Bahrain rated GCC’s ‘most open economy’, according to KPMG

Bahrain has been rated the most open economy in the GCC following its successful efforts to diversify away from oil and gas, in a recent report by accountants KPMG. The research which surveyed 1,500 executives across 22 countries in Europe and the MENA region, dubbed the Kingdom the most “financially forward thinking” of the Gulf states, despite being the least hydrocarbons-rich of its neighbors.

The report noted that the Kingdom has strived over the past several decades to diversify its economy away from the extraction of natural resources and towards a more sustainable model of development based on manufacturing and the provision of services, especially finance, as it realized that it cannot rely on oil and gas exports to ensure its continuing prosperity. In doing so, the Kingdom has earned a reputation for being a regional trailblazer and built the GCC’s most open economy.

KPMG also noted that Bahrain’s long term economic growth would not be affected by the political unrest, which marred its reputation at the start of the year. It would, however, need to introduce some reforms and review its economic strategy to ensure a successful economic recovery.

The report indicated that while the unrest has had a negative impact on short-term growth, the fundamentals upon which the country’s economy is based remain unchanged. Going forward, government and regional investment are expected to have an immediate impact on Bahrain’s economic recovery. Further reforms, however, and a planned revision of the national economic strategy, would be crucial to the Kingdom’s long-term growth and prosperity.

The article above has been published as a part of Bank Audi`s MENA Weekly Monitor for Week 32 of 2011. It can be accessed via Internet at the following web address : http://www.banqueaudi.com