Marketplace Middle East - Blog
8/28/08
New Generation, New Challenges


(Manama) First impressions mean a great deal. Mine go back three years in Bahrain at an Arab Business Council meeting. The voice seemed nearly out of place, a mid-Atlantic accent emerged from a crowd of executives and government officials as the American-educated crown prince of the kingdom swept the room.

A big smile and warm greeting clearly mask the undertaking within the court of the crown prince to complete an economic and political reform process.

The intense heat of August is nearly enough to keep movement to a bare minimum, but we made our best efforts to see, what some in government like to describe as the Ireland of the Middle East, is up to nearly four decades after independence.

In an exclusive interview in his office, it is abundantly clear Crown Prince Sheikh Salman bin Hamad al-Khalifa is determined to protect and even enhance the role for Bahrain as a regional financial and services hub. He has accelerated, for example, a process to train workers to stave off intense competition from Dubai, Qatar, Abu Dhabi and neighboring Saudi Arabia.

“If we don't capitalize on diversifying away from oil, the real estate and brand new buildings, stunning architecturally, are not going to solve anything unless there are good people inside of them.”

His Highness is using his chairmanship of the Economic Development Board to consolidate the reform process. After three days of protests last December from the majority Shia population, he sent a letter to his father King Hamad Bin Isa Al-Khalifa, signaling that there was too much resistance to change.

“Change is a constant, change is here, change is never easy but I think it must be tackled with the right ambition. It must be tackled with the right energy as well to achieve success,” said the crown prince, “His (the king’s) reform agenda was not clearly understood by some elements and by him speaking directly to people not just in the government, but also to others in the community, I think it helped to set the record straight.”

One could easily read into that effort a high-stakes move to consolidate authority and renew a mandate to push through privitizations and labor reforms – both sensitive issues to those in government and the private sector who have resisted the change he talked about and who benefited from market protection.

Some of those same elements of society have also not fully embraced the need to spread the wealth during this time of $100 oil. The crown prince sees it quite differently, “Making sure that poverty or relative poverty, this is a very important term, is addressed here in the kingdom and distribution of wealth is managed in a more actionable manner is something that I am very focused on.”
It is a delicate balancing act, something the kingdom of Bahrain is accustomed to. Bahrain remains home to the U.S. military’s Fifth Fleet. Once a new port facility is built, the fleet will be able to spread its wings and have the existing facility to itself. The relationship with Washington goes back decades and partially explains the kingdom’s loyalty to the U.S. dollar, despite its 35 percent correction in the last few years.

“Being linked and pegged to the dollar, of which I am a strong proponent, removes any uncertainty in our revenue collection. Secondly, it facilitates regional trade because five of the six member states are pegged to the dollar,” and the crown prince finished on the diplomatic point, “Thirdly, it is something that we have taken a long view to, since 1980, so you don't quit when the going gets tough and benefit with the good times.”

Those five members of the Gulf Cooperation Council are aiming to launch their own dollar-pegged single currency in the next few years. It is a sign that members of the oil-rich group want to control their own destiny. We are witnessing that as well in the Middle East peace process with both Saudi Arabia and Qatar actively involved in talks to push that process forward.

Meanwhile, Bahrain continues to straddle relations with Washington and Tehran. This effort has been made more challenging by some of the bellicose comments coming from Iran. When asked what he thinks Iran’s intentions are when it said it can block the Straits of Hormuz, a major shipping line, the crown prince steered towards greater collective dialogue, “Only Iran knows what Iran intends with those kinds of comments. But what we certainly call for is an increased dialogue, understanding and tolerance. I hope that cooler heads will prevail and that peace and dialogue are the victors.”
That is certainly something that everyone can sign onto.

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Bravo to His Highness and Deputy to His Majesty, Shaikh Salman and to the people of Bahrain. It's a pleasure and a breath of fresh air to hear a leader speak from a constructive, positive, and informative viewpoint. I wish him, the government and the people the very best in their quest for a successful and fruitful reform.
Thank you for your coverage of Kingdom of Bahrain,i am a Bahraini and proud of what our little Kingdom has achieved in such a very short time.I have had the opportunity to work on the Reforms projects. My Generation has opened thier eyes and mind to the directions of both His Majesty the King and His Highness the Crown Prince and fully support them.
It is ture the change has happened and will continue to happen, and the private sector has to accept the fact that this is not going to go away and that the only way forward is through change and adoption of international practices and norms in order to be part of the Global community. We have to give some to get some for the benefit of the whole society.
This acceptance has taken root and we are witnessing changes both in the economy, private sector and the society.
good Luck to all.
His Highness the Crown Prince shows clearly the ability of having a vision and the beef to implement this vision. My whole professional live has been about change and helping corporations to change from the foreman to the chairman.
Therefore I applaud his Highness for his foresight in what his country needs for the future. I live in Bahrain and I asked myself what the Kingdom will offer the world, different than what the UAE and other GCC members are trying to offer.
His Highness is spot on; it is to improve people’s skills and qualities to be top professionals in their fields no matter where they work in an office or in the streets. This is where the Kingdom of Bahrain can ensure to differentiate its self from other GCC members.
People Management and people development is the key to success which is one of the topics I wrote in the past in one of my comments in the GMR magazine. The Kingdom of Bahrain can be the front runner in real development of its people and all of those who want to come to work and life in Bahrain.
Key issues here are of course education, development of career path and career opportunities. As well as the government to pressure local and international companies to clearly work on developing HR departments which will ensure that people receive the possibilities of developing themselves and receive opportunities for a career path. Developing your own people from within creates a tremendous amount of loyalty and will help the country and businesses to increase their profitability and the standard of living. Having qualified people will therefore obviously attract even more international companies to the Kingdom.
So again I applaud his Highness the Crown Prince for his foresight and wish him all the success and help he needs to implement change. This will take some 10 to 15 years; however the positive results will be extremely high and will be created along the way and can also be harvested along the way. This is not a quick fix and people and government must be aware of this and show patience.

Ramsi Hashash
Vision and Words are one thing but actually putting everything into practice is another. While I am sure that his HH the Crown Prince of Bahrain means well I think the only way he will ever achieve what he is voicing is to start in the correct place. I am an expat but my kids are Bahraini and yet I am planning on taking them to my country where they will enjoy the freedom of life that I was given, the freedom to express my opinion and have my politicians answer to me, I mean after all politicians and figure heads of the country are all elected by the people and for the people, well at least that is what true democracy is all about and we under the term of democracy have the right to challenge our piblic servant and I think the sooner the Crown Prince accepts that reform has to start with Bahrain's version of democracy and the sooner that he calls upon a reform in the legal system of Bahrain the sooner that Bahrain will become the country that he speaks off. On the face of things I think Bahrain is a great country but a country is a lot more than just glorious buildings. While the Crown Prince is able to show progress in the development of Bahrain he is not actually being honest about the foreign entities who have come into Bahrain and lost money because of the system, a system which could be perfected in many ways to make a country better for international business. For example, which country in the world takes 3 months to register a company, all the countries I know you can either register your company over the internet in 1 day or go directly into the office. I of all people would love to see the home land of my children advance to what it should be but with all that I have seen I can't possibly see this happening for many years to come. I have seen a foreign women get a jail sentence for a commercial transaction on property and all this for a property that she could not buy, I have seen the courts pass judgement in a manner based on the judge knowing the plaintiff and the plaintiff having a connection either with the public prosecution and the judges. I have seen foreign companies lose millions of dollars to the point that they have lost everything in their home countires because they invested money into project studies only to have the projects taken away from them and declared as the government of Bahrain's own projects. I have seen senior officials sit high and mighty in their chairs and blurt out words of sort such as I am a senior official in this country and you are nothing so get out of my office. While I applaud the Crown Prince for what good he has managed to do why not have him tackle the real issues of the country before big noting a country of which does not even come close to being a democratic country. I love Bahrain just as much as the local Bahraini would but it is definately not a place I would want my children to grow up in until such time that the crown prince of bahrain starts tackling issues that actually mean something to the lifestyle of which my children will grow up in.
ABOUT THIS BLOG
John Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
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