to the realization of the vision 2030. The economic vision predicts that the private sector businesses would play a critical role in the Bahrain economy. Indeed, the private sector currently employs more than 90% of working Bahrainis. However, foreigners hold most of the important employment positions, and this complicates the realization of the economic vision 2030.

In the past, Bahrain’s economy experienced considerable growth in its GDP, and this was facilitated by a resurgence in oil prices and regional economic growth. According to the Government of Bahrain (2008), the amount of Direct Foreign Investment (FDI) increased by approximately BHD 0.9 billion between 2003 and 2006. Although Bahrain seeks to diversify its economy further, its reliance on revenue generated from the extraction of oil continues and the country seeks more foreign investors to increase its oil production. For instance, Bahrain contracted Occidental to conduct deep gas exploration and several international companies to revamp its oil industry. This demonstrates that the oil sector is still critical to the country, and Bahrain’s economy will continue to rely on the sector for a long time.

Conclusion

The Bahrain Economic Vision 2030 plan seeks to enhance the living standards of Bahrainis and the quality of services they receive from government institutions. The economic vision 2030 plan focuses on reducing the country’s reliance on oil revenues by facilitating the development of the private sector. Most of the individuals employed within Bahrain’s private sector are foreigners since many Bahrainis lack skills sought by the employers. Consequently, the government intends to improve its education sector through different measures such as training more teachers and bettering the quality of their services. Despite the good plans and outlay of the Bahrain Economic Vision 2030 plan, the plan has several weaknesses that may make its realization complicated. The greatest weaknesses observed include a long timeframe of implementing the economic vision plan and lack of clear and achievable targets. The long timeframe is likely to make the economic vision plan ineffective as changes in the global markets and technology occur. The Bahrain government should consider including measurable goals in its economic vision 2030 plan. For instance, the government may state that it seeks to achieve a 17% increase in its GDP by the year 2030 when values of the country’s GDP are compared with the GDP in 2030. Clear and measurable goals will help the Bahrain government focus on attainment of individual targets.

 

 

 

 

References

Bahrain Economic Development Board. (2011). Annual report 2010: Bahrain Economic Development Board. Retrieved from http://www.nommeraadio.ee/meedia/pdf/RRS/Bahrain%20-%20EDB%20Annual%20Report%202010%20English.pdf

Karolak, M. (2012). Bahrain’s tertiary education reform: A step towards sustainable economic development. Revue des Mondes Musulmans et de la Mediterranee, (131), 163-181.

Sheheb, B. & Al-Saleh, N. (2009). Competitiveness and productivity change: Bahrain manufacturing industries. Arab Economic Journal. 45 (1): 1 – 16.

The Government of Bahrain (2008). From regional pioneer to global contender: The Economic Vision 2030 for Bahrain. Retrieved from https://www.evisa.gov.bh/Vision2030Englishlowresolution.pdf

Vlahos, K. (2012). The looming Sunni-Shi`a crisis. Retrieved from http://www.theamericanconservative.com/articles/the-looming-sunni-shia-crisis/