Bahrain industry minister: Saudi diversification is good for the Gulf

MANAMA: Economic developments in Saudi Arabia will have direct and indirect positive effects on the Gulf region, Bahrain’s Minister of Industry, Commerce and Tourism Zayed Al-Zayani has told Asharq Al-Awsat.
“The bold decisions taken by the Saudi leadership will open up a new dimension in the diversification of the economy,” Al-Zayani said. He added that Saudi Arabia and its strong economy is the main pillar of Arab economies.
“Due to the strength of the Bahraini-Saudi relationship and rapprochement on a social and economic level, the Bahraini economy is considered to be a part of the Saudi economy, and any positive development in the Saudi economy will have positive implications for Bahrain,” he said.
The minister said that the size of the GCC common market was changing according to a number of factors, the most important of which was the price of oil as all GCC economies were linked mainly to oil as a raw material or a commodity.
He said that GCC countries were now focussing on establishing relations with global blocs and commercial markets because trade exchange increased the diversification of sources of income.
“The approach Saudi Arabia is taking is to diversify the industrial base of the Saudi economy, and it is hoped that many of the goods that Saudi Arabia currently imports will be manufactured domestically. Some of the output of these industries will then be exported and this will expand the size of the economy.”
Al-Zayani said that Bahrain would introduce VAT in mid-2018 but it would have a gradual impact as it was a small amount.
“It is 5%,” he said. “There may be an initial reaction to it but over time the consumer will adapt to it. Consumers may have to make different choices and change the products or companies that they use.”