Bahrain in the first half of the nineteenth century was dependent upon pearling as its core driver of the economy. This was a time of great uncertainty due to wars and invasions as regional powers fought over territory. In 1820, the Al Khalifa family entered a treaty relationship with Great Britain. By the mid-19th century, Bahrain became the pre-eminent trading centre in the Gulf, overtaking rivals Basra, Kuwait, and finally in the 1870s, Muscat. At the same time, Bahrain’s socio-economic development began to diverge from the rest of the Gulf by transforming into a modern state. Indian merchant families set up businesses creating a web of trade routes across the Gulf, Iran and the Indian sub-continent.
Today, we again have great uncertainty in the region with millions of people displaced due to war and territorial issues contributing to the overall sense of insecurity. This is not dissimilar to the situation in the early ninetieth century highlighted above. Similar to what happened in the story above, Bahrain is at a crossroads. Does it stagnate, or regress because of our local and regional dependency on oil, or does it grasp with both arms the opportunities that are available?
There is no doubt that we are in the process of transforming into a new digital age. This is bringing about much disruptive change like the situation that took place when the industrial revolution occurred around 1760. Back then the textile industry in England was built around families working out of their own homes establishing prices and practices that were set by long standing regulations. Today, in Bahrain we have similar long standing regulations such as the labour law which I’ll come back to later.
The new textile machines were crude and in terms of quality they could not match the best cloths produced by artisans. But they had one advantage: they could produce cloth that was cheap. That was because they did not require as much manpower. Another way to put it is that the new technology allowed textile producers to be more productive and customers benefited by having access to low-priced clothing and textiles.
Those who embraced the change greatly benefited whilst those who fought the change withered and died. We are in Bahrain in the same place as England was back then. Are we going to fight the change all around us or are we going to embrace the change and thrive?
Amazon Web Services (AWS), is opening its regional data centre in Bahrain early next year and this should be applauded. We can build on this making Bahrain a leader in this new digital age. But it comes with a health warning.
Back to the labour laws which need to be brought up to date to reflect reality. Our education system also needs to be totally reinvented both in schools and further education. Employers need to recognise the value of human capital and especially young talent with enormous potential. Restrictive work practices including those associated with part-time working or self-employment must be changed.
Time is not on our side, but if we move quickly and build upon the Amazon investment we can be a winner and not find ourselves left in the dust regretting our failure to face up to our new brutal reality.