Cost advantage favours Bahrain

Cost advantage will act a winning factor for Bahrain when compared to its gulf neighbours, according to a top Bahraini official. Khalid Al Rumaihi, chief executive of the Economic Development Board of Bahrain , told Financial Times that the Kingdom’s well-trained population plus an innovative regulatory environment can create ideal conditions for back-office functions and financial technology firms.

These factors will put Bahrain in advantage when competing against Dubai or Abu Dhabi, he added. “I’m selling Bahrain with these advantages, with these sectors that make sense,” he was quoted as saying. Global institutions, he adds, are unlikely to shift their investment banking teams from the globally connected hub in Dubai. “I’m going to talk to [companies] about middle office,” Mr Rumaihi says.

“I’m going to say, do you need your 200 legal team in Dubai or in Abu Dhabi? Look at the cost advantages of Bahrain.” Meanwhile, Hisham Al Rayes, chief executive of GFH Financial Group, told Financial Times that the potential for oil revenues from the shale discovery in the spring could transform the outlook. “Asset valuations now form a great opportunity to invest,” he says. “Now is the opportunity — we are undertaking acquisitions here, in education, healthcare, commercial property and housing.”

Along with this, Bahrain is also seeking to reinforce its role in financial technology innovation. According to the report, which quotes board member Maissan Almaskati, who is also chairman of FinTech Consortium Bahrain, a partnership between the EDB and FinTech Consortium, a global incubator, the hub has attracted 30 companies since its launch in February, with a target of 50-60.

“There is nothing else like it on an onshore basis within the GCC,” he asserts. Bahrain has been approached by a payment processing start-up in a competing Gulf country that had required it to sell a major stake to a regulated firm before handling money, according to Mr Almaskati. “What start-up would do that when you are just getting started?” he says, without naming the company