Manama will need to do more

30 August 2010

Housing shortage is a key issue for October elections and there are only two bidders for the pilot scheme

Bahrain’s plan to address its housing shortage using the private sector offers a neat solution to two of the country’s most pressing issues: the potential of civil unrest from the majority Shia population and a constrained budget.

The waiting list for government-provided social housing stretches to 53,000 families and it takes up to 12 years to get allocated a property. Shia groups claim that they are the main victim of the housing shortage, and the issue is one of their chief grievances in the run-up to October’s elections.

The Sunni ruling family of Bahrain is keen to address the problem and bring the waiting list down to five years by encouraging private sector developers to develop housing schemes for low-income nationals.

For the government, the project also represents an opportunity to get the more efficient private sector to take on the development and stretch out the financing of the schemes over a much longer time horizon.

That will be good news for the country, which faces a more constrained budget than its neighbours in the GCC because of dwindling oil reserves.

The scheme may not be the panacea Bahrain hopes for though. Only two bids have been received for the pilot housing scheme and significant progress is unlikely before the elections. There is great political pressure on this scheme to be a success. More will be needed to solve Bahrain’s housing shortfall.

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