The Hindu Business Line : Opening up new avenues for collaboration

Majestic structure: Pearl Roundabout - a major landmark of Bahrain - the six arched pillars of the structure represent the six countries of the Gulf Cooperation Council

It takes less than an hour from Bahrain international airport — an ultra modern transport hub in the Gulf — to reach the Shakir Formula-1 racing track. The journey towards the Bahrain grand prix circuit is fascinating. The glass and concrete of the Manama business district, which is home to some of the world's leading banks, soon gives way to roomier surroundings.

Stretches of green meet the eye as the road cuts through the well-known Riffa zone. The area boasts of an 18-hole golf course — its greens dotted with palm trees set against the stunning backdrop of the desert.

However, verdant Riffa, quickly surrenders to the vast stretches of brown sand, where not too long ago, oil in the Gulf, was discovered. Then, amid the harsh surroundings where hot winds blow fine grains of sand, the first glimpse of the Shakir racetrack can be caught.

The Shakir circuit, the brainchild of Bahrain's Crown Prince, Shaikh Salman bin Hamad Al Khalifa, is much more than an impressive sports facility. Being the first motor racing track in West Asia, people from the region and beyond throng to witness the annual grand prix, the most prestigious event that is staged here. The presence of a fair number of celebrities in the audience makes media headlines. In the process, Bahrain gains as media spotlight showcases its emergence as a young, dynamic and rapidly modernising Arab nation.

Bahrain's entry into the F-1 racing circuit also symbolises the vision of its rulers, who wish to rapidly develop the non-oil sectors of its economy. With oil resources depleting rapidly, Bahrain has made a conscious decision to invest in tourism, services and industry. The signing of a Free Trade Area (FTA) agreement with the US has been a strategic decision.

In tandem with this move, Bahrain is developing the Hidd economic free zone to draw international investors to take advantage of the FTA. It is also modernising its existing Mina Salman port, which has been handed over to the Dutch giant APM Terminals (APMT). The company also manages other regional operations in Oman and Jordan.

However, modernisation of Mina Salman faces limitations. Geographical constraints prevent the dredging of deeper channel that would allow bigger ships to dock. This is because the port cannot accommodate ships with a draft exceeding 10 metres. The replacement of the outdated equipment here has also not been easy.

Consequently, Bahrain is energetically developing the Shaikh Khalifa bin Salman Port (KBSP) — its new facility at Hidd. The APMT will also run this port, which would be capable of accommodating the fourth generation container vessels. The KBSP is expected to begin operations in the third quarter of 2008. It is being developed as a top bracket port in the region in the same league as Dubai's Jebel Ali facility.

Transport hub

The KBSP will enjoy a tremendous geographical advantage. It is close to the Hidd industrial area and Saudi Arabia. A 25-km long causeway links Bahrain with Saudi Arabia, providing the land corridor along which a large volume of containers can be sent.

The opening to Saudi Arabia will also allow the land transit of goods to several other members of the six-nation Gulf Cooperation Council (GCC) and beyond. Consequently, the KBSP can emerge as a major transport hub, having a large regional footprint. Apart from Bahrain, Saudi Arabia, Kuwait, Qatar, the United Arab Emirates (UAE) and Oman are members of the GCC

With Bahrain's small size constraining its soaring ambitions, the country's rulers strongly advocate rapid regional integration under the framework of the GCC. "In Bahrain, we feel claustrophobic in this very small land. We really want to fly," says Shaikh Khalid bin Ahmed Al Khalifa, the country's articulate foreign minister. Shaikh Khalid points out that the construction of another causeway that would link Bahrain with Qatar was a "very strategic project."

"Once we finish this causeway we would also want our population to go and commute everyday and work in Qatar," he said.

The minister said that it was necessary for the GCC countries to pursue the European Union (EU) model. "We look forward to removing all those hurdles at the borders... We need more breathing room for our population to work and excel."

Referring to the Crown Prince's visit to India, Shaikh Khalid observed that it was taking place at a time when there was a clear recognition on both sides that the age-old ties between the two countries needed to acquire a modern expression. "We are not taking a look towards India anew. We have traded with India. We have cultural ties with India. We technically had a FTA with India for over two centuries. During the time of the British Raj, the whole area was open to us to do business, do trade and learn. So India has been part of our mind, our heart and part of our culture. We are now building on a very solid foundation between the two countries," he said.

Indus valley connection

Going back to antiquity, historians have found evidence of commercial ties existing between Mesopotamia (modern Iraq) and the Indus valley civilisation in India. This relationship had a significant spin-off effect on forging close ties between the Indus valley and the Gulf civilisation.

It has been recorded that one of the three ancient trade routes between India and Europe cut across the Strait of Hormuz, Mesopotamia, and Aleppo in Syria. On the way sailors stopped at the Gulf posts for food and water.

For instance, the Magan country (Oman and its surrounding area), the Dilmun Kingdom (Bahrain and its neighbourhood) assumed importance as midpoints where trans-shipment of Indian goods bound for Mesopotamia and beyond took place. Many seals have been discovered in Bahrain that bear typical Indus valley designs.

Further signs of Bahrain's ancient links with India emerged when excavations in Bahrain indicated that Indians from Saurashtra had built the Anzac temple in Dilmun.

Intellectual collaboration, between India and the region flourished after the establishment of the Abbasid Caliphate in Baghdad in 750 A.D. A large number of Indian books on literature, philosophy, mathematics, medicine and astronomy were translated into Arabic then.

It was also an age when many Arab geographers, historians and travellers began to explore India, leaving behind valuable accounts of the political, economic and social conditions of the time.

Pearl industry

Commercially, the pearling industry contributed greatly in bringing the Indian and Gulf businessmen together. This happened before the discovery of oil in the Gulf in the 1930s and 1940s. A large section of the population in Kuwait, Qatar, Bahrain and the east coast of Saudi Arabia was involved in pearling activity. While raw pearls were produced in the Gulf, they were pierced, polished, converted into jewellery in India. They were either sold to the Maharajas in India or re-exported to Europe.

Mumbai became attached to the pearling industry because many of the Gulf pearl merchants travelled to the city to seek loans for the expansion of their pearl diving operations and to market their products. Some of them settled down in the city after investing their revenues from pearl trade into real estate projects and other commercial fields.

Among the merchants to do so were Albassam and Algosaibi from Saudi Arabia and Alzayani and Alurrayed from Bahrain.

As Bahrain opens up for rapid modernisation, several lucrative business opportunities for Indian businessmen are beginning to show up.

Apart from Information Technology, business services such as legal services, accounting services, and consultancy services offer a good potential for growth.

The automotive parts sector, which has a huge market in the Gulf, is another area of possible collaboration. Healthcare is another important field, where the Government of Bahrain is encouraging hospitals and healthcare units to pitch for Indian expertise.

Despite its focus on the non-oil sectors of its economy, Bahrain earlier this month, opened up 7,400 sq km offshore acreage for bidding. Block 1, which covers 2,858 sq km, is to the north of Bahrain close to the borders with Iran and Qatar. Block 2, which covers 2,228 sq km, is also in the north but closer to Saudi Arabia. Block 3, which has an area of 1,088 sq km, is towards the east bordering Qatar. Block 4, covering 1,478 sq km, is located south and southeast of the island. Bidding will close on September 17.

In a separate initiative, international operators will be offered onshore assets of Bahrain in and around the Awali Field for exploration. Bahraini officials say that Indian oil companies are encouraged to participate in the bidding process.

In steering Bahrain's rapid development, the country's Economic Development Board (EDB) is playing a crucial role. The Crown Prince, himself, chairs the EDB, which also includes seven key ministers and seven leading executives from the private sector, among its board of directors.

The board's composition is designed to enable both the public and private sectors to work together. The EDB is leading a three-pillared reform programme that addresses the issues of the economy, labour market, and the education sector.

With Asia and India clearly on its radar screen, the EDP has opened offices in Hong Kong, Tokyo and Bangalore.

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