Over 500 international investors and select business leaders flocked to Bahrain to explore how to unlock opportunities across the ‘New GCC’ as ‘Gateway Gulf Investor Forum’ defined the region.
For a first edition of this event, this is much significant. The small-sized, high-valued country is repositioning itself as the gate to the whole Gulf region, and as an investment and relationship node to a multi-trillion dollars market.
The event showcased major investment-ready projects worth $18 billion, with projects in the planning phase driving up the value of the project pipeline to $26 billion.
With this busy checklist, the GCC is clearly making steady steps towards a new era of diversified economies away from oil, driven not only by more openness to trade especially with China, under the ‘One Belt, One Road’ strategy, but also by tech, innovation, and a growing impact of the private sector stakeholders. These were the keywords we heard during the numerous plenary sessions, and even in the workshops.
HE Zayed R Alzayani, Minister of Industry, Commerce and Tourism in Bahrain, said: “The GCC is starting a new journey. Diversification is top of the agenda and we’re seeing new sectors emerging in the region.” He explained: “Bahrain has doubled the contribution of tourism to GDP in the past three years. No investment in the world is riskless, but the broader trend of the GCC is very positive. The GCC has proven to be sound, growing, and people are investing here.”
Embracing more innovation
Speaking on a panel about how governments can embrace innovation to support growth, H.E. Rasheed Al Maraj, governor of the Central Bank of Bahrain (CBB), said: “When we first started looking at fintech, the biggest hurdle was the fear factor. For any regulator to think about change in the landscape can bring anxiety because naturally we target certainty, so we avoid risk that can prevent financial instability. But what we decided at the CBB is that this coming technology is of immense benefits to the economy of Bahrain, that’s why we took the dive and made the necessary regulations and pushed industry to start looking at this and introduce changes we think will help the economy at large.”
Not just tech, but the implementation of this tech is what matters most as panelists noted. Dilip Rao, CEO of Ripple, said: “It’s not so much about technology, it’s about what we do with that technology. What is the problem we’re trying to solve? When Blockchain first emerged, it was overhyped. What is happening now is people are knuckling down to specific use cases.”
GCC governments: From operators to regulators
Most of the panels which involved key officials and ministers had almost one focus: To reflect a more modern approach of GCC governments, ones that do not operate and run entities and ministries, but rather act as regulators and supporters of the private sectors’ activities. This would entail more innovation to demonstrate, more agility, and more dynamism. “We want the government to not compete with the private sector, to stick to regulation,” said Jassim Alseddiqi, chief executive officer at the Abu Dhabi Financial Group, at the opening plenary of the conference. He added: “We see tremendous opportunity in the coming years. The best risk / reward opportunity is here in the GCC. In our mind, political and economic risk in the GCC is much smaller than in the rest of the world.”
HE Khalid Al Rumaihi, chief executive of the Bahrain Economic Development Board, speaking on a panel also emphasized the importance of collaboration between the private and the public sectors: “The government and the private sector need to work together to create solutions and unlock opportunities in the region. That means that government needs to change its approach, it needs to collaborate and be agile in order to respond to the changing opportunities being created. This is what we call our ‘Team Bahrain’ approach.”
Panelists agreed that with this new role of the government puts bigger responsibilities on the shoulders of the private sector which needs to take more action and to be proactive. They also spoke about the new generation of talents that should be invested in boosting the capacities and the deliverables of the region.
Mohammed Alshaya, executive chairman of the Kuwaiti Alshaya Group, said that the role of government is not to spoil the youth and give them free jobs. “They have to be qualified to get a job. It is unfair for a smart graduate to be sitting next to someone who is there by tribal connection, it is unsustainable.”
Fadi Ghandour, executive chairman of Wamda Group, spoke about the notion of ‘hard’ and ‘soft’ infrastructure and how education is key in the region. “Hard infrastructure is great in the region but not much is happening when it comes to soft infrastructure,” he said. He questioned how easy is it to start a business, how much does it need, what are the laws, and how to open markets to these newly established business... “Thats soft infrastructure and that’s the job of the government,” he said.
Panelists also agreed on the major role that women will play in the new workforce which will leave great impact on the market.
What this means for entrepreneurs
To put all these top level speeches and chats into context, Wamda spoke to several ecosystem stakeholders to link the dots, and see what would these advancements mean to startups and entrepreneurs, thinking of Bahrain as a haven.
Hassan Haider, partner at 500 Startups Bahrain told Wamda that events such as Gateway Gulf are a big opportunity to bring together a big group of investors not only from the country but from across the GCC. “Having these investors come to Bahrain and have an overview of what’s happening in the region is really interesting, and that positioning is going to be pretty strong for Bahrain going forward because there is a competitive advantage here when you’re looking in the context of the overall GCC region,” he said. He explained that in everyone’s talk, speakers have been mentioning innovation, tech, startups, even someone mentioned Silicon Valley. “There’s a lot of focus from the government and the private sector who are participating and supporting the nascent ecosystem.” He added that what’s even more interesting is the fact of seeing some startups invited to this conference which is a very exclusive and high level event. “Startups have been invited and a number of panels are built around startups and tech. 10 years ago no one cared, no one knew. It’s been a massive shift in the mindset, and we could probably thank the collapse in oil prices, because until then no one cared. Then, they started realizing how important it is to expand the private sector, create new companies, VCs, and support innovation, and establish this whole new infrastructure. Although it was negative for many in the existing governments, for us it was very positive.”
On a separate note, Hadyah Fathalla, executive director at C5 Accelerate Bahrain, spoke to Wamda about the fast shift in the mindset that Bahrain has been through in no more than 18 months. “When we were established in Bahrain a few years ago, we launched the country’s first tech accelerator called Cloud 10, it was also one of the first cloud innovation accelerators in the region. We build it in collaboration with Amazon Web Services (AWS) on the back of Amazon’s intention to geographically expand into the MENA region. Late last year, they announced they were building an AWS region in Bahrain, their first in the MENA. When we started, the landscape was different, and the fact that so much has happened only in a span of 18 months to two years is indicative that the ecosystem is being built and that the foundation is solid enough for the building to be smooth and pick up fast.” According to her, Bahrain is not only a good testbed, but it is also small enough and agile enough to be able to react pragmatically to the market’s needs.
Haider revealed that in the next couple of weeks, 500 Startups will be announcing new projects along with EDB. “The difference between Bahrain and Dubai is pretty significant. In Dubai, you have a lot of success stories from the Dubai ecosystem, which is 98 percent made of foreigners. This means that what works in Dubai, doesn’t necessarily work in Saudi or somewhere else. But here in Bahrain, 50 - 60 percent of requests come from Saudi Arabia, which accentuates a big opportunity there. Bahrain has a chance to grow its ecosystem.” According to him, Bahrain is focusing on the early part of the equation and doesn't want to go after series C and D. “There is an opportunity for Baharin to be the place where startups get established.”
Among the startups on one of the panels was onegcc, a platform that matches between employers and employees in the region. Alharith Alatawi, chief executive officer of the company, told Wamda that Bahrain was always seen as a place where “we can easily set up because of the relaxed legislations and the support for investors, and because it gives you access to a $1.5 trillion market [the GCC] and specifically the Saudi market which is the largest in the region.”
He explained how easy it is for startups in Bahrain to access the Saudi market as the two countries are linked by just one bridge. “This is making it increasingly interesting to investors to come and settle here. Gateway Gulf aims at making investors aware about Bahrain and the opportunities the market has to offer.” Onegcc has so far 400,000 job seekers in its database, over 2,000 companies using its system, and most of its clients are based in Saudi Arabia. The company has been running for two years now, and succeeded in raising $3 million from C5 Accelerate. Alatawi revealed that they have been in discussions during Gateway Gulf conference with investors for potential collaboration, and have concluded three investment meetings.
Following the session that revealed more details about the newly discovered oil reserves in Bahrain, Wamda spoke to HE Shaikh Mohamed bin Essa Al Khalifa, Chairman of Tamkeen in Bahrain, who told us that the country’s planning on following the same model of Norway when it comes to using oil incomes as a capital to reinvest, and tech will get a big chunk of it. He said that with the new oil discovery, Bahrain might have three new pillars to focus on: Trade, tech, and oil.
“Discussions during Gateway Gulf attendees have been frank and strong, as people were able to meet directly with their counterparts.”
Mega announcements took center stage
The conference was a great opportunity to announce major funds and new projects set to revolutionize the market and drive its growth forth.
The Bahrain Development Bank (BDB) launched a $100 million Venture Capital Fund of Funds which will invest in VC funds that have a presence in Bahrain, aims at further boosting the startup ecosystem in Bahrain and the Middle East. Khalid Al Rumaihi, chairman of EDB said: “We know that access to capital is one of the biggest constraints on growth for startups, so this fund will help businesses in Bahrain and across the Middle East to get access to the capital they need to expand.”
The Bahrain Energy Fund was also announced by Bahrain’s Minister of Oil, His Excellency Shaikh Mohammed bin Khalifa Al Khalifa. The fund which seeks to raise a total of $1 billion and receive an initial seed capital from entities in Bahrain, including Nogaholding, Osool and SICO, is the first in the GCC to provide institutional investors with access to local energy assets. It will be open to investors in Bahrain, the GCC and internationally, and will invest in a range of energy projects in Bahrain across the downstream, midstream and upstream sectors, which include developments in the newly discovered oil and gas resource. The Fund will also introduce private capital to help fund major infrastructure in Bahrain and enhance development of vital energy projects.
Besides funds, innovative and tech-driven projects have been in the limelight. Bahrain’s Survey and Land Registration Bureau announced plans for a new generation of advanced, live-updated, high-resolution 3D maps of Bahrain. The new project, aims at preparing for future innovations in the field of autonomous vehicles and driving.
Blockchain advancements were not missed in the conference as the General Directorate of Traffic (GDT) revealed a new project to introduce a Blockchain-based vehicle registry system in the country. In line with the government’s aim to provide world-class services, and complementing recent advancements in regulating the vehicle industry, GDT is seeking a technical partner to design and implement the Blockchain vehicle registry system. GDT director general, Shaikh Abdulrahman bin Abdulwahab Al Khalifa explained that this registry will reduce the overall cost of maintaining critical vehicle information, offer greater efficiency in terms of supply chain management, and ensure a high level of transparency for all stakeholders in the vehicle registration ecosystem. This blockchain vehicle registry system forms one part of a project pipeline aimed at building on recent advances in technology to further enhance service delivery and facilitate private-sector-led opportunities.
The Information & eGovernment Authority (iGA) Chief Executive, Mohamed Ali AlQaed told the audience that the iGA has succeeded in fully migrating over 40 government systems and services to the cloud utilizing more than 480 AWS servers. Work is underway to complete a full migration.