Bahrain can counter challenges

After the failure of the “Arab Destruction” movement, or the so-called “Arab Spring”, an incitement and defamation campaign was launched targeting the economy in those countries, including Bahrain and Egypt, in the hope of achieving their desired goals. Al Jazeera TV alongside the Iranian media led the campaigns, as in 2012 when they spread rumours that the Bahraini currency was going to collapse and that ten dinars would turn into one dinar.

What later happened was the other way round with more stability for the dinar, which is pegged to the dollar, while the Iranian currency took a nosedive and which eventually led to a devalued currency whereby a dollar is worth 100,000 rials instead of 10,000 rials in 2011. An unprecedented collapse bearing in mind that the dollar’s value was only 100 rials when Khomeini assumed power.

Once again, this campaign was repeated in 2014 with the collapse of oil prices. But the challenges facing the Bahrain economy can be diagnosed as normal and one that many other economies are facing, while the likes of Italy and Greece are facing more complex challenges than Bahrain.

The difference between Bahrain and Europe is that there are no incitement and distortion campaigns targeting EU economies. The ratio of public debt in Italy and Greece compared to their GDP is much higher than that of Bahrain, whereby two cases are indeed incomparable.

Objectively, does the Bahraini economy face challenges that need solutions? The answer is definitely a yes, yet they are surmountable. Its public debt needs to be controlled so that it does not deteriorate further, and the financial and economic management also needs reforming.

This is what the three Gulf states — Saudi Arabia, UAE and Kuwait — are calling for and willing to help in, with Moody’s saying this would boost Bahrain’s credit rating.

Is Bahrain in need of development projects to create more jobs? Also, yes. Does the private sector need to be pulled out of inactivity and pay attention to its active participation in development? Absolutely.

Regardless of these challenges, the economy has good potential for growth. It goes without saying that the local and Gulf-wide developments will make it possible to achieve wider scope for growth and improvement in living standards.

Among the most important developments are the UAE and Saudi Arabia announcing a strategic vision that will lead to an economic and strategic transition.

Second, the new discoveries of resources, particularly natural gas, will provide Bahrain with significant financial capabilities. Third, Bahrain is one of the most diversified Gulf economies, although this approach needs additional support.

The current expansion of the aluminium smelter will also transform it into the largest such in the world.

Fourth, Bahrain also has excellent opportunities to expand in many sectors, including transport and tourism. These can be opened for foreign investment, which would create thousands of jobs. For these and other reasons, we can confidently say that there is no fear when it comes to the island’s economy once it tackles its issues and challenges, which it is working on.

■ Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.