Loading ...NUSACC Roundtable Showcases Bahrain and its New Minister of Industry and Commerce
The National U.S. – Arab Chamber of Commerce (NUSACC), America’s top commercial gateway to the Middle East and North Africa (MENA), recently hosted a business roundtable featuring H.E. Abdulla Bin Adel Fakhro, Bahrain’s Minister of Industry and Commerce. More than 30 businesses participated in the discussion, which also included senior officials from the U.S. Government, the Government of Bahrain, and state governments from around the United States.
The roundtable was organized in partnership with the Embassy of the Kingdom of Bahrain and the Bahrain Chamber of Commerce & Industry (BCCI), a “sister chamber” of NUSACC. The gathering was hosted by the law firm of K&L Gates LLP and sponsored by Aluminium Bahrain (Alba), a world-leading aluminum smelter that exports to more than 270 clients around the world.
“Our Chamber was pleased to organize this very successful roundtable on the occasion of His Excellency’s first visit to the USA as minister,” said David Hamod, NUSACC’s President & CEO. “The United States and Bahrain are probably closer today than they have ever been, so Minister Fakhro’s remarks about strengthening the bilateral relationship were very insightful and timely.”
Foundations of the U.S. – Bahrain Partnership
Minister Fakhro provided an overview of Bahrain – U.S. relations, which started about 130 years ago when U.S.-based missionaries launched the American Mission Hospital, which continues today as one of the most important medical facilities in Bahrain.
The humanitarian relationship has been bolstered by the security relationship, he suggested. Bahrain was the first country in the Gulf Cooperation Council (GCC) to host a major U.S. military base on its territory (Fifth Fleet and Naval Forces Central Command.
In a long list of “firsts,” Bahrain was also the first country in the GCC – and one of only 18 nations in the world – to be accorded Major Non-NATO Ally (MNNA) status. MNNAs are eligible for research, development, and testing in partnership with the U.S. Department of Defense, as well as contracting to repair U.S. military equipment outside the United States.
Fast forward to 2004, when the two nations signed the U.S. – Bahrain Free Trade Agreement (FTA), the first of its kind in the Gulf region. In 2005, bilateral trade totaled $780 million, according to the U.S. Department of State. By last year, bilateral trade had grown about fourfold, to almost $3 billion. In 2023, U.S. goods exports to Bahrain surged to $1.7 billion, up 76 percent, and Bahrain’s exports to the USA have grown to $1.2 billion.
The FTA has produced impressive results, Minister Fakhro said, “but we have only scratched the surface when it comes to what we can do together and how companies on both sides can benefit from this agreement.”
The Evolving Partnership
“As time passes,” Minister Fakhro stated, “our two nations’ values and principles remain aligned, and get stronger. We remain deeply committed to this partnership.”
“About 20 years ago,” he said, “Bahrain’s economic landscape was very different than what it is today. Back then, about 40 percent of our GDP came from the oil & gas sector. Today, oil & gas is no longer the number one contributor to GDP.”
Bahrain’s economy is more diversified today, he noted. “Financial services has surpassed the oil & gas sector, contributing 17 percent to the country’s GDP. Oil & gas is now number two, which highlights how Bahrain has successfully diversified our economy away from our heavy dependence on traditional energy.”
He continued, “Increasingly, Bahrain is becoming a service-based economy. Financial services leads the way, but other service-based sectors are on the rise, too: Tourism, logistics, and information & communications technology (ICT), for example.”
“Manufacturing has always been important to Bahrain,” Minister Fakhro noted, “and the biggest manufacturer in the country is Alba (Aluminium Bahrain).” With a production capacity of more than 1.62 million metric tons per annum, Alba is a showcase of operational excellence, safety, environmental responsibility, and community development.
Minister Fakhro went on to say, “There are only about 800 factories in Bahrain, with room to grow. So, part of our new industrial strategy is to increase production, but also to attract new investment. We will do that through investment in technology that will streamline production, encourage sustainability, and increase productivity . . . ultimately increasing exports.” He cited renewable energy, the circular economy, and semiconductors as examples.
The United States is ideally suited to be a partner in these efforts, Minister Fakhro noted, which includes “improving our industrial supply chains by tying up with allies and countries who are friends of Bahrain, like the USA.” He cited the COVID pandemic, which severely challenged the supply chains of Bahrain and others. The take-away, he said, is to focus on manufacturing such vital staples as food and medicine, as well as supplying downstream aluminum products and petrochemicals.
Bahrain’s Value Propositions
In his remarks, Minister Fakhro highlighted some of Bahrain’s value propositions:
Human Capital – “In the region, Bahrain probably has one of the strongest human capital elements. Our employees are well-educated and very tech savvy, especially for tech jobs.”
Cost of Doing Business – “Our cost of doing business is significantly lower than in the rest of the region, sometimes up to 30 percent lower in cost, especially in the major cities.”
Free Trade Agreements – “Bahrain has access to global markets. Starting with the United States, Bahrain has an additional 22 Free Trade Agreements with countries around the world.”
In September 2023, Bahrain and the USA signed the Comprehensive Security Integration and Prosperity Agreement. “This is the first agreement of its kind,” Minister Fakhro said, “and we see this as the bedrock for future collaboration between our two countries.”
That agreement revolves around: 1) Defense and security cooperation; 2) Economic, commercial, and trade cooperation; 3) Two-way investment in science, technology, and network security.
Investment initiatives fit hand-in-glove with Bahrain’s efforts to promote services and manufacturing. With this in mind, Minister Fakhro said, he visited Select USA in his capacity as a Board Member of Mumtalakat, Bahrain’s sovereign wealth fund. “We view this as a two-way relationship,” he noted. “We are looking to attract U.S. investment into Bahrain, but we are also pushing Bahraini companies – including Mumtalakat – to invest in the United States.”
New Incentives in the Bahrain – U.S. Relationship
In recent years, Minister Fakhro suggested, Bahrain has taken steps to make the Kingdom an even more attractive destination for U.S. traders and investors. Some of these steps include:
Establishing a U.S. Trade Zone (USTZ) in Bahrain – The USTZ is designed to boost bilateral trade by creating a regional trade, manufacturing, logistics, and distribution hub for U.S. companies.
Extending Global Sea-Air Hub Status to the USA – Bahrain today has the fastest regional multi-modal logistics hub in the Middle East. The USA has “Official Partner Status” in this Global Sea-to-Air Hub.
Creating Business-Friendly Visas – Bahrain created the Golden Residency visa to attract fresh talent and investment, including unlimited entry and exit from the country and residency for close family members. This is in addition to Bahrain’s new ten-year multiple entry visa, which is offered exclusively to U.S. passport holders.
Extending Global Entry to Bahrain – In January 2022, U.S. Customs and Border Protection (CBP) launched a Global Entry (Trusted Traveler) partnership with Bahrain, the first agreement of its kind in the MENA region.
Adopting a Cloud-First Policy – Consistent with Bahrain’s Cloud Computing Services Law, the Kingdom has granted U.S. sovereignty over data – stored in Bahrain-based data centers – of U.S. beneficiaries.
Promoting Freedom of Navigation – Bahrain has been a regional leader in promoting freedom of navigation. In 2019, Bahrain became the first country in the Gulf region to join the U.S.-led International Maritime Security Construct.
“Ancient History”
David Hamod, NUSACC’s President & CEO, referred tongue-in-cheek to the signing of the U.S. – Bahrain Free Trade Agreement as “ancient history.” (Hamod testified before the Senate Finance Committee in support of the proposed FTA on October 6, 2005. His testimony may be found here.)
Kidding aside, Hamod said, Bahrain’s history and culture may be traced back five millennia. “In the ancient world, according to historians and the Epic of Gilgamesh,” he noted, “there was a small island paradise full of fruit trees, plants, and flowers – a place where sickness, violence, and old age did not exist. This Garden of Eden, according to cuneiform tablets from the Sumerian civilization, straddled the trade routes between Mesopotamia and the Indus Valley, resulting in one of the greatest trading empires of the ancient world.”
This Eden, Hamod noted, was called Dilmun. “As history buffs will tell you,” he suggested, “Dilmun was what is known today as Bahrain. Thus, Bahrain has been literally at the crossroads of civilization for some 5,000 years.”
In his Congressional testimony, Hamod went on to say: “Bahrain is undertaking significant economic reform, and the FTA is the centerpiece of this effort. The agreement ‘raises the bar’ for trade and investment rules that enhance market access, and it bolsters Bahrain’s role as an engine of economic reform . . . . In the eyes of our Chamber, this FTA represents a solid agreement. It sets the pace for the rest of the Arabian Gulf and is a strong model for the Arab world as a whole.”
Minister’s Closing Remarks
In his closing remarks, Minister Fakhro stated, “I would like to thank NUSACC for your heartfelt hospitality and longstanding partnership with the Kingdom of Bahrain. I greatly enjoyed meeting the innovative companies that participated in your highly successful roundtable, and I welcome your companies to explore Bahrain as a hub for the region.”
In the meantime, he concluded, “Our ministry and embassy will continue working with NUSACC as a key gateway to prospective partnerships across the USA. Congratulations again on 50 years of professional success, and keep up the good work!”
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