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The launching of Bahrain’s Economic Vision 2030 in 2008, and the new constitutional amendments in 2012 have positively impacted the national business environment towards more competitiveness, sustainable development, skilled employment, economic growth, and social fairness.

As part of its Economic Vision 2030, Bahrain is striving for sustainable development through economic diversification away from oil. In order to achieve this long-term vision, in 2008, a National Economic Strategy was developed by the EDB and coordinated with relevant ministries. The main aim of the strategy is to transform Bahrain into a knowledge-based economy that is competitive and sustainable. The main focus is on existing high-potential, labour-intensive sectors where both the private sector and the Government can play crucial complementary roles.

Bahrain seeks to develop its tourism industry as a key platform for sustainable future economic growth and diversification. In seeking to maximise the potential of growth in the tourism industry, Bahrain will capitalise on the advantages of its natural environment, cultural heritage, geographical location, moderate and tolerant society and remarkable culture of hospitality.

Manama held the status of ‘Capital of Arab Culture’ in 2012 as part of UNESCO’s cultural capital campaign and was named ‘Capital of Arab Tourism’ in 2013 by the Arab Tourism Organization. In celebration of Bahrain’s 2012 ‘Capital of Arab Culture’ debut, the Ministry of Culture planned a year-long program of performances, seminars, and other events showcasing Arab culture. Each month provided a new focus area ranging from visual arts to poetry, and even the environment.

Bahrain’s trading environment is stable and transparent. There are no import restrictions except for patrimonial heritage, environmental, health or security considerations.

In Bahrain, import prohibitions are maintained for various reasons, including environmental protection, health and safety, and religious and moral considerations (Table 3.5).

Table 3.5 Prohibited imports, 2014
HS Code: 95.07.10.00; 96.01.10.00; 96.01.90.00
Product description: Ivory and articles of ivory
Reasons for prohibition: Preserve the natural environment
Responsible ministry: Ministry of Industry and Commerce

The Council of Ministers is headed by the Prime Minister. Entrusted with overseeing state interests, the Council of Ministers implements government policy, and supervises government business. Cabinet resolutions may only be passed when a majority of members are present and with the approval of a majority of those present. The Cabinet also submits recommendations to the King on economic, political, social, environmental, executive, and administrative matters of concern to the Government, and proposes draft law and decrees for his approval. Where a Royal Decree is required, Cabinet resolutions are submitted to the King for ratification.

Under the Pan Arab Free-Trade Area (PAFTA) Treaty , in force since 1 January 1998, most trade barriers among its members were eliminated on 1 January 2005, with some products excluded from liberalization for health, environmental, security, and religious reasons. Numerous implementation problems and non-tariff barriers are still reported, such as differing standards, lengthy bureaucratic and administrative procedures at the borders, and transit fees. For products imported from PAFTA countries, local value-added of at least 40% is required in order to qualify for preferential treatment. Currently, 17 members are implementing the agreement. The principal entity responsible for implementing the programme is the Economic and Social Council of the League of Arab States. The PAFTA was notified to the WTO by the Kingdom of Saudi Arabia in 2006.

A free-trade agreement (FTA) between Bahrain and the United States was concluded in 2004. Bahrain was the first GCC country to do so. This FTA, which entered into force in August 2006, covers trade in goods and services; it also has provisions on investment, intellectual property rights, e-commerce, labour, environment, and dispute settlement. It provides for tariff elimination in agricultural and non-agricultural goods over a maximum of ten years, although a large share of products were granted duty-free access immediately.