Speaking at a seminar hosted by the EDB and the Centre for Research at Bahrain Institute for Banking and Finance (BIBF) Dr. Kotilaine explained that over the last ten years, much of Bahrain’s growth can be attributed to the rapid expansion of financial services, retail and services, construction and real estate. He said that while these sectors will remain pivotal in contributing to the economy’s growth, there will be a shift of dependency to the tradable sector, specifically knowledge-based services and high value-added manufacturing.
Quoting the examples of the post-war economies of Japan and Asia, which are now termed ‘tiger economies’ he said that sustained investment is the key driver of growth.
He highlighted Bahrain’s competitive advantage of a young population and stressed that investments in human capital will be critical for the sustained expansion of the non-oil economy. In this area, Bahrain can build on an established track record of educational reform and liberalization. He said that capitalization on this potential can only be made possible by Ensuring access to capital through developed capital markets and a benign investment climate
“What is important is not just the level of economic growth in a given year but a development pattern that ensures sustainable and inclusive growth. The quality of economic growth is above all measured by its ability to provide Bahrainis with greater well-being and opportunities – now and in the future.” — Dr. Jarmo Kotilaine (speaking at the event)
In 2012, Bahrain witnessed a GDP growth of 3.4 percent, with non-oil growth reaching 6.7 percent, including growth of more than 9 percent in manufacturing and 3.5 percent in financial services. Estimated overall growth in 2013 is expected to exceed 5 percent on the back of a rebound in oil production and ongoing expansion in the non-oil sector.