Insead University, Singapore
Thank you all for your kind welcome. In particular I would like to thank the Deans and Directors of Insead, and Professor Helmut for extending the invitation to join you here today.
Your Excellencies, Professors, Ladies and Gentlemen; good morning.
We find ourselves meeting in challenging times. Around the world, the impact of a global downturn is being felt – increased uncertainty, market turmoil, plummeting property prices, rising redundancies. What began last year as the sub-prime mortgage crisis and then became the ‘credit crunch,’ has now developed into a situation that Warren Buffet has referred to as ‘the biggest financial meltdown in American History.’ The impact of this crisis is already being felt in other markets – in the UK, Germany, Belgium and in Japan, central banks have stepped in to ensure the solvency of major financial institutions.
It is certainly evident that many nations are struggling. I know that times are tougher than they were just a few short months ago. But we should not forget that the world is not the same place it was 80 years ago, when the Wall Street crash led to the Great Depression. Nor is it the same place it was 12 years ago, when the Asian Financial Crisis hit closer to home. It is not the same.
Our global economy is evolving; power has shifted. It is no longer centred in one or two limited hubs, but in both established and emerging markets, east and west, north and south. We are interconnected as never before, and this gives us the opportunity to be more balanced than we have been in generations, perhaps more than at any other time in our history.
Without underestimating the severity of the situation, it is a time when we can and should, indeed we must, take heart from the fact that some emerging economies around the world remain resilient. And some of those economies are in the Middle East, and in the Arabian Gulf in particular. I believe that our region can, in these tough times, help all of us to weather the worst of this global storm.
From inside the Middle East looking out, this is part of our vision. We can immediately use our current liquidity to limit the global damage in the short term. This will help rebalance and reinvigorate economies in other parts of the world through mutual trade, investment and alliance. Over the long term our vision is about much, much more – it is about creating sustainable growth and investing to build lasting success that is not dependent on the ups and downs of energy prices.
All of you know about the major problems in the Middle East, we have sadly been through some testing times with the recent wars and regional conflicts. However, the Gulf Cooperation Council members – Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates, have fortunately been insulated from the worst of these troubles and in circumstances that are sometimes far from ideal, have managed to grow and prosper.
I should stress that I am not here to offer packaged solutions to the problems of the Middle East. Instead, I am here to give you the Middle East’s ‘other story.’ The story that is reality for millions of people living in one of the most exciting regions anywhere in the world right now. The story that does not get told so often. A story of hope, of rising to challenges, of changing lives and shaping new futures.
The story I want you to hear today is that we in the Gulf are becoming responsible global citizens. We are committed to using our mineral wealth to invest in the true wealth of our people today, and for future generations to come. Just as you here in Singapore looked to the wellbeing of your people and your communities as the fundamentals for economic growth.
In contrast to the wider global picture, the IMF predicts that the economies of Bahrain and the GCC will continue to grow at an average of around seven percent in the next year. We do not take this good fortune lightly. We believe it is a heartening prospect not just for us in the region, but for all of those we do business with, whichever nation they may hail from.
We also know that we have been blessed with resources provided by our mineral wealth, and acknowledge that oil has played a central role in spurring GCC growth. But, I must stress that we are learning from the mistakes of the past. We know that we cannot afford to be at the mercy of hydrocarbon booms and busts.
Under the leadership of His Majesty King Hamad bin Isa Al Khalifa, I can assure you that Bahrain is now looking firmly to the long term. To economic diversification. To stability and security. To our human rather than natural resources. We are seeking further growth based not on oil, but on firm foundations rooted in real productivity gains, real economic growth, real improvements in education, and real skills in our labour force.
In the last few years, Bahrain has made changes in the way we operate as a nation. In addition to ushering in comprehensive political reform that established a bicameral parliament and independent judiciary, His Majesty has tasked us to develop a clear economic vision that will enable us to move forward driving productivity and building on the opportunities before us. We will become an increasingly vibrant business and financial centre; investing in our people and learning from the experiences of others while never losing sight of what makes us special – our Islamic principles; our traditions; and an open and tolerant approach that respects and welcomes people of all cultures, ethnicities, and denominations to our shores.
In line with our vision, we have already implemented wide-reaching and effective reforms across all areas of our economy. Reducing red tape and making it easier and quicker to set businesses. Enhancing our infrastructure. Making sweeping changes to our education system to improve standards, and to equip our young people with the skills they need to succeed in the job market.
We are already known as the home of the most skilled national workforce in the GCC, but we are keen to further develop this competitive edge. Our Labour Fund will invest hundreds of millions of dollars over the next ten years to provide Bahraini nationals with sector-specific skills training.
For what is the purpose of reforms if not to improve lives? Bahrain’s
true wealth is not monetary or mineral – it is in our people. This is
what we are investing in. This is why we are making changes. We are striving for individual and community fulfilment. Enabling our citizens to achieve their full potential, supported in all aspects of their growth. This is our goal.
In Bahrain, we also make the same commitment of responsibility to businesses and entrepreneurs, whether home-grown or from overseas. We have a tried-and-tested legal and regulatory environment which investors can trust to protect their interests. We are committed to developing corporate governance and increasing transparency. At the same time, we are acutely aware of the need to offer value for money – through the lowest regional tariffs and operating costs coupled with the highest quality of life for employees and their families.
Each of these factors has contributed to our strong and sustained growth to date. The GCC states have a population of 35 million, and there are almost half a billion people in the Middle East as a whole. It is a growth market – an increasingly affluent market. And with a base of operations in Bahrain – thanks to our strategic location and outstanding air, road and sea links – businesses can reach out and access consumers right across the region.
That is why Bahrain is lauded as the freest nation in the MENA region, indeed as one of the top 20 freest economies in the world by the US based Heritage Foundation and Wall Street Journal’s Index of Economic Freedom. It is this business-friendly environment that has seen us maintain and extend our position as the financial capital of the Middle East – a status we have held for four decades.
I know that our vision and approach to strengthen both the economy and the fabric of society is one shared by your leadership – past and present – who also believe in the inherent value of achieving growth through expansive economic reform.
Almost 50 years ago, as a fledgling nation Singapore faced many problems. Unemployment and underemployment, a shortage of housing, racial tensions, and a lack of the land and natural resources on which many economies are built. But you rose to overcome these challenges. Under the stewardship of your Prime Minister, His Excellency Mr Lee Kuan Yew, you tackled these issues head on, and succeeded in raising the standard of living; uniting your people and creating a truly prosperous and successful nation. A mighty achievement.
I must say here that I have the very great honour of meeting with His Excellency your Minister mentor tomorrow. To be able to spend time, to listen and learn from one of the most inspirational and effective leaders of our time is an absolute privilege.
His Excellency developed an economic infrastructure that has become a model for other developing nations – including many of those in our region who look to learn from all that you have achieved. In Bahrain, it is something we take great inspiration from. You have walked a path of global responsibility that we now look to emulate. We too are looking at how we can future-proof our economy by investing in our people, our infrastructure, our wellbeing and our surroundings as we move into the next critical phase of economic development.
There are well established and fruitful trade links between us – close to half a billion dollars worth of bilateral trade was exchanged in 2007.
We are now looking at developing closer ties. Last year, I inaugurated the Middle East Business Group here in Singapore. A real step forward for trading between our regions. We are also seeing new and interesting alliances develop between Singaporean and Bahraini businesses in the power and utilities sectors – something that I look forward to seeing grow and strengthen still further.
Back in February of this year, a MoU was signed here in Singapore between Bahrain’s Ministry of Finance and the Singapore Cooperation Enterprise, with a view to enhancing bilateral relations and creating a Bahrain-Singapore partnership. Already much has been achieved as a result of this agreement which will see our nations cooperate and consult on a number of vital sectors – business development, information technology, training, tourism, social services, and aviation and ports.
In addition, it will play a critical role in helping Bahrain to shape one of key drivers of our own development and long term economic success – productivity. Improving productivity is an area that we have identified as being instrumental to our future growth. We look to emulate Singapore’s achievements in this area in our own trade and industries, and in so doing, contributing to business and individual success and achievement.
The Bahrain-Singapore partnership shows that the work we are doing together is about much, much more than trade and business. It is about friendship and mutual respect.
So, I would like to see us work together ever more closely to build on our individual strengths and successes – bringing out the best in one another, and helping to create balanced and fruitful long term partnerships. Partnerships that have and will bring the best results for our people.
Before I close, I am very aware that the focus of this speech has been economic in nature. So that I can respond to questions that you may have about this topic or the wider security dimension in the Middle East, I would like to go back to where I began today.
To say, yes, these are indeed testing times that we find ourselves in. But it is in testing times that we are spurred to act. To be the best we can be, and to unleash the potential that may have otherwise lain dormant.
I call on each of you here today to consider how we can rise to the challenges we face internationally. I hope that by being here today, I can plant a seed. A seed that may grow into ideas that change the way we work, that see the development of new technologies, new alliances. New ways of thinking, seeing, cooperating.
Remember we all have the collective responsibility to make this a better world.
Thank you.