The Solution for Bahrain’s Economy is Somewhere Else


I do understand and believe that we have very committed leadership who are trying their utmost best to solve the financial issues we are currently going through here in Bahrain. We Bahrainis have indeed elected members of the parliament to assist in governance, however, they are also unable to see clearly the right path towards prosperity. I myself have done extensive research on trust during my Ph.D. period, and would like to briefly shed light to you on how to see the current situation, so you would be able to understand that we need structural reform, not cosmetic.

Let’s not make a big fuss and deal out of what happened a couple of weeks back or so. It was very obvious, we were told that the government would shrink its size; political analysts knew that this is impossible without raising dramatically the unemployment rate, and nothing happened in return. That was not a good economic decision, while the intention of course was to serve the economy, we fired, and we did not strike, at all. Then few days ago we witnessed a decision aimed to integrated some official authorities, yet still I believe this is more of a management and PR move than an economic one, because nobody lost their jobs, and no branches were closed. I have yet to see the study that was made which resulted to advice on this move.

As I have mentioned in my previous article, if the government wants to save money, decrease expenditure, then unfortunately it has to be in social services. But today, I will discuss how the government can be ‘Making’ money, instead of saving.

Bluntly, if I had to grade our judicial system in Bahrain, it would be lucky if it got a passing grade. The Judicial Institution is THE backbone of prosperity. Official entities should provide the proper umbrella system to the business environment in Bahrain. It should encourage growth and regulate, remember this word very well, regulate. In order to regulate what needs to be regulated, like the health sector, or telecom sector, or IT sector, or industrial sector, or the banking sector, the regulator should have the complete authority to impose what needs to be imposed.

Our serious problem here in Bahrain is that we lack the ‘Umph’, the power, to enforce the law and order. According to proper scientific research, what this does is decrease trust in the overall system. When there is no trust, there is no economy. We lack trust to invest, as simple as that, and we lack the motivation to take risks because we are exposed and unprotected by law.

Earlier this morning, I was sitting outside a coffee shop with a cousin of mine discussing this same topic. I told him look at this illegally parked motorbike, by itself, without any form of authority coming over to enforce the law. That was a lost opportunity by the government to make money out of that illegally parked motorbike. Some time ago, a company approached me to assist in establishing their business in Bahrain, it was a smart car park business. Basically, there is an elevator, and it parks your car for you. I told the investor that his business would not work in Bahrain, because people will simply park right outside your sidewalk, and it might be even cheaper to pay the parking fine, IF they ever get one. It cannot get more obvious than this.

So in a nutshell, to keep this short for you to read with interest, the solution is not to become more bureaucratic by having a bigger elephant managed by a weaker minister, it is to encourage growth by making it easier to mobilize, faster to work, and immediate to punish abusers. Lets grow some muscles and work on making our economy a more certain one.


To read more about the scientific relationship between trust and economic growth click here.

Categories: Bahrain, Economics, Politics

Tags: ,

1 reply

  1. Lovely thought and I would like to add and reiterate on your point that “Consequences” rightly and justly implemented are what will bring about self discipline and control.

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