I am always a bit confused by headlines which promise good times ahead and an improvement of the economy. Did I miss something? The promises seem to imply that we have been passing through troubled times economically.
Let’s face it – it has been a truly challenging summer for businesses in Bahrain for the past three months. Malls are bustling – with window-shoppers. Sale signs have not enticed customers and small businesses are being squeezed by a growing cycle of delayed payments.
On paper, things always look bright. For example, the total number of commercial registrations – new companies – surged by 197 per cent in 2016 according to ministry figures released in January this year.
But what impact has this had on the GDP? A mere 1.13pc increase compared with 2015. Should a growth of 197pc in new company registration not generate much more?
Similarly in 2015, the chief economist of the Economic Development Board made an important point when he said that although SMEs made up 99pc of Bahrain-registered companies that year, they did not have a proportionate economic impact.
This is something we still face today – too many Bahrain SMEs begin with a great idea but there is a real struggle to secure the resources to scale up operations.
Another issue is that too many Bahrain SMEs are trade and service oriented – there seems to be no appetite for manufacturing or industries that can grow into large enterprises.
While the government has some excellent support systems, I think we lose momentum because the system does not offer enough advice about product improvement, process innovation and in-depth market information. It is precisely this lack that pulls Bahrain back in global rankings. The Global Entrepreneurship Development Institute says Bahrain entrepreneurs are risk-averse and lack the flexibility and vision to adopt new methods and technology.
Enabling SME loans is only a first step – Tamkeen and a few banks (too few) are doing this already. But building a strong SME community and a collaborative culture are far more important in fostering SME innovation and success than enforcing policy and regulations.
Beyond the Bahrain government’s considerable flexibility in meeting SMEs part of the way during these difficult times, there must be a more concerted effort to assess and analyse issues realistically. With so many countries laying out the red carpet for foreign investors, there is a need to reposition Bahrain better.
Bahrain’s roadshows abroad must get out of the ‘cashewnuts and canapes’ corner and start becoming accountable – how many quality projects are we attracting that are suited to the kingdom’s unique strengths?
Instead of tackling facts, we have reams of glorified newsprint on our statistical success and nowhere near enough analysis of what more needs to be done.
We also get silly schemes that hurt SMEs, like the April 2017 rule proposed by the Northern Municipal Council, to charge ice cream vans for their distinctive musical arrival since it is an advertisement. Local ice cream factories are definitely SME and I would have thought all divisions of government would go out of the way to help them flourish.
The need of the hour really is to hear less about how well things are going and more mentoring and brain-storming on how best to work our way through these admittedly difficult times.
All the ingredients for SME success are available in Bahrain. What we need is the fire of a well-researched invitation to the world so that the circle is complete.