Bahrain fourth richest in the Arab world

20 Dec, '07

According to The Peninsula newspaper quoting the Qatar National Bank, the current rich-ranking in the Arab world goes like this:

The country’s per capita income is projected to hit a whopping $63,262 (QR230,000) this year as per estimates issued by Qatar National Bank (QNB), which in turn was quoting figures given by the General Secretariat for Development Planning (GSDP).

The $63,262 figure is all the more eye-catching considering per capita income was around $40,000 as recently as 2004.

The UAE trailed Qatar by some distance with an estimated $42,427 in per capita income. Kuwait was the third-richest followed by Bahrain, Saudi Arabia and Oman. Outside the GGC region, the pace-setters were Libya, Algeria, Lebanon and Jordan.

Qatar’s GDP is set to grow by another 16% this year according to the report.

At a glance then, we surpass both Saudi and Oman! Right on. Seeing the various huge projects on the island certainly gives credence to these numbers; the story though is much more complex, I should imagine. For instance, the vast majority of projects announced and in progress in Bahrain promise revenues not to be seen by the normal Bahraini on the street. In fact, judging by the new census statistics by the august CIO which puts the number of souls on these islands to more than a million [translation], the first time in history, and which state that half of the population are actually foreign workers, then it doesn’t take an Einstein to determine that a huge chunk of that money being created gets sent abroad, while the even larger chunks of profits are pocketed by very very few people at the top of the pyramid.

True, it should be easy to make money in this burgeoning environment. The fact remains; however, that we are not equal regardless of the level of tenacity and creativity we possess. Even if we are fortunate enough to make some money, judging by the astronomic property prices and the ever rising cost of living, it is only a select few who will be able to afford even a moderately sized comfortable accommodation; thus, by definition, shrinking the middle class even further.

So being the fourth richest of 22 countries and very highly ranked in the world as well, is not an indication of contentment. In fact, the widening gap between the rich and the poor coupled with the shrinking middle class will continue to sustain the feelings of resentment between these layers as we have already been experiencing over the last few years.

I think that the only way to redress the balance is for the government itself to take a real initiative in which it promotes inclusiveness and fairness in the distribution of wealth. Without societal justice as a basis, conflicts and demonstrations will unfortunately become the norm.

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Comments (20)

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  1. Yousif says:

    I think the Qatari press have it wrong again. The ranking of each country differs according to the where the data is sourced from. Data sourced from international bodies such as UN will ofcourse have far more credibility.

    That said I would question the accuracy of GDP/per capita as an indicator of national economic success or quality of life & living standards!!!

    The table below includes data for the year 2006 for all 180 members of the International Monetary Fund

  2. Abdulkarim says:

    I agree with Yousif in questioning the accuracy of GDP / per capita as an indicator of economic success or quality of life. However, it is a one indicator out of many, is widely referred to and gives a good though not perfect picture.

    A good indicator would be that of the UN which lists countries on quality of life and takes many issues in account such as economic well being, health care, environmnet, education, crime and so forth. The last time I saw it Norway, Australia and Canada were in the top. I do not recall seeing an Arab country in top 10.

    It is clear what Mahmood means. Bahrain is certinly not the 4th richest in the Arab world. The likes of Egypt, Saudia Arabi and Algeria are far richer. A more appropiate title would have been “Bahrain 4th highest GDP / per capita in the Arab World”

  3. mahmood says:

    True enough Yousif and Abdulkarim. That is indeed what I meant and am glad that it was understood.

  4. Abdulkarim says:

    Mahmood,
    Having agreed on one thing at least and that is the shortcoming of the per capita indicator the truth of the matter remains that Bahrain has a high living standard indeed. Look at the statistics; low infant mortality, good health care, free universal education, low crime rates and high life expectancy at birth. The last is in excess of 76 years which I beleive is at par with those of the most developed countries in the world.

    I think Bahrain has never had it so good throughout its long history.

  5. Aliandra says:

    You may have a few very very rich people, which would be inflating the overall number. Bahrain has a small population compared to other countries.

  6. mahmood says:

    Abdulkarim, you and I know that the metrics you mentioned are indeed correct, but they do not reflect the real picture; else, we would not have the continuous running battles immediately anything slightly out of the ordinary happens.

    The basic problem we have here is the absence of social justice, which gives rise to discrimination, sectarianism, nepotism and all the other -isms we know and experience every single day.

    The sad truth is that this has given rise to a polarised society in which neither the ruled nor the ruler is prepared to give the other side the benefit of the doubt; thus, make an honest attempt at solving the intrinsic problems.

    How long do you think we can live like this? I would not be surprised at all that the people in the middle who probably represent the majority will soon shirk both sides and do something drastic to get away from this quagmire.

  7. John says:

    i am not sure this is cause for any celebration when you consider that in the Arab world, a high income is not related to a country’s smarts, but its oil and gas exports, while in most other countries of the world, high income is linked to productivity, creativity and hard work.

  8. Abdulkarim says:

    Yes it is true and sad Mahmood that not everybody is enjoying the fruits of prosperity and some have been left out.

    Poverty breeds contempt and violence. One of the things that the government could do is to provide income support for those who have fallen behined. No I do not mean using the oil surplus revenues for that. That would be wrong. Rather if only the government is more discriminatory in who gets its subsidies then the resulting savings could be directed towards income support. That should be enough to eradicate poverty in Bahrain and there could still be some change left.

  9. ammaro.com says:

    GDP doesn’t tell you anything about the average person on the street. What it does tell you, however, is how much the whole country is raking in, divided by the number of people. Bahrain is doing well in terms of GDP. It is producing, it is providing services, and it is growing. Extremely fast, mind you.

    The fact that this growth and wealth is not equally divided between the people is not displayed through these figures, however, and neither is it meant to give you an idea of how rich/poor the average person is.

    Anyhow; fair distribution of wealth. A pretty big topic, one that requires severe changes to the current environment. We’re all very aware that the wealth exists, but to re-organize the how it is shared requires new policies, governing bodies to oversee and implement them, and a complete clamp down on corrupt officials, of which seem to be all around. We’ve been seeing a lot of talk about this, but so far, nothing tangible. Makes you frustrated to be a Bahraini.

  10. milter says:

    Well, it’s nice to see that Bahrain is doing well.

    However, a few people are mentioning the fact that only a small part of the people of Bahrain are enjoying the benefits of this growth in GDP.

    To the great majority it just means higher cost of living. How about replacing some of the cheap workers from India, Pakistan, Bangladesh, The Philippines etc, with local workers?

    That way a lot of the money would stay in Bahrain, too.

    And, on top of that, how about introducing some sort of income or property tax?

    I know some of those suggestions may be considered close to blasphemy but that’s the way it works in other parts of the world.

  11. Abdulkarim says:

    Milter
    I for one would support the introduction of income taxes. Taxes, unpopular they may be, have huge benefits. In fact the rest of the world can not function without them.

    I would also support the idea of making guest workers more costly. It would not only make employing Bahrainis more popular but it is a human thing to do. Guest workers are fellow human beings and they should be treated right and paid right.

    I however, disagree with the concept of higher growth meaning higher inflation for the majority. That is imply not true. First of all there is no correlation between the two, not necesserily anyway. Secondly, there has been much talk about inflation in the Gulf. Most data, and this is scare I must admit, show inflation rates in single figures. That is not low but it certinly not high.

  12. milter says:

    Abdulkarim,

    I agree, growth doesn’t necessarily have to be followed by inflation, however, increases in the value of property on the scale of Bahrain’s usually have an effect on consumer prices after a while.

  13. Abdulkarim says:

    Yes Milter that is true.

    Property prices in Bahrain have gone up through the roof. 5 times or so for most properties I would say over the past 6 years or so. That is increadiable and surely it has fed into the general rate of inflation. One thing however, that many people overlook is that property prices remained stable if not falling for the previous 10 years or so. So over a 20 years period the property inflation was about 10% a year. Now that is not so big an increase.

    On the other hand you had many items experiencey a fall in the prices over the same period both in real and relative terms. Think of white goods, electronics and everything Chinese!

    On top of this you have rising incomes. So that only makes it clear why I repeated above the famous words of a Bristish Prime Minsiter who said ” you never had it so good”. Yes I would say Bahrain never had it so good.

  14. milter says:

    Abdulkarim,

    You wrote:

    So over a 20 years period the property inflation was about 10% a year. Now that is not so big an increase.

    That depends on what you compare it to. To most economists an annual increase in the price of anything of more than 3-5% is alarming.

    I agree that property has gone up in value by more than 3-5% annually in a lot of countries over the last 20 years but, the side effects of that can only be regulated if there is a very stong link between the general cost of living in a country and salaries of the people that live and work there.

    Somehow I have a feeling that the poorer part of the population of Bahrain and foreign workers there have not benefitted from the increase in the price of property there. I hope you will correct me if I’m wrong.

  15. Abdulkarim says:

    Yes Milter you are right. It is alarming but I was comparing the long term 10% annual increase with the 100% short term annual increase.

    Those poorer residents in Bahrain who did not get into the property ladder have lost out. They probably will never be able to afford to own their own houses now that property prices have reached to almost astronimical figures on the island. In fact, it is difficult to find a Bahraini who does not regret not buying the property next door few years ago for its price has gone up by 5 years or even more since then.

    I do not have figures to substantiate my claim but I think housing in Bahrain now is relatively more expensive than in many other places in relative terms.

    The good thing here however, is that we have social housing whereby the government builds low cost housing to those less fortunate. Sadly, the waiting time could be long. The other good thing is that the mortgage market is developing fast and many banks now offer 20 even 30 years loans something that was not available few years ago. This should make it possible for middle class people to buy while leaving the government to provide for the poorer people only.

  16. Johnster says:

    GDP per capita — but is the ‘capita’ the total population of Bahrain which is now close to a million (although they would never admit it) or is it just Bahrainis?

  17. Abdulkarim says:

    Johnster,
    GDP per capita takes account of all residents regardless of their nationality.

    Whom do you mean by saying they will never admit it? If it is the government that you mean well then you are wrong for the government (was it last week?) that said that the population of Bahrain was in excess of 1 million by some 50,000. This is higher than your figure.

  18. J says:

    And it is the government’s fault that this pool of wealth is not distributed to the majority of bahraini citizens!

    when the head of the government owns islands some bahraini families live in a wooden shack! what a farce!

  19. Johnster says:

    Abdulkarim

    Yes, point well taken, I learnt this yesterday. Thanks for correcting my error

  20. Yeah says:

    J, I think you’re right about that. I was on the island back in ’03 for a short stay. I found there to be two major nice highways with well planned areas around them, and some other nice areas with huge houses behind concrete walls and metal gates. The majority of the country seemed run down with roads and homes that you wouldn’t even see in neglected parts of East African countries such as Sierra Leone. Keep in mind, in 3 hours, we had covered most of the country in our little rental car that we got from Oscar.

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