Wednesday, January 20, 2021

Interview - Dr Esam Abdulla Fakhro (National Bank of Bahrain)

Opportunities for Indian construction firms in Bahrain are huge. The door is wide open all the time.

DR ESAM ABDULLA FAKHRO, Deputy Chairman of the National Bank of Bahrain, Chairman, Bahrain Chamber of Commerce & Industry and the Chairman of Abdulla Yousif  Fakhro & Sons Company, dilated on the prospects of bilateral construction sector engagement in an interview with SHRIKANT RAO.


How would you characterise the current level of Bahrain-India trade engagement – and what are the pluses of this visit?


The engagement between Bahrain and India so far has been extremely interesting and productive and there are immense possibilities on which we have to build. The Bahrain-India forum in Delhi has been well received by Indian companies and   investors. However many of them tend to unaware of the main highlights of our economy and also the advantages or incentives of doing business in Bahrain, and by extension service the entire GCC region. We have an open, liberalised business milieu and are looking to diversify into a very robust economy with the help of a skilled labour force. It is through forums such as these that we have been able to highlight the many features of our economy like no tax, no repatriation on funds. That is making them listen. I was very recently in Bangalore with the Minister of Transportation for the CII Partnership Summit. There, again Bahrain was in focus. We shed light on the attractive features of the Bahrain economy the fact that India is an important trading and investment partner, not just for Bahrain but for the entire Gulf and the six member states.  Also, as we know, India is one of the top 5 largest economies in the world so that makes it a win-win relationship between Bahrain and India.  Bahrain has concluded many trade and economic agreements with more than 50 countries in the world.  It has signed FTA with the US which should provide a comfortable environment for prospective Indian investors to come and set up base and be able to service the MENA region from Bahrain. Our signing of the FTA agreement with the US confers on access. What you manufacture, you add to it 55 per cent value in Bahrain. It is considered as a Bahraini commodity, that can enter the US and you can receive 5 per cent reduction in import duty. That in itself is a major advantage. .



What is the feedback you have received from New Delhi – and before that, out of Bangalore?


I must say it is very positive. Remember that we have an office for economic development, both in Bangalore and Delhi.  There has always been continued interest, now more so. Through our delegation visits we do make some impact, and there are positive results, but it takes time for things to materialise.  I am sure though, as we move forward, we will see more Indians doing business in Bahrain.  The policy now of the Gulf itself is to go eastwards, specifically towards India, China and SE Asia because these are the countries and region where we have synergies. We see growth there and in India and can utilise your know-how in various sectors to build on our own knowledge in various areas.


Tell us about the important construction projects in Bahrain in which there are opportunities for Indian companies?  Which are the zones in which Indian players are currently engaged and new areas of activity in which they can further contribute? 


Construction projects in Bahrain are an ongoing affair. The Bahrain government puts around 22 per cent of its budget into infrastructural and developmental projects. So we’re talking about construction, road works, housing, distribution of power, ports. There are plenty of opportunities for an investor or a construction company. Indians in the past have been in active partnership with Bahrain in housing, high-rise buildings and also in infrastructural works, power and airports. Opportunities for doing business in construction for Indian firms, quite frankly, are very huge, and the door is wide open all the time. Let me assure you that we now have a tender board where the conduct is completely transparent. There is corporate governance, there is rule of law and because of the business conditions many foreign firms find it very attractive to look into Bahrain for future prospects. Indians can play a major part in the development of SMEs. Indian firms can do well in healthcare and education – areas which we have privatised, and there are also great prospects in downstream manufacturing, specifically for chemicals or aluminum, development of airports and power projects.


What are the specific areas where you are seeking Indian expertise?


The Indian economy generally is service oriented.  Indians have done very well for themselves in IT software.  I think we stand to gain a lot from them if they decide to make additional investments in Bahrain to service the region.  As a concept, global trade and investment, over the years, since after the Second World War has been showing an average growth of no less than 3.5 to 5 per cent of the global total.  This means as we move forward, more and more of the multinationals will be looking forward to setting up bases in different regions…We have worked to becoming a free economy by being investor friendly, by having low tax, skilled workforce to be able to attract part of that interest into Bahrain to service our region. The Gulf region is going to be very busy for a very long time, and so the opportunities are immense.


Tell us about the areas in India where Bahraini firms are keen to invest? The Indian government has undertaken projects like development of Industrial Corridors and Smart Cities.  Do you see Bahrain playing a very important role there?


Most definitely! I am sure Bahraini contractors too are beginning to look at India with growing interest. As far as investments are concerned we would certainly look at real estate. I heard through delegation visits that India is undergoing a huge program of infrastructural development and that it need more and more capable contractors to come and work here.  The door is wide open and this has been discussed between the business delegations here and our officials. I think there is a shortage for that kind of work, so we’d be very willing to look in those areas you mention.


What are your expectations of the Indian government and what are the irritants you expect to be removed?


The Indian government has always been, and will always be, as far as we are concerned an honorable government. Our relations with India stand for a very long time. In fact, during this visit New Delhi has underlined its commitment to the security and stability of the Kingdom of Bahrain and the Gulf region. That in itself should give a lot more support to Bahrain, and will definitely further strengthen the existing ties between India and Bahrain. You have to bear in mind we have a huge Indian community which constitutes, no less than 50 per cent of the total workforce. That in itself is an indication as to what our relations are like. On top of this, delegations are constantly traveling back and forth and that, in my view, is a sign of very healthy engagement.


Going forward, give us an understanding of the agenda of the Bahrain Chamber of Commerce and Industry to increase business interaction between the two countries?


We will continue to organise delegation visits to India and also look into specific inquiries arising from the Indian side.  And we will continue to be focused on the welfare of an Indian company that sets up base in Bahrain.  The Bahrain Chamber of Commerce and Industry has many sectoral committees and these companies are most welcome to take up membership – it doesn’t cost a lot of money.  You can make sure that whatever problems they come across, comes to our knowledge and we take it to the officials concerned and have them addressed. So there is a lot to be gained for any Indian firm setting up base there to come to the chamber and seek any assistance whatsoever.

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