Bahrain is in advanced talks for investment deals with cloud computing companies from the United States, China and the United Arab Emirates, an Economic Development Board executive said, as the country seeks to diversify its oil-based economy.
Cloud computing and foreign direct investment are key planks of Bahrain’s economic recovery program that aims to grow non-oil gross domestic product by five percent this year and includes $30 billion in strategic projects.
The plans come as regional economic heavyweights Saudi Arabia and the UAE are also banking on technology to diversify their oil-dependent economies.
Saudi Aramco Development Co, a subsidiary of oil behemoth Aramco, has teamed up with Google Cloud to offer cloud services to customers in Saudi Arabia.
The UAE is opening three Amazon Web Services (AWS) centers this year.
Bahrain, which since 2018 has hosted a large AWS center - the first in the Middle East, has introduced a “data embassy law,” the first of its kind in the region.
It allows countries to store data in the country but under their jurisdiction, Ali AlMudaifa, chief investment officer of Bahrain’s Economic Development Board, told Reuters.
EDB is also in talks for a sugar refinery, management consultancy and UK insurance firms to set up shop in the small kingdom. It is also in talks for FDI deals with Israel, which are expected to be announced “soon,” he said.
Bahrain aims to achieve fiscal balance by 2024, a target delayed by two years due to the pandemic.
The medium-term fiscal plan is tied to a 2018 $10 billion aid package from Kuwait, Saudi Arabia and the UAE that helped it avert a credit crunch.
“We’re willing to compete for big projects,” AlMudaifa said. “We think our value proposition stands on its own two feet, and we are also looking for synergistic opportunities between the countries.”
“We have very strong momentum and traction, a very diversified pipeline,” he said.
The recovery program includes plans for the tourism, logistics, industrial, telecom and oil and gas sectors.
EDB alone aims to attract $1 billion in FDI and create around 4,500 jobs this year after drawing $893 million in 2021 and creating 4,861 jobs.
Saudi Arabia, the UAE and Kuwait comprise roughly half of Bahrain’s aggregate FDI stock, AlMudaifa said, adding he expected Gulf FDI to Bahrain to increase further. Saudi Arabia’s powerful Public Investment Fund has said it would invest $5 billion in Bahrain.
“A lot of these big strategic development projects, in due time and incrementally and gradually, will be open for private sector investment,” AlMudaifa said.