rasheed mohammed al maraj : vigorous economic growth in bahrain speech by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the strategic forum on the bilateral trade and investment opportunities in the banking and finance, london, 10 january 2008. * * * in 2008, in a time of economic boom, it seems almost a fruitless exercise to embark on a discussion about the benefits of economic liberalization in the gulf region. why would we want to talk about the continuing need for economic liberalization when economic growth in recent years has exceeded all expectations? the large number of public and private investment projects currently underway have collectively achieved unprecedented record levels of growth, furthering the region ’ s attractiveness to international investors. some might even say that we don ’ t need any more liberalization. we are doing quite well enough thanks to oil. frankly, i would have to disagree. even in boom times, the key challenge to gcc governments is to maintain the momentum of economic activities thereby creating additional job opportunities. this means encouraging economic diversity, and increasing the private sector ’ s role in the economy. and hopefully, with increased diversity and a larger private sector, there will be less dependence on oil income as a catalyst for growth in the future. the way to achieve a more efficient and competitive private sector is not by protectionism but to increase competition and open up the domestic economies further. let me explain this perspective first by looking at the key factors that have contributed to the vigorous economic growth we are witnessing at the moment. the key growth factors are : 1. a large increase in oil revenues, which have permitted high government spending. 2. more flexible economic policies aimed at reducing red tape, and facilitating greater participation by the private sector ; including trade liberalization and allowing foreign ownership of local companies. 3. a redefinition of the government ’ s role from being purely an owner of nationalized industries and job provider into a more regulatory and supervisory capacity ; allowing more room for the private sector to function effectively and efficiently. 4. the emergence of a highly qualified professional domestic private sector that is capable of engaging in entrepreneurial activities and adding value locally rather than engaging in the traditional role as merchant where frankly little if any economic value was added locally. as an example of economic restructuring taking place in the region, i would like to review briefly bahrain ’ s experience in economic reform and liberalization over the last 30 years and the benefits we have derived. a key objective

confident that financial innovation and technological innovation will continue to advance together. that is why we consider meftec, which is a showcase for the best in financial technology, plays such an important part in underpinning bahrain ’ s position as the financial centre for the gcc and wider middle eastern region. ladies and gentlemen, i am sure that you are eager to see what the exhibitors have to offer. i thank you for joining us today and again extend my appreciation and thanks to the organizers and exhibitors. i wish you a successful conference and exhibition.