Non-oil industries fuel 85% of Bahrain’s economy as National Action Charter pays off

TDT | Manama

Email: mail@newsofbahrain.com

Bahrain’s non-oil industries now drive 85 per cent of the economy, a sharp break from the days when oil ruled the roost.

The shift, years in the making, stems from a drive to broaden the country’s income since the National Action Charter set the wheels in motion.

Finance and manufacturing are leading the charge, with government policies pushing their expansion.

Charter’s launch

Since the charter’s launch, Bahrain has steered itself away from oil dependence, spreading its bets across financial services, industry, and tourism.

The Kingdom has set its sights on building a sturdier economy by backing these key industries. Bahrain has also made its mark as a financial hub in the Gulf, with banking — especially Islamic finance — at its core.

The country is home to a spread of financial institutions, from traditional and Islamic banks to insurance firms.

Figures lay out the state of play.

The financial sector chips in 16.7 per cent of GDP, with 406 firms in operation.

Sectors

Manufacturing follows at 14.5 per cent, then transport and communications at 6.8 per cent, construction at 6.6 per cent, real estate at 4.1 per cent, and hotels and restaurants at 2.4 per cent.

Other service industries make up 18.7 per cent. Oil, though still in the mix, now accounts for 20.8 per cent of GDP. Economic growth runs at an average of 5 per cent a year.

Non-oil industries

According to Sustainable Development Minister and Economic Development Board Chief Executive, Her Excellency Noor Al Khulaif, non-oil industries are now the backbone of Bahrain’s economy.

Speaking during the Davos Forum, she pointed to manufacturing as the second-largest contributor outside oil, with aluminium playing a key role.

Data from Bahrain’s Open Data Portal backs this up.

Manufacturing

In the first quarter of 2024, manufacturing made up 21.01 per cent of GDP, the second-highest contributor.

That dipped to 18.93 per cent in the second quarter before climbing back to 20.08 per cent in the third.

The country’s economic blueprint was set down in 2008 when His Majesty the King signed off on Economic Vision 2030.

It lays out a path for growth, with a sharp focus on lifting living standards.

Principles

At its core, the plan rests on three key principles: keeping government finances steady, making Bahrain more competitive on the world stage, and ensuring fairness across the board.

The first relies on sound spending and backing workers through training and skills development, especially in applied sciences.

Competitiveness hinges on making businesses more productive, cutting red tape, and giving the economy the push it needs to grow.

As for fairness, the plan calls for openness in both the public and private sectors, from hiring practices to land auctions and tendering deals.