These projects were approved by Shaikh Nasser Bin Hamad Al Khalifa who is the King’s representative for humanitarian work and youth affairs, the National Security Adviser, the President of the Supreme Council for Youth and Sport and also the Chairman of the Board of the Royal Humanitarian Foundation (RHF).

The budget will also be dedicated to providing computers to students from needy families, helping to sanitize towns and villages, including providing food baskets (as part of the “Your Food at Your Home” program). The amount will also be dedicated to the creation of an epidemic treatment centre, supporting distance learning applications and helping indebted people.

On the same days when the “Feena Khair” campaign was presented, Bahrain also decided to allocate 468 million dollars.

468 million dollars, which is equivalent to BD 177 million, will, therefore, be allocated to meet the emergency costs of Covid-19 and to support efforts to combat the pandemic.

The amount will be returned to the general government budget for 2020.

This has been announced by the Prime Minister His Royal Highness Prince Khalifa bin Salman Al Khalifa, who remotely chaired the weekly Cabinet session in the presence of Crown Prince Salman Bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister.

The draft legislation has been presented by the Minister of Finance and National Economy, said the Secretary General of the Cabinet, Dr. Yasser Al Nasser.

A draft decree was also approved, based on the recommendation of the Executive Committee, which aims to promote transparency with regard to reorganisation and bankruptcy procedures and to strengthen the rights and role of creditors.

The sum is in addition to the $11.4 billion incentive package launched by the government in April to help the private sector for three months.

However, most Bahraini legislators have expressed their interest in supporting a proposal to extend the package for another three months, until the end of September.

The measures adopted include in particular:

• Loans and assistance to businesses in all productive sectors, with the suspension for a period of three months of rents on industrial and municipal land, as well as taxes related to the tourism sector.
• During this period, the government is responsible for paying electricity and water bills, both for individuals and businesses.
• The Central Bank of Bahrain increased its credit lines by $9.8 billion and postponed repayment of loan instalments.
• The country’s Liquidity Support Fund was increased to $530 million and it was decided to direct all Tamkeen Fund’s work programmes towards supporting the most distressed companies.
• Finally, the economic stimulus package also includes the payment of the salaries of all employees in the private sector for a period of three months, for an amount of approximately BD215 million ($569 million).

The Bahraini legislators are deciding to extend the economic aid package for another three months, as they are taking into consideration information from Bahraini companies.

Companies have in fact in recent days expressed strong concerns about the economic implications caused by Covid-19, with most of them expecting recovery within 12 months of the end of the coronavirus, provided they do not fail earlier.

In recent days a survey conducted by the Centre of Studies and Initiatives of the Bahrain Chamber of Commerce and Industry (BCCI), entitled “The Economic Impact of Coronavirus on Business Owners”, has clearly described the situation of companies in the country and their economic dynamics.

The survey shows some unsatisfactory data.

About 59% of companies are facing the risk of bankruptcy in the next 6 months if the pandemic continues, and therefore also the fear of having to deal with layoffs. In addition, 83% of entrepreneurs have been affected by the decision to close down commercial and industrial activities in order to prevent the spread of the coronavirus in the kingdom, with all the economic consequences of the case. About 21% declared that they are at low risk of closure, while 20% do not expect bankruptcies on the horizon.

The survey covered about 1,180 companies, ranging from micro to large companies in almost a dozen sectors.

The tourism and hospitality industry has been and will be the most affected, with 71% of businesses expected to close in the next 6 months if things do not improve, followed by education 63%, commercial markets 58%, real estate and construction 55%, technology 54%, transport and logistics 53%, industry and energy 49%, health 47%, food 46% and finance, insurance and taxes 27%.

The BCCI research also highlighted the problem related to the redundancies.

Depending on the size of the company, the largest number of redundancies will be in medium-sized enterprises 67%, while only 34% of large companies have stated that they will make more than 20% of their workforce redundant.

Again, the tourism and hospitality industry will be the hardest hit, with 52% of companies claiming to lay off more than 20% of their employees, followed by commercial markets 58%, transport and logistics 52%, food 50%, education 45%, real estate and construction 41%, healthcare 37%, finance, insurance and taxes 33%, technology 31%, industry and energy 26%.

These numbers explain very well the government concerns and therefore also the willingness to extend the aid measures for another three months.

Fortunately, Bahrain’s economy remains highly attractive to foreign investment.

This is due to its pro-business regulation, its very advantageous taxation and its simplified bureaucracy.

The emblem of its level of attractiveness and propensity for dynamism is, for example, its newly achieved position in the world rankings as a destination country for startups.

In fact, according to the annual report of the ecosystem rankings prepared by StartupBlink, Bahrain ranked 75th in the world, rising by 20 positions.

The report has praised the “collaborative startup community” and the “framework of legal and support systems for start-ups and entrepreneurs”.

Initiatives including StartUp Bahrain, Tamkeen and Bahrain FinTech Bay were also highlighted, as well as the favourable tax conditions and the highest levels of investment achieved.

The research also mentioned, for example, several Bahrain-based startups such as Rain, the first licensed cryptocurrency platform and Skiplino. The last one is a cloud-based queue management system that allows companies to intelligently manage social distancing during the COVID-19 pandemic.

Eli David, CEO of StartupBlink, stated about the report: “Good startup ecosystems are key. They create jobs, stimulate the economy, increase tax revenues, improve quality of life, urban innovation, attract and retain talent. As an entrepreneur, the position will greatly influence the chances of your startup being successful.

The CEO then added: “It’s also important to know the performance of your ecosystem. Companies use these rankings to make decisions about future expansion, universities and consulting agencies use them for research, while governments and local development organizations use them to evaluate the performance of their programs”.

Pakiza Abdulrahman, the manager of the Bahrain Economic Development Board, declared: “Choosing where to start a startup is one of the most important choices that a founder can make, and this is influenced by a number of factors such as tax levels, market access and the cost of doing business.

Pakiza Abdulrahman then added: “Startups arriving in Bahrain are joining a thriving ecosystem that combines pro-business regulation with competitive costs, backed by the support of a listening government, not to mention our unrivalled access to the $1.5 trillion GCC market”.

She then concluded affirming that: “We are pleased that Bahrain’s approach continues to gain recognition and we look forward to improving our support for the startups of tomorrow and today”.

For years now, Bahrain has been offering startups an ideal place where they can experiment with new ideas, combining pro-enterprise government policies with an ever-changing ecosystem and a large pool of international talent.

To be able to say this, just give a number: start-ups in Bahrain have gathered funding of over $63 million over the period 2016-2019.

In the wake of this marked propensity for innovation, there is also an extremely important and far-sighted element to add.

A few days ago Bahrain ratified a key UN convention. And it has become the first country in the MENA region to do so.

The convention in question concerns electronic communications.

The aim of ratification is to contribute to allow a new wave of digital activity throughout the region and thus also improve investor protection.

The United Nations Convention on the Use of Electronic Communications in International Contracts (2005) aims to strengthen commercial certainty. The purpose is, therefore, to ensure that contracts concluded and other communications exchanged electronically are as valid and enforceable as their traditional paper-based equivalents. It, therefore, introduces specific principles concerning the use of technology during the signature process.

This will enter into force in Bahrain on 1 January 2021.

Bahrain has become the fourteenth country globally to join the treaty, along with major economies such as Singapore and Russia.

Among the countries that have signed the Convention, but have not yet ratified it, we find, for example, China, Saudi Arabia and South Korea.

Bahrain had already made a move on this issue, in fact already in November 2018, the Kingdom became the first nation in the world to enact legislation based on the model laws of electronic commerce outlined by the United Nations Commission on International Trade Law (UNCITRAL).

Khalid Humaidan, Chief Executive Officer of the Bahrain Economic Development Board, said: “To build a truly digital economy in the Gulf Cooperation Council (GCC), it is essential that our regulations keep pace with time and technological developments, particularly in a historical period when more and more business is being done in the virtual world.

He then added: “Bahrain is paving the way for technology reforms and is committed to supporting the needs of entrepreneurs and investors while they work to build long-term growth in our thriving e-commerce landscape. We look forward to continuing to work closely with the United Nations while we remain at the forefront of legislative developments”.

With this ratification, as of January 1st 2021, digitally concluded contracts and all other electronic communications in Bahrain will have the same value and will be as applicable as those printed on paper.

The Bahrain Economic Development Board expects that this ratification in Bahrain will lead to “a new wave of digital business promotion, which will further improve investor protection”.

By, Michele Brunori