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Business Plan in Bahrain
Business Plan in Bahrain
Anyone can have ideas, but most successful endeavors are founded on thorough research and forward planning. The act of planning entails the identification of potential problems, enabling the preparation for likely scenarios, and consequently improves the survivable of even the most marginal of ventures. In the context of doing business in the Kingdom of Bahrain, one should at least consider the current economic climate of the region in the formulation of a business plan – the thoughtfulness of which can directly impact the ease of securing financing and overcoming any other barriers to incorporation.
The relatively small and densely populated Kingdom of Bahrain is located in the Arabian Gulf of the Middle East, and is con-temporarily regarded as a wealthy, oil-pioneering island nation. The Gulf Cooperation Council (GCC) founding member nation owes its wealth at the start of the 21st century to the rise in crude oil prices from about USD 40 per barrel in 2000 to around USD 100 per barrel at the end of the decade, and due to its ongoing dependence on trade with its larger neighbors, other member nations of the GCC, and on declining oil reserves for income, the kingdom was exposed to the rapid decline of oil prices in 2001 and 2008. Bahrain’s rulers recognized the need for a transition to other methods of sustaining their economy and formulated the Economic Vision 2030 plan, penned in 2008 by the nation’s monarch His Majesty King Hamad bin Isa Al Khalifa.
The broad aims of this plan were to diversify the kingdom’s economy, shielding it from future shocks in oil prices, in addition to increasing the welfare of their citizens. To achieve this end, the Economic Vision 2030 plan detailed the ambitious objectives of coordinated reform to improve immigration and labor laws, in addition to increasing transparency in governance, attracting sustainable foreign investment in selected sectors, improving education, and providing higher-paying jobs for the citizens of Bahrain. The contents of the Economic Vision 2030 plan seem to indicate that the leadership was aware of Bahrain’s manufacturing competitiveness being eroded by larger low-cost global hubs, and with the ambitions for their citizens being in contradiction to the principles of low-cost manufacturing, the Kingdom of Bahrain has been looking to the private sector and especially foreign investment to assist in achieving their objectives.
The reality in the kingdom has not quite caught up with the vision however, in an interim report released by the Bahrain Economic Development Board in 2016, detailing the progress in implementing the Economic Vision 2030 plan, the kingdom’s leadership acknowledged the continuing dependence of their citizens on the public sector for employment, the un-sustainability of this model due to declining oil revenues, the relatively low rates of employment for Bahraini citizens versus non-Bahrainis in the private sector, and a stagnation of wages for citizens. In an apparent effort to spur further progress and observable results, the leadership of Bahrain provided details and more specific objectives in their National Development Strategy (NDS), a plan intended to accelerate the course of the kingdom’s reformation program during the years 2015 to 2018. The NDS addition to Bahrain’s Economic Vision 2030 adds a welcome dose of detail, touting the auditing of government spending to increase transparency and promoting human rights to improve the kingdom’s global reputation. Other positive signs that the Kingdom of Bahrain’s leadership is closer to realizing their vision include considerations for further education of their citizens, privatizing utilities such as water supply (as was done with the telecommunications industry), providing higher quality healthcare, and decreasing the nation’s dependence on food imports by designating the little arable land available for agricultural use while protecting their natural environment.
Considering the history of Bahrain’s economy, the principles of their Economic Vision 2030, including the more directed strategies such as the NDS, a prospective foreign investor may glean an insight into the needs of the Bahrainis and utilize this information to formulate a business plan that may not only attract financing but may be welcomed by the leadership as well. If a commercial entity can provide the citizens with a necessary product or service (the most basic being: food, water, housing, healthcare, or training), secure financing to do so, and include a mechanism of corporate social responsibility in the business plan, it seems obvious that the kingdom would welcome such an enterprise. An observation of some of Bahrain’s largest corporations, such as Aluminum Bahrain (or Alba) – Bahrain’s aluminum producer, Tatweer Petroleum, and the Gulf Hotels Group, reveals a strong trend of corporate involvement in charitable causes within the kingdom.
Before heading to the Kingdom of Bahrain’s Ministry of Industry, Commerce and Tourism to pursue incorporation, it is highly recommended that one should have conducted a thorough market analysis of the region, developed a battery of strategies to implement operations, and constructed an effective business plan. Bahrain’s ministry has released various templates for use in the creation of a business plan, a version of which can be found here. Another recommended resource, available here, was produced for use in the formation of charitable organizations, but it also provides useful guidelines to be generally applied when creating a business plan. A further recommended step to take is to have an independent review conducted before pursuing incorporation, either by an adviser with practical experience, or by one of the Bahrain Economic Development Board’s international representatives