Bahrain’s Shift from F1 to Finance: The Emerging Liberal Economy in the Middle East

Bahrain has risen to prominence in recent times, with its renowned Formula One races attracting international attention and investment, positioning the Gulf state as a progressive and open economy in the Middle East.

Since its inaugural event in 2004, the Formula One races in Bahrain have garnered significant interest and investment, prompting neighbouring countries like Saudi Arabia, Qatar, and the United Arab Emirates to host their own races. These competitions serve as demonstrations of their economic strengths, drawing in investors from across the globe.

Now, Bahrain is shifting its focus to the finance and technology sectors. Officials and business leaders are actively promoting its historical role as a bridge between the East and the West, particularly emphasizing its strong ties to the UK. Bahrain is a crucial investment destination for the UK, with British banking giants playing a significant role in the financial industry.

Bahrain’s sovereign wealth fund, the Mumtalakat, has recently announced plans to make substantial investments, including in the North of England. The fund also aims to expand internationally and become a major player in brokering global deals.

Over the years, Bahrain has developed deep connections to the West, rooted in its 100-year history as a British protectorate. London-based Standard Chartered, for instance, was the first bank to establish a presence in Bahrain in 1920, contributing to the country’s development as a pivotal financial hub within the region.

In its move away from reliance on oil and gas, Bahrain has actively diversified its economy and intensified its liberalisation efforts. The country’s economy has experienced significant growth, with its national income increasing to over £35 billion in 2022 from less than £8 billion two decades ago.

Key areas of focus for Bahrain’s developing economy include banking and tourism. The financial sector has surpassed the oil and gas industry as the largest contributor to the gross domestic product (GDP), accounting for 17.5 per cent.

Furthermore, Bahrain aims to position itself as a hub for technological advancements, particularly in artificial intelligence and cloud computing. Companies such as Amazon and Citigroup have already established a significant presence in the country, making it an attractive prospect for tech investments.

The shift in Bahrain’s focus has not been without its challenges, especially in the wake of the pandemic. However, the country remains resolute in its efforts to establish itself as a globally business-friendly destination, promoting its liberal and inclusive policies in comparison to its regional counterparts.

Bahrain’s transition to a more forward-thinking and open economy has undoubtedly captured the attention of global investors and business leaders. With its rich history, strategic location, and commitment to liberalisation, Bahrain is poised for success as it strives towards a brighter economic future.