Arab News, Dubai
Bahrain presents opportunities for collaboration across several sectors with fintech as perhaps the most exciting from a Japan-Bahrain perspective, Bahrain’s investment promotion agency Economic Development Board (EDB) has said.
EDB said that Bahrain has capitalized on its banking expertise to grow a fintech ecosystem, pioneering regulation for cutting-edge technologies such as open banking and cryptocurrencies at a rapid pace.
“Both nations are keen to move toward a cashless society, and Japan has produced two of the key cashless technologies that are driving digital transformation around the world,” the EDB statement said.
Khalid Humaidan, chief executive of EDB, said that he was excited at the prospect of Japanese business growing its presence in Bahrain.
“Japan is a nation of innovators, and with pioneering initiatives such as the regions’ first fintech regulatory sandbox, Bahrain has rightly earned a reputation as the Middle East’s de facto test-bed for emerging disruptive technologies,” Humaidan said.
“We have served as a commercial hub and bridge between East and West for thousands of years, and are now proud to be the destination of choice for innovative businesses looking to test and scale their solutions across the region and beyond,” he said.
Humaidan said that Bahrain has been ranked among the top-ten most improved economies globally as per the World Banks’s Doing Business 2020 report.
“The innovation of Bahrain and Japan combined could be a powerful force in driving the digital disruption that is shaping the world today,” he said.
The EDB statement said that diplomatic relations between Japan and Bahrain stretch back nearly 50 years, and commercial ties even further, with the first shipment of Bahraini oil arriving in Yokohama in 1932.
Since then, the relationship has grown from strength to strength with bilateral trade exceeding $1.5 billion in 2018.
The trading relationship has evolved in parallel with Bahrain’s efforts to diversify its economy away from hydrocarbons; during the crown prince’s official visit to Japan in 2013, 13 trade agreements were signed, not just for oil and gas but also health care, pharmaceuticals, education and financial services.
More than 20 major Japanese companies are operating in Bahrain with a strong focus on the financial services and manufacturing sectors. Some prominent names include Daiwa Capital Markets, Mitsubishi UFJ Financial Group, Yokogawa, Nomura, Toyota, Sumitomo, SBI Pharmaceuticals, and KINTETSU World Express.
“We chose Bahrain for its favorable and supportive business environment,” said Chris Bamber, head of corporate marketing for Yokogawa. “The Kingdom serves as a perfect launchpad for scaling our operations and trialing new services across the wider region.”
Indeed, an increasing number of companies across the globe are seeking to break into the growing $1.5 trillion GCC opportunity, with hyper-connected Bahrain as their springboard.
The Kingdom boasts access to the wider region, including its largest market, Saudi Arabia, to which it is connected by the 25km King Fahd causeway, with a second Saudi causeway in the planning stages.
Also due for completion in the first quarter of next year is a new terminal for Bahrain International Airport, which will increase annual capacity of passengers from 8 million to 14 million, and cargo capacity to 1 million metric tons per annum.
With continuous improvements to air, sea and road networks, Bahrain has positioned itself as the region’s logistics hub — a benefit to manufacturers looking to set up their regional operations.