Of all the Gulf countries, the UAE is increasingly emerging as a crucial investor in Bahrain’s economy, and these are coming from public and private sources alike. While return on investments are for mutual benefits, the Bahraini side is benefiting the most as the schemes are taking place in Bahrain.
For instance, the UAE is a major player behind the ongoing expansion of Bahrain International Airport (BIA) at a cost of $1.1 billion. The Abu Dhabi Fund for Development has provided a massive $919 million needed for carrying out a key infrastructure scheme in Bahrain.
The project aims at increasing passenger throughput to 14 million per year to help meet demand, primarily from transits. The expansion is expected to be completed by 2020.
The development should help BIA regain its traditional position as a regional hub and a transit point for other airlines. Gulf Air, owned by the Bahrain government, is expected to be the primary beneficiary of the expanded airport once completed. The carrier could certainly use the facility to consolidate its operations in the region and beyond.
The UAE’s experiences show that airports can play a critical role in development of the economy. The Dubai International Airport helps the emirate realise its potential and the same could be true of Bahrain following the extraordinary expansion, with benefits reaching sectors such as hospitality, transportation and events management.
In addition, ADFD provides funding for the development of housing schemes in Bahrain. Likewise, Saudi Arabia and Kuwait assist in housing schemes. Thanks partly to UAE, currently Bahrain is experiencing the largest ever development of housing, in turn provided for the needs of locals.
And there is the Marassi Al Bahrain project not far from the airport in Bahrain. The Abu Dhabi-based developer Eagle Hills is a major investor in the upscale property scheme, which involves serviced and private apartments, hotels and a shopping mall.
Eagle Hills owns 60 per cent of Marassi Al Bahrain, and the rest is with Diyar Al Muharraq, a venture belonging to the Bahraini operations of Kuwait Finance House and other investors.
Eagle Hills projects its investment in Marrasi Al Bahrain to amount to $3 billion, a sizeable amount for an economy with a gross domestic product of $33 billion. The scheme should immensely benefit the Bahrain GDP.
Still, investments by private investors from the UAE cannot be overlooked. The City Centre Bahrain, an investment by Majid Al Futtaim Group, remains the largest shopping mall in the country. It features some 350 outlets together with two leading hotel brands, in a repeat of the City Centre Deira format.
City Centre Bahrain will be facing a new competitor later this year when Avenues Mall opens its doors along the King Faisal Corniche in the heart of Manama. The $93 million project belongs to the King Faisal Corniche Development Company, a venture involving Bahraini investors in partnership of M.H. Alshaya and Mabanee Corporation of Kuwait.
The funding options provided by ADFD is part of $2.5 billion grant the UAE agreed to extend to Bahrain in 2011 over a 10-year period following the emergence of socioeconomic challenges in the country. Much to Bahrain’s advantage, it is widely acknowledged that the UAE’s investments go far above and beyond the GCC financial aid package.
Undoubtedly, the UAE is replicating its own growth model in Bahrain ... especially via investments in key infrastructure projects.
The writer is a Member of Parliament in Bahrain.