small in numbers but large IN FINANCE
The smallest country in the Arabian Gulf/Persian Gulf, Bahrain, has hit the last years the headlines mainly due to internal instability, as the political and economic conflict between the Sunni-led Kingdom and the Shi’a majority of the population is still looking for new roads to cooperate. External influences or interference are clear, as Iran is playing a major destabilizing role in the current local conflict. However, after a harsh economic crisis just after the Arab Spring, Bahrain is showing a strong and healthy economy, in which in contrast to other Arab countries, oil and gsa are not playing the leading role. Bahrain has been since decades trying to build up a regional power position in finance, which made it before the Arab Spring one of the main financial hubs of the region. Since a couple of years, major investments are made to recover this position, as the immense build up in Manama’s financial district is showing. International banks and SWFs are flocking to the offices in Manama to take the advantage of a well-defined and structured economy, stable government and access to major markets in Saudi Arabia and the UAE. As Bahrain is seen as one of the doors to Saudi Arabia, it has become a very suitable and active place to set up shop.
With a reasonably small oil and gas reserves the Kingdom has been building its future on other sectors. Since a couple of years, this could however change dramatically. The discovery of a potentially 80 billion barrels of shale oil (and gas) offshore Bahrain, a new oil era is approaching. If results of current assessments ongoing are positive, Bahrain could be heading for an oil boom of unknown proportions. At the same time, the island could become the first ever offshore shale producer in the world, opening up new technological and economic sectors on which it can build part of its future. The shale oil future will not only be supporting the conventional oil and gas services sectors, but also will be a stimulus to its logistical position (ports), shipyards (ASRY) and financial centre. A renewed international focus on the Kingdom is to be expected in the coming years.