Building economic resilience, localising industrial capabilities, and deepening inter-regional trade are vital to securing the Gulf’s economic future, leaders and policymakers emphasised yesterday at the Made in GCC Forum in Bahrain.
During a high-level ministerial panel, GCC officials and international trade representatives outlined a unified strategy to transform the bloc into a self-reliant manufacturing hub.
Opening the discussion, Industry and Commerce Minister Abdulla bin Adel Fakhro highlighted domestic manufacturing’s impact on job creation and national resilience.
“Producing locally gives countries more resilience and creates jobs, which is critical — especially in manufacturing, as it’s one of the largest job creators in industry,” Mr Fakhro said. “Historically, Bahrain depended too heavily on the energy sector, but over the past 20 years, it has significantly diversified its economy. Oil and gas is no longer our biggest contributor to GDP; it is actually our third-biggest contributor.”
Manufacturing has now surpassed oil and gas as Bahrain’s second-largest GDP contributor, behind financial services. Local production in strategic sectors like food and pharmaceuticals proved essential during recent regional supply chain disruptions.
Despite global trade barriers, Mr Fakhro reaffirmed the GCC’s commitment to open economic policies, noting that intra-GCC supply chain integration allows raw materials extracted and processed in one member state to be manufactured into final goods in another.
Key infrastructure, such as the planned regional cargo rail network, will accelerate this by reducing transit times and cutting red tape.
Bahrain’s In-Country Value (ICV) programme — which offers a 10 per cent preference on government tenders for companies retaining local investment — was also showcased as a success. Following mutual recognition agreements signed with Saudi Arabia (2023) and the UAE (2024), Bahraini manufacturers now enjoy seamless access to government procurement across major GCC markets.
Saudi Industrial Development Fund (SIDF) chief executive Prince Sultan bin Khalid Al Saud stressed that local manufacturing strategies must look beyond simple import substitution.
“The future of global tech will evolve,” Prince Sultan noted. “Rather than simply trying to catch up, we need to develop and invest in local capabilities — not only localising components, but building capabilities that put us in a forward-looking position.”
Over its 50-year history, SIDF has co-funded nearly half of Saudi Arabia’s industrial base through patient, long-term capital. However, funding decisions remain strictly market-driven.
“We evaluate the underlying commercial viability of each project... If a project does not provide a financial return, then by definition it is not sustainable, creating an opportunity cost for allocated resources.”
Dr Ahmed Al Sayed, Minister of State for Foreign Trade Affairs at Qatar’s Commerce and Industry Ministry, highlighted how recent global crises served as stress tests for Gulf economies.
“Localisation gives you more resilience and self-sufficiency, especially during different global events,” Dr Al Sayed said. “Producing locally provides the population with security, especially when it comes to basic needs like food and medicine.”
He also emphasised the growing momentum behind digital trade approvals, cross-border logistics, and joint projects targeting the GCC’s 60-million-strong market.
Gemma Stevenson, His Majesty’s Trade Commissioner for the Middle East and Pakistan at BIST from the UK, highlighted the potential of the upcoming UK-GCC Free Trade Agreement (FTA), projected to boost trade by 20pc.
“Coming into the UK provides GCC businesses with preferential access to a diverse, international market of almost 70 million people,” Ms Stevenson said. “The deal is projected to boost trade by 20pc... but an FTA is just a document unless businesses recognise and actively seize the opportunity.”
Ms Stevenson praised the GCC’s emergence as an innovation powerhouse, citing university spin-offs, high R&D investments, and IP-rich enterprises in metals, advanced materials, pharmaceuticals, and digital technology as ideal fits for global markets.
To ensure the Gulf’s industrial sector thrives globally, panellists agreed that member states must focus on scaling up investments in R&D, automation, AI, and Fourth Industrial Revolution (4IR) technologies to modernise local production.
At the same time, regional trade policies must be intentionally designed to be fully inclusive across all six GCC member states before pursuing broader global expansion.
Crucially, the region must capitalise on its core foundation by expanding high-margin downstream industries derived from primary aluminium, petrochemicals, and fertilisers, while leveraging shared regional infrastructure to establish truly frictionless, cross-border supply chains.
avinash@gdnmedia.bh
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