This article on Indo Bahrain techno-economic growth through smart and secured governance concept by the eminent author Dr. P Sekhar, Hon. Abdulrahman Mohammed Juma, Chairman Bahrain India Society, and CA. P.S, Balasubramanyam, Vice Chairman BIS who has critically analyzed the present facts and ways to expand the business and cultural ties between the two countries to get prosperity to the people. Further, the article highlights ways to fully take care of this through Secured Governance for getting funds from international sources for large Infrastructure projects like Smart City development for all-round growth. India could bring Innovators and startups to expand to ME and US markets taking advantage of the beneficial unique Trade agreements offered by Bahrain for business expansion.
India and Bahrain enjoy excellent bilateral relations characterized by cordial political, economic, and cultural contacts. Our bilateral trade and commercial exchanges go back to about 5,000 years ago tracing their origins to the period of Dilmun Civilization in Bahrain to the era of Indus valley civilization in India.
Ancient Bahraini traders are believed to have carried out flourishing trade of Bahraini pearls with Indian spices from India. The presence of around 326,658 (323,292 NRIs & 3,366 PIOs) Indian nationals who comprise a third of Bahrain’s total population of 1.8 million is an important anchor of our bilateral relations with Bahrain.
History of Indo – Bahrain Relation
Relations between India and Bahrain go back generations, with many of Bahrain’s most prominent figures having close ties with India, and many have studied and learned their basics in India and are proud of this.
Trade and Economic Relations
India and Bahrain have had economic and trade relations for several centuries; these relations received fresh impetus from the oil boom of the early seventies. India has traditionally enjoyed a very strong trade relationship with Bahrain. Indian firms have long used the island Kingdom as a gateway to western markets. Relative prosperity and higher standard of living in Bahrain boosted global imports of goods and services, including from India. Bahrain’s Government’s policy of industrial diversification also played an important role in enhancing economic cooperation between India and Bahrain. More than anything else, new job opportunities attracted a large number of Indian expatriates to Bahrain. Bahrain serves as the gateway to the GCC market because of its location.
Sectors like healthcare are seeing increased activity from Indian firms. The GCC’s proximity to the subcontinent, its world-class logistics infrastructure, and the fact it is home to some of the largest logistics operators make it an easy win for Indian exporters. As well as excellent access to GCC markets, logistics and transport businesses in Bahrain enjoy duty-free trade through Bahrain’s numerous FTAs, including the first-ever US FTA with a GCC member. Bahrain also has the region’s best-value operating costs, up to 45% more cost-effective than the rest of the region.
India’s main items of exports to Bahrain are mineral fuels, mineral oils, inorganic chemicals, organic or inorganic compounds of precious metals of rare earth, Elam/radii/isotopes, cereals, nuts, fruits, articles of apparel and clothing accessories, etc., while main items of import from Bahrain are crude oils, mineral fuels, their bituminous substance, distillation, aluminum, fertilizers, ores/slags/ ashes of aluminum, iron, and copper, pulp, salt, printed books, newspapers, etc.
[Note: * Data April to October]
While Bahrain is a small country both geographically (765 sq. km.) and in terms of population (1.8 million), it has been a favorite destination for Indian nationals working as expatriates. While there were only 90,000 Indian nationals working in Bahrain in the year 2000, the number has since increased to 3,27 Lakhs (approximately) – comprising of 200,000 from Kerala, 50,000 from Tamil Nadu, 40,000 from Andhra Pradesh & Telangana, 25,000 from Karnataka, and the rest from Punjab, Rajasthan, UP, Maharashtra, Goa, and Gujarat. In terms of professions, the vast majority i.e. 70% of our nationals are in the category of unskilled labor. In addition to the predominant blue-collar labor force, there is a sizeable number of doctors, engineers, chartered accountants, bankers, managers, and other professionals who play a vital role in Bahrain’s socio-economic development.
The Indian expatriate community enjoys great goodwill from the Bahraini authorities and employers alike. It is no secret that Indians are preferred over other expatriates from the subcontinent. The main reasons for this include the trust factor, strong work ethics, and the “apolitical” orientation of Indian expatriates.
Bahrain launched the ‘Little India in Bahrain’ project in November 2015 to acknowledge and mark the contribution of the Indian community to the history and progress of Bahrain. Under the project, the exterior of various buildings was restored and renovated, as well as a small public space for holding regular markets, fashion shows, Indian food stalls, and cultural performances, etc. was created so as to give the visitors a feeling of being in India.
Indian investment in Bahrain
There are 23 branches of prominent Indian banks/companies registered in Bahrain and 3,181 Indian joint venture companies are registered in Bahrain. India’s total capital investment into Bahrain between January 2003 & March 2018 has been estimated at approximately US$1.69 billion. Financial Services has the highest investment value (40% of total projects), followed by the real estate and hospitality sector.
The gateway to the Middle East’s US$3.7 trillion markets. Bahrain and India share long-standing ties spanning 5000 years, with bilateral trade value standing at US$1,075.74 million. Hundreds of thousands of Indian ex-pats call Bahrain home, benefitting from a liberal culture that accommodates all religions and cultures. Bahrain’s location, in the heart of the Gulf, is ideal for Indian scale-ups looking to access the US$1.5 trillion market.
Bahrain’s Investcorp sees India’s digital economy unlocking $1trillion valuation by 2025 Ubiquitous digital consumption, continued business model innovation by Indian entrepreneurs, and the growing public market appetite is seen as the factors driving the transformation of India’s digital economy and opportunity for investors, including from the Middle East. Investcorp, the Bahrain-based global alternative investment major, has predicted India to be the world’s fastest-growing digital economy, estimated to reach a $1 trillion valuation by 2025 from US$250 billion last year, fuelled by the country’s demographic advantage and rising incomes. The bullish outlook by Investcorp has the potential for a significant uptick in investments by Middle East-based sovereign and private equity funds into several new-age sectors of the South Asian country in the near-to-mid-term.
“As young consumers in the country begin transacting, their first port of consumption is likely to be online. This rapidly evolving demographic is well placed to propel India into the fastest growing digital economy, and also account for over 25% of the country’s overall GDP (gross domestic product) by 2025.”Investcorp, which has a total of US$37.6 billion assets under management globally, has also predicted the unicorn opportunity in India to grow to over 150 over the next five years. Strong digital infrastructure, continued business innovation, and increasing investor appetite are cited as the reasons by Investcorp for its assessment of the expected big rise in India’s unicorn graph.
“The global pandemic and the subsequent lockdown accelerated digitization in India. Investors will continue to realize the opportunity in India over the next five years, stated Investcorp India, who has been leading the Bahrain-based investment firm’s move to significantly step up its interests in consumer tech, healthcare, financial services, retail, e-commerce, and technology sectors in India in recent years.
Sustainability and climate-related considerations in government support programs. In the past decade, governments, international organizations, and private institutions in many countries have advanced efforts to implement climate policies to help improve sustainability reporting and catalyze a low-carbon transition. A few jurisdictions have taken steps to integrate sustainability or climate-related considerations into financial support programs, yet this is more prevalent in government economic recovery plans. In facilitating the assessment of sustainability and climate-related risks and opportunities, the latest research suggests that insufficient data, financially material metrics, and analytical tools to measure sustainability remains a critical constraint, not only for corporates but also for financial institutions and the financial market regulators.
Overall, the COVID-19 Government Financing Support Programmes for Businesseshighlights that the array of financing support programs helped distressed firms to meet their immediate financial commitments and avoid widespread defaults. However, given the potential for unintended consequences – most notably the rise of job loss, barriers of economic growth, and trade uncertainty- to undermine the recovery phase, the Committee on Financial Markets should give greater attention to how COVID-19 programs have affected market financing and leverage, and what implications this may have for current exit strategies.
Secured Governance Strategy
Through a public-private partnership, an area of wasteland needs to be developed into a ‘smart city’ in India and Bahrain. The project of smart city development brings together a broad range of public and private partners in a long-term experiment in using infrastructure which is sustainable, nomadic, and can be disassembled. It is an innovative approach to regenerating unused land for innovative, foreign investors and creative infrastructure developers.
Wasteland needs to be transformed into a sustainable smart city for the creative economy, for green and innovative development. It will become a prominent creative hotspot, an area for innovative entrepreneurs and foreign investors to develop the new city.
Due to lack of irrigation, or unfavorable climate, some lands are not cultivated and are categorized as either culturable or uncultured wastelands. Culturable wastelands include gullied and/or ravenous land, undulating upland, surface waterlogged land and marsh, salt-affected land, shifting cultivation area, degraded forest area, degraded non-forest plantation, sandy area, mining, and industrial wasteland, and pasture and grazing lands. Compared to this, unculturable wastelands include barren, rocky, stony wastes, sheetrock areas, steep sloping areas, and snow-covered and/or glacial areas.
People-friendly action program helps local people and organizations in rehabilitating and improving the degraded lands. “Turning wasteland into a successful ‘Smart city’” the wasteland in India which has been abandoned is being transformed into a Smart City for sustainable economic growth. The main objective of the secured governance concept is to develop a deprived land area into a dynamic creative zone, where knowledge, innovation, culture, and creativity meet and mutually reinforce.
The Blue Economy concept is a tool to implement Smart City development in the Islands for the economic growth of the nation. These new smart cities will be constructed around the work-live-play lifestyle in a vibrant environment with technology and the cities aspire to be clean and green while some want to leverage heritage and other unique features.
These smart city projects would require huge capital investment initiatives that could be brought about by public-private partnerships for developing sustainable smart cities. These islands represent an opportunity to boost the local economy and create huge employment opportunities in knowledge-intensive economic sectors. The development of smart cities in the Indian Islands could be a plethora of investment opportunities and assist to meet the financial obligations of the nation.
The main objective of Bahrain India cooperation would be the great scope for business and cultural relations to grow and bring greater prosperity to the people as there is goodwill generated by the existing Overseas Indians with full support from the people and Government of Bahrain. India is expanding in all spheres with startups, Innovators on top in the Global ranking, and looking for expansion avenues. With good support and incentives including the FTAs in place, these entrepreneurs would find it good to have a base to take up the US and ME markets with proper support from Associations like the Bahrain India Society. These with Secured Governance for long-term sustenance there is scope for investments from Bahrain to participate with Indians there to develop dynamic Smart cities as creative zones, where knowledge, innovation, culture, and creativity meet and mutually reinforce. Other objectives include further developing as a green city and stimulating the local business climate. Through Secured Governance even this notional debt can be taken off by having a range of long-term large value development projects taking Smart Cities to Village level, development of wastelands, all Islands, etc. Bahrain could proudly participate in these Multiple Trillion $ projects in Indiaby investing some Funds which could give good returns to take care of the existing and future inflow giving a green economy in the system for perpetual growth.
Dr. P. Sekhar, Chairman,
Unleashing India Global Smart City Panel & MTGF
Mr. ABDULRAHMAN MOHAMMED JUMA, Chairman,
Bahrain India Society
CA. P S Balasubramanyam, ViceChairman,
Bahrain India Society