Bahrain in talks for cloud computing and FDI deals

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DUBAI: Bahrain is in advanced talks for investment deals with cloud computing companies from the United States, China and the United Arab Emirates, an Economic Development Council official has said, as the country seeks to diversify its oil-based economy.

Cloud computing and foreign direct investment are key elements of Bahrain’s economic stimulus package which aims to boost non-oil gross domestic product by 5% this year and includes $30 billion in strategic projects.

The plans come as regional economic heavyweights Saudi Arabia and the United Arab Emirates are also banking on technology to diversify their oil-dependent economies.

Saudi Aramco Development Co, a subsidiary of oil giant Aramco, has partnered with Google Cloud to offer cloud services to Saudi customers. The United Arab Emirates is opening three Amazon Web Services (AWS) centers this year.

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Bahrain, which since 2018 has hosted a large AWS center – the first in the Middle East, has introduced a “data embassy law”, the first of its kind in the region. It allows countries to store data in-country but under their jurisdiction, Ali AlMudaifa, director of investments at the Bahrain Economic Development Council, told Reuters.

EDB is also in talks for a sugar refinery, management consultancy and British insurance companies to set up shop in the tiny kingdom. It is also in talks for FDI deals with Israel, which are expected to be announced “soon”, he said.

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MAJOR PROJECTS

Bahrain aims to achieve a balanced budget by 2024, a target delayed by two years due to the pandemic.

The medium-term fiscal plan is linked to a $10 billion aid package in 2018 from Kuwait, Saudi Arabia and the United Arab Emirates that helped it avoid a credit crunch.

“We are ready to compete for big projects,” AlMudaifa said. “We believe our value proposition is self-sustaining and we are also looking for synergy opportunities across countries.”

“We have very strong momentum and traction, a very diverse pipeline,” he said.

The recovery program includes plans for the tourism, logistics, industry, telecommunications and oil and gas sectors.

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The EDB alone aims to attract $1 billion in FDI and create around 4,500 jobs this year after attracting $893 million in 2021 and creating 4,861 jobs.

Saudi Arabia, the United Arab Emirates and Kuwait account for about half of Bahrain’s total FDI stock, AlMudaifa said, adding that he expected FDI from the Gulf to Bahrain to increase further. Saudi Arabia’s powerful public investment fund said it would invest $5 billion in Bahrain.

“Many of these major strategic development projects, in due course and gradually and gradually, will be opened up for private sector investment,” AlMudaifa said.

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