The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets

Chapter 2BahrainThreads of Growth Markets in Islamic Finance

Hatim El-Tahir

Director, Islamic Finance Group, Deloitte & Touche (Middle East)

How the kingdom of Bahrain will shape its Economic Vision 2030, initiated by the Economic Development Board, will remain the central economic and political driver in the decade ahead. Positive regulatory and policy measurements have been achieved, and these have favorably contributed to the development and growth of the Islamic financial services sector. In addition, the kingdom continues to enjoy a strong financial services industry, which contributes to 25 percent to the kingdom's GDP and employs more than 14,000 people.

It is no surprise that Bahrain has become the region's choice location for many international financial and investment houses. One of the main factors behind the growth of the sector is the sound regulatory framework and government support provided to market participants. Another is that the country enjoys a reasonably savvy indigenous professional and financial expertise—Bahraini nationals represent more than 66 percent of the financial industry's workforce, which is especially compelling as compared to other GCC countries that have a large majority of expatriates.

In 2012, the real gross domestic product (RGDP) increased to 3.4 percent, from 2.2 percent in 2011, and foreign direct investment grew stronger after a period of decline in the wake of the global financial crisis. Experts forecast that the RGDP will reach ...