29 May 2004
‘Bahrain should integrate resources to become competitive’
By Mehmood Rafique.
Leading businessmen, investors and experts have termed the conclusion of Free Trade Agreement negotiations with the US a major development and opening of a new era of progress and development.
The business community in Bahrain views this major development as an endorsement of the Government’s economic, political and democratic reforms by the US. The businessmen hope that the agreement will be used as a model by other countries in the region.
Bahrain and the US announced on Thursday the conclusion of successful negotiations paving the way for FTA draft agreement to be reviewed by the Congress prior to be signed by the US President.
The Chairman of the Bahrain Chamber of Commerce and Industry, Khalid Mohammed Kanoo, yesterday underlined the importance of conclusion of the negotiations and said that the FTA reflected the close ties between the two countries.
“The FTA will boost bilateral trade, investments and commercial activities. It will also help increase bilateral trade substantially and open new avenues of joint ventures in all vital sectors of the national economies of both sides,” Kanoo said, adding that the BCCI, being the biggest representative body of business community in Bahrain, had set up a follow-up committee on the FTA with a major task to create awareness in the business community.
“The completion of the negotiations also reflects the important position of Bahrain in the region as the Kingdom has become the first GCC country to have FTA with the US. This is attributable to the successful and pro-active policies unveiled by the Government to cope with challenges in the wake of globalisation and the emergence of free global market,” Kanoo said.
Kanoo affirmed the private sector support and said that the early conclusion of the negotiations was a result of the tremendous working relationship between the public and private sectors in Bahrain.
Talking about the benefits, Kanoo said that the FTA would trigger the flow of inward foreign investments and offer a strong economic base for the national economy.
Dr Essam Abdullah Fakhro, the second vice- chairman of the BCCI and head of the BCCI Follow- Up Committee on the FTA, said that the BCCI had taken major initiatives to facilitate the private sector in Bahrain.
“The BCCI has been very active since the start of the FTA negotiations and in the last six months it had organised major workshops and forums for the benefit of the business community. We have had the opportunity to get a first-hand view from the top Government and private sector experts on the subject. We have requested the Ministry of Finance and National Economy to set up a national committee of members of the ministries of Finance and National Economy, and Commerce, the members of the BCCI, Bahrain Businesswomen Society, Bahrain Businessmen Association and the Bahrain Engineers Society,” Dr Fakhro said, adding that such a national committee would help the business community reap the maximum benefits of the FTA.
Dr Fakhro said that the Government has appointed a consultant to evaluate the BCCI proposal on forming the national committee on the FTA.
Referring to the upcoming workshop, he said that a guest speaker from Jordan, Samih Abdulrahim, would highlight the benefits of the FTA from Jordan’s perspective as that country had signed a similar agreement with the US in 1994. Dr Fakhro said that the workshop would also help Bahraini businessmen understand the technical aspects of the FTA.
“The BCCI, in its efforts to support the initiative of the Kingdom during the FTA negotiations with the US, would continue to host different programmes to create awareness about the FTA,” he assured.
Dr Fakhro said that the FTA was considered the most important economic project ever taken by the Kingdom. The finalisation of FTA between the two countries would bring numerous benefits for both sides in trade, economy and commercial sectors and would be reflected on the Kingdom’s economic growth in future,” he explained.
Dr Fakhro said that the size and volume of the existing investments would increase in the wake of the finalisation of the FTA.
Dr Hussain Al Mahdi, Chairman of the human resources development committee and economic expert, said that all business people in Bahrain in general and the small and medium-sized enterprises (SMEs) in particular are looking forward to Bahrain’s initiative to enter into an agreement with the US which definitely will help enhance all aspects of Bahraini economy.
“The FTA will contribute directly and indirectly to increasing the size and value of Kingdom’s exports and services with no barriers whatsoever either artificial (technical) or legal (customs duties).
“Bahrain will gain a minimum of 18 per cent in form of customs duties on Bahraini exports to the US. If Bahrain sells $300 million worth of goods it would save $40 million, which will make our exports more competitive.
“Against these background, Bahrain has to work out tripartite strategy and action plan to co-operate fully and integrate the resources available to become more competitive and to ensure high quality, high value-added productivity.
“In other words, through concerted efforts of the Government, workers and businessmen we can benefit fully from the FTA in lines with the direction being emerged due to the WTO resolutions to make Bahrain and other countries free of any custom barriers beginning 2005, making globalisation actually happen on the ground,” he added.