Interview with Ambassador of Kingdom of Bahrain to United States with international website "The Banker"
Bahrain has recorded nearly 20 thousand cases of coronavirus so far with just over 15 deaths, and we are in the middle of June 2020, Can you determine the main economic impact of the virus on Bahrain in the years 2020 and 2021?
Ambassador: Let me start by saying that Covid-19 has tested the resilience of governments around the world, as well as the results, the patience of societies, and their cooperation with their governments. We have now seen that countries and governments have a different approach to fighting the virus, and a unique set of changes in each country. But at the same time, there are many common practices. It is very beautiful to see the international community unite to address this pandemic. For me, the question is: After seven months in a row, how will balance be found between economic prosperity and mortality? In Bahrain, since we registered or, in fact, before registering the first positive case of the Coronavirus, the Kingdom formed a working group led by His Highness the Crown Prince, and that was in February, two weeks before the first case. And I think we have sent a message that Bahrain dealt with Covid-19 seriously and transparently. We continued to hold press conferences and publish updates on the number of cases and public awareness, and His Majesty the King ordered the coverage of HIV-related health care costs for all citizens and residents, including expats. I would like to point out that the recovery rate in Bahrain reaches 71% today and the death rate is 0.25%. These numbers reflect proactive government actions that seek to find a cure for the virus, spread awareness-raising campaigns, and procedures for examining suspected cases. Very early on, we started deploying mobile screening units nationwide, and this made Bahrain one of the pioneers of screening for every million people, since the early days of the epidemic, where today it reaches 146 thousand per million people. We also seek to use innovative methods to develop our health care system and to accommodate the growing numbers. In fact, we have devoted medical facilities to meet the health services required to treat Covid-19 cases, in order to continue providing medical treatment services to all patients, and to ensure that the health care system continues to receive patients without Covid-19. And I think that these measures have created a state of flexibility inside Bahrain, and this matter is a source of gratitude for us. We are watching the numbers now, and as I said, we are trying to create a balance between protecting the economy on one hand and making sure the death rates decrease as possible.
There was an opinion poll saying that Bahraini companies will face difficulties in the next six months if the virus continues to spread, and companies in other countries have ended their commercial operations, what is the government doing to support businesses that will be affected during the next six months?
Ambassador: The main financial response to Bahrain, related to Covid-19, was a financial and development package, launched with the directives of His Majesty the King, with a value of 4.3 billion Bahraini dinars, it contains decisions and measures to support citizens and the private sector and continue to achieve goals for developments under the exceptional circumstances the Kingdom and the world is facing to address the threat of Corona, now we look forward to more support services. The Central Bank of Bahrain has expanded borrowing facilities and stopped paying loan installments for a specified period, and the government has borne the cost of electricity and water bills for all individuals and companies. They are also exempt from municipal fees and fees for leasing industrial lands. Moreover, the Labor Market Regulatory Authority suspended monthly work fees and fees for the issuance and renewal of work permits. Tamkeen, a semi-autonomous government agency, provided loans and assistance to companies, in support of the affected companies. Bahrain also launched a financial aid service for those affected financially by the epidemic, and launched a portal to connect job seekers and private sector institutions and companies, and to assist employees, especially expatriate workers, by providing them with alternative housing as shelter, which helped reduce the density in their homes and thus helped all proactive methods in one way or another to protect our economy.
Bahrain has taken proactive steps to provide support measures to banks and companies. In May, Bahrain went to the Eurobond market again to obtain financing. Do you think that there are future procedures for resorting to the market again this year?
Ambassador: Financial stability in Bahrain is necessary to maintain regional stability. The International Monetary Fund has predicted the recovery of the economies of the GCC countries next year after a possible economic downturn due to Covid-19. It is expected that Bahrain will record 3% real GDP growth in 2021, and the economy of the neighboring countries will also recover, so we hope to see the region as a whole in a better position in the future. Bahrain and neighboring countries have reduced government spending by 30% to help overcome the crisis, and will also reschedule some construction and consulting projects to not exceed the expense budget for 2020 and make room for other spending needs. Basically, we are looking for better next year.
There are already many physical mergers in the past few years in Bahrain before the Covid-19 crisis, how do you see efforts to protect public finances in 2020-2021?
The Ambassador: As you know, the Bahraini Ministry of Finance has introduced a financial balance program that affected all government agencies, and we have witnessed a partnership between the public and private sectors, reducing government spending and providing the best available technologies as a prime example of how Bahrain is protecting its budget, so the reassuring news goes back to April 2018 when There was a discovery of marine oil for the first time since 1932, and we also call it "the discovery of the Gulf of Bahrain basin."
We are talking about 18 billion barrels of oil and 10 to 20 trillion cubic feet of gas estimated at an area of 2000 square kilometers. We divided the marine field into four sections. One of them is for development and the three divisions are still available. Halliburton has started drilling the first well and we hope to see production from it during the next five years. We try to make sure that our economy is able to withstand the next four or five years, five years until we get the expected results.
Financial technology has been considered a major initiative in the Bahraini financial sector and corporate strategy in Bahrain in the past years focused on the Gulf of Financial Technology. What is the impact of the Corona virus on this financial technology strategy, and will Bahrain witness an increased dependence on financial technology?
Ambassador: If we talk about financial technology as a whole, and looking at Bahrain's position in it, we find it plays a major role in Bahrain's initiative to attract innovation. When we look at the financial technology companies in Bahrain that used to adapt to a world that is tangible or paperless and more digitally familiar with the work than traditional industries, for example STC Bahrain Fintech Social, which the company benefits from its experiences in communications by providing the latest radio collaborative tools at King Hamad Hospital University to enable tele-consultations in an attempt to reduce visits to hospitals. This industry has always shown an important role in reducing social divergence by facilitating cargo transportation, connecting students to virtual classes and maintaining business operations, as the digital infrastructure in Bahrain has served the country well. Therefore, this industry has always played its important role in the economy by maintaining most of the commercial operations through virtual offices, but it can play a bigger role during the economic recovery through contacting companies worldwide and expanding business opportunities outside Bahrain. Bahrain has always sought an innovative approach, and we have always looked at financial services as a key sector and not only to serve Bahrain but the region as well. You may remember that Bahrain organized a very important conference, the importance of it was not limited to Bahrain but to the region. The Gulf Gate conference was a way to connect investors not only to Bahrain but also to the main markets in the region. Bahrain has always been proud of its financial institutions and we have made this transition to financial services and technology and we will continue to do our utmost to maintain the Kingdom as a major player in the financial technology industries in the region. Covid-19 has affected and will affect people, certain industries and social behavior as well. When it comes to financial technology, the virus has forced many people to use financial technologies. Now, many have had to use media platforms that they thought they would never use, and so there will be a shift in behavior, which will lead to the use of optics technology. Covid-19 will have a direct and indirect impact on all of us. We will be witnessing a change in readiness and undoubtedly the most changing social behavior in the coming years.