Report of the Bahrain Independent Commission of Inquiry

Chapter II — Historical Background
Bahrain is considered an important centre of Islamic banking globally. 46 The
real estate and construction sectors, which are closely linked to the financial
sector, witnessed a boom over the past decade and currently comprise about
7% of GDP. 47 Major Bahraini companies include Gulf Air, the Gulf
Aluminium Rolling Mill Company (GARMCO), Bahrain Petroleum
(BAPCO), Aluminium Bahrain (ALBA) and Bahrain Telecommunications
Company (Batelco).
54. Bahrain’s economy has experienced consistent growth over the past
decade; the GDP real growth rate was 3.1% in 2009 and 4% in 2010. 48 GDP
per capita has also been steadily increasing and reached USD 20.475 in the
first decade of the century. 49 The increase in wealth has not however been
equally shared across society. Policies that are seen as economically liberal
and friendly to the private sector have focused largely on real estate and
financial services, and some Bahrainis see these policies as benefiting only a
small segment of the population. 50
55. The Government of Bahrain (GoB) over the past ten years has
embarked on a series of structural reforms. These include the launch of
“Bahrain 2030”, described by the GoB as an economic vision for the country,
which emphasizes expansion of the service, financial, tourism and high-tech
sectors. The Economic Development Board (EDB) was created as an
independent body chaired by HRH Prince Salman bin Hamad bin Isa Al
Khalifa (HRH the Crown Prince) to “draw up the future strategy for economic
development” in Bahrain. Mumtalakat, a sovereign wealth fund, was set up as
an umbrella holding group for the major companies in Bahrain, including
ALBA and Gulf Air. New independent regulatory bodies also have been
established in association with the EDB. These include agencies overseeing
higher education, labour and telecommunications. International consultancy
firms have been actively involved in the establishment and operation of most
of these bodies. EDB, Mumtalakat and the associated regulatory bodies are
46 Bahrain Economic Development Board, “Performance of the Finance Sector”, Annual
Economic Review 2010 (2010)
http://www.bahrainedb.com/uploadedFiles/Bahraincom/BahrainForBusiness/Annual%20Econ
omic%20Review.pdf p 36, accessed 16 November 2011.
47 Bahrain Economic Development Board, “Real Estate Downturn”, Annual Economic Review
2010 (2010),
http://www.bahrainedb.com/uploadedFiles/Bahraincom/BahrainForBusiness/Annual%20Econ
omic%20Review.pdf p 35, accessed 16 November 2011.
48 Bahrain Economic Development Board, “Economic Overview”, Annual Economic Review
2010 (2010)
http://www.bahrainedb.com/uploadedFiles/Bahraincom/BahrainForBusiness/Annual%20Econ
omic%20Review.pdf , p 4, accessed 16 November 2011.
49 International Monetary Fund, World Economic Outlook Database: Bahrain (April 2011)
http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weorept.aspx?pr.x=61&pr.y=10&s
y=2009&ey=2016&scsm=1&ssd=1&sort=country&ds=.&br=1&c=419&s=NGDP_R%2CNG
DP_RPCH%2CNGDP%2CNGDPD%2CNGDPDPC&grp=0&a=#cs4 accessed 16 November
2011.
50 Widespread Inequality Fanning the Flames in Bahrain, Deutsche Welle (17 February 2011).
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