Neighbours come to the rescue

19 December 2013

Bahrain’s GCC neighbours provide funding to help kick-start a revival of the island’s unrest-hit economy

After a difficult four years following the recession and the regional unrest, Bahrain is moving ahead with key infrastructure projects. However, unusually for a GCC state, the schemes are being funded by neighbouring governments.

While the recession in 2009 resulted in the collapse of the GCC’s property sector, Bahrain’s development programme has been further impacted due to the political protests in 2011. In an effort to stem the unrest, the GCC pledged to provide a $10bn aid package to the country over a 10-year period, which was to be used to improve social conditions for local people and invest in vital infrastructure schemes.

While little investment in infrastructure was forthcoming in 2012, there has been progress on some key projects in recent months, with work on many of these due to start in 2014. The wastewater sector is one area in which significant investment is required. In recent weeks, the Works Ministry has invited firms to prequalify for a contract for the Tubli sewage treatment plant and the Housing Ministry has invited interest in the Al-Madina al-Shamaliya plant. The Tubli expansion is being funded by Kuwait and Saudi Arabia, and the Al-Shamaliya scheme is being financed by Abu Dhabi.

Improving the country’s infrastructure will help stimulate the economy and encourage private investment again. After years of declining economic growth and falling investment, Manama will hope the assistance of its neighbours will help kick-start its revival. 

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