Bahrain finance minister: Islamic rules saved us from recession
From Richard Quest, CNN
March 10, 2010
Bahrain’s finance minister tells Richard Quest how the country escaped recession during the global downturn.
Manama, Bahrain (CNN) — Bahrain’s finance minister said adherence to strict Islamic rules helped his country escape the worst of the global recession.
Finance Minister Sheikh Ahmed bin Mohammed al Khalifa predicts growth of four percent for Bahrain’s economy this year, saying “long-term consistent growth” is the kingdom’s goal.
Sheikh Ahmed said the country “built an economy that is resilient, that is able to withstand shock.”
“We’ve gone through this period very well. I think the diversification of our economy has helped us tremendously,” he told CNN.
Asked how the kingdom avoided some of the riskier assets that ended up crippling other economies, the minister said: “Looking at Islamic finances and industry, because they are barred by their own rules from some of the creative products, they were able to stay away from those industries.”
He said the country had a “conservative nature.”
Bahrain, an archipelago of 33 islands off the coast of Saudi Arabia, is a constitutional monarchy with an elected legislative assembly that has been ruled by the al Khalifa family since 1783.”We’ve never claimed we were immune,” Sheikh Ahmed said, however. “We were exposed like the rest of the world. But by adhering to best practices, we were able to make sure that we minimized the damage to controllable levels.”
For centuries, pearls were Bahrain’s biggest export and its main source of income. In the early 1930s, though, Bahrain became the first Gulf state to find a sizeable deposit of crude oil, a discovery that boosted the country’s economy and accelerated its modernization. Bahrain is also tapping into tourism and sports — in a similar way to other Gulf countries facing declining oil reserves — to promote itself internationally and attract new streams of revenue.
Bahrain International Circuit is the home of a series of international auto races, including the annual Gulf Air Bahrain Grand Prix, which kicks off the Formula One season this weekend. Sheikh Ahmed said he expected 2010 growth to be “slightly better than what we experienced in ’09.””The challenge for us is to start looking at … what’s going to propel our economy for the next couple years,” he said.