A second Strategic Investment Partnership between Bahrain and the UK is in the works, after the first one signed in 2023 was deployed within 12 months, instead of the originally planned five years, the UK’s Investment Minister said.
Speaking during an exclusive interview with the GDN last night, Baroness Poppy Gustafsson also provided fresh insights into a potential UK-GCC Free Trade Agreement, expressing cautious optimism about finalising the deal ‘in the not-too-distant future’.
“Bahrain is a huge partner to us in terms of investment,” she added.
“Investment is about so much more than money. What you are saying is, ‘Believe in me, believe in my ambition.’
“We had the strategic investment partnership that was signed in 2023 where £1 billion (BD498.7 million) was going to get invested over five years.
“All of that got deployed in 12 months.”
Baroness Gustafsson arrived in Bahrain on Wednesday and departed last night, after meeting major investors, businesses and key government counterparts, including the Industry and Commerce Minister Abdulla bin Adel Fakhro as well as Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa and Sustainable Development Minister and Bahrain Economic Development Board (EDB) chief executive Noor Al Khulaif.
She also visited the Bahrain Chamber and met its chairman Sameer Nass, where she proposed the exchange of more trade delegations and called for increased co-operation in the areas of digital innovation and sustainable economic development.
“I’m really ambitious around the opportunity that artificial intelligence presents,” she noted.
“I know there’s some really interesting activity happening here in Bahrain around data centre provisioning.
“I would love to see the exchange of technology, ideas, and capabilities.”
The UK and Bahrain have a deep-rooted bilateral relationship spanning more than 200 years, and in recent years have seen significant growth in non-oil dealings.
Total bilateral trade between Bahrain and the UK was £967m (BD484.3m) in 2024, an increase of 7.7 per cent or £69m in current prices from 2023.
Total UK exports to Bahrain amounted to £750m (BD375.6m) and imports from Bahrain amounted to £217m (BD108.7m) in 2024.
In 2023, His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister, met Britain’s then-Prime Minister Rishi Sunak at 10 Downing Street, during an official visit to the UK, in order to announce the first UK-Bahrain Strategic Investment Partnership.
Within a year, sovereign wealth fund Mumtalakat, Investcorp, GFH Financial Group and Osool Asset Management deployed £1 billion (BD498.7m) in the UK economy, with a focus on clean technology, business services and manufacturing.
The memorandum – signed by Shaikh Salman and the UK’s then-Investment Minister Lord Dominic Johnson of Lainston CBE – also aimed to support the diversification of Bahrain’s economy.
Following the success of the investment agreement, at last year’s International Institute for Strategic Studies Manama Dialogue held in Bahrain from December 6 to 8, the UK also joined the US and Bahrain in the Comprehensive Security Integration and Prosperity Agreement (C-SIPA).
According to Baroness Gustafsson, financial services, technology innovation and artificial intelligence are key focus areas for potential collaboration. She sees immense potential in Bahrain as a strategic entry point for British entrepreneurs into the GCC market.
During her visit, she also highlighted local technology startups and digital infrastructure, saying it was an opportunity for British companies to invest and expand into new markets.
“We saw some incredible startups,” she said, describing the entrepreneurial ecosystem as ‘electric’ and ‘infectious’.
The minister is also pushing for a second phase of the Strategic Investment Partnership, wanting to maintain the successful framework that enabled the rapid initial deployment.
She emphasised maintaining consistency while potentially expanding the partnership’s scope.
Addressing potential concerns about political stability in a rapidly evolving global economic and geopolitical landscape, the minister pointed to the UK government’s current stable majority and noted that ‘UK is able to absorb shocks’, positioning the country as a reliable investment partner.
When asked about the UK-GCC Free Trade Agreement, which has been in the process of negotiations for nearly three years now, she was ‘cautiously optimistic.’
“I’m speaking to our team, encouraging them to try and get that over the line,” she added.
“We’ve just done a UK-India Free Trade Agreement and a UK-US agreement. It’s amazing what a difference it makes in catalysing trade investment opportunities.”
Baroness Gustafsson’s visit “comes as UK-GCC FTA negotiations are progressing at pace,” a press statement from her office had previously noted.
“A successful deal will deliver targeted growth that could increase bilateral trade by 16 per cent, potentially adding an extra £8.6bn (BD4.3bn) a year to trade between the UK and GCC countries in the long run.”
naman@gdnmedia.bh
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