Bahrain and the UK sign a strategic investment agreement
Bahrain and the UK have signed a memorandum of understanding for strategic investment. As part of this, the Bahraini government plans to invest £1.3 billion to develop the UK economy. Investments will go through several organisations, including Welfare Fund, GFH, and Osool Asset. Representatives of the countries intend to further strengthen cooperation by expanding interconnections in various sectors of the economy. At the same time, the parties did not disclose the terms of the agreement and in which market sector investments will go.
Bahrain Economic Overview
Bahrain is an island state in the Persian Gulf. The form of government is a monarchy, with the king as head of state and the prime minister controlling the government. For a long time, the main sector of the local economy was the extraction and sale of pearls. It remains one of the most important sectors today. After the discovery of oil in 1932, the extraction and export of pearls became a major source of budget revenue. For a while, it accounted for around 60 percent of GDP. Now the share has fallen to 30 percent. The reason for the decline in oil production is the depletion of oil fields in Bahrain. At the same time, there is also an ongoing search for new deposits.To reduce the economy’s dependence on oil, the local government is implementing various programmes to diversify income by investing in other market sectors. The country also invests capital in the economies of various countries through sovereign wealth funds. In addition to the UK, Bahraini representatives met with their Chinese counterparts in 2022. During the talks, the parties expressed their mutual desire to work together, with medicine and healthcare as priority areas.
Over the past 20 years, the Bahraini authorities have been actively developing the local market to reduce its dependence on the export of fossil fuels. As a result, the country has become an attractive destination for foreign investment in tourism, banking and finance. Offshore banking is one of Bahrain’s advantages for wealthy individuals from other countries.
The benefits of investing in the UK
Ernst & Young has analysed the UK economy. According to the report, the country came first in the ranking of countries with the best investment conditions. The main factors contributing to the attractiveness of the local economy were:
– transparency of business operations;
– the existence of favourable conditions for doing business;
– technological base;
– availability of qualified personnel.
The most promising areas for investment, according to respondents, are financial services, industrials and consumer goods. Despite global challenges, foreign investors are not losing interest in the UK. Investment in R&D projects and the IT sector, including data analytics and cloud computing, is particularly popular. In addition, the country’s manufacturing and consumer sectors are actively developing.