Bahrain has announced a new national economic growth and fiscal balance plan with the aim of enhancing the economy’s long-term competitiveness and supporting the post-Covid-19 recovery.
The multi-year plan represents one of the Kingdom's largest economic reform programmes, said a Bahrain News Agency report.
The new five-pillar plan, which aligns with Bahrain’s Economic Vision 2030 and the Kingdom’s intention to achieve net zero by 2060, includes:
* New labour market reforms: This includes a long-term national labour market strategy; a review of labour fees; and a new Tamkeen strategy (Bahrain’s public authority which supports the development of the private sector) to continue upskilling the Bahraini workforce. The programme aims to create 20,000 Bahraini jobs and train 10,000 Bahrainis annually until 2024.
* Regulatory reforms package: Simplifying the process of business licences approval procedures; the launch of a new government land bank; an online portal to showcase investment opportunities; launching an online portal to digitize and simplify urban planning related services; and the launch of a new residency permit programme to attract talent and investors. The package aims to support $2.5 billion of foreign direct investment by 2023.
* Strategic projects plan: Catalysing over $30 billion of investments in strategic projects and creating new industrial investment areas across the Kingdom.
* Priority sectors plan: Six new sector strategies will be implemented across oil and gas; tourism; logistics; financial services; telecommunications, IT and digital economy; and the manufacturing sector. The new sector strategies aim to support annual growth of 5% in the non-oil sector by 2022.
* Fiscal Balance Program Update: Eight new fiscal reform workstreams incorporate reducing recurrent non-manpower expenditure; reducing project spend; reducing manpower expenditure; streamlining the distribution of cash subsidies to citizens; increasing Government owned entities annual contributions; adjusting commodities prices and prices of services provided to companies; introducing new government services revenue initiatives; and a VAT increase to 10%. The programme seeks to balance Bahrain’s budget by 2024, compared to the pre-Covid-19 target of 2022.
Following the announcement, Shaikh Salman bin Khalifa Al Khalifa, Bahrain’s Minister of Finance and National Economy, said: “This comprehensive economic and fiscal plan is an investment in our nation’s people, our businesses, and the future of Bahrain.
“The swift healthcare and economic action taken by the government throughout Covid-19 secured the foundations of recovery, as evidenced by the real YoY growth of 5.7% in the second quarter of this year. The Kingdom is emerging from the pandemic with reasons to be highly optimistic and the plan announced today aims to turbocharge the recovery.
“The plan is also a concrete statement of our intent to secure a balanced budget by 2024 and provide long-term fiscal sustainability, with eight new spending and revenue initiatives complementing our broader economic competitiveness enhancements.”
Source: Trade Arabia