April 24, 2009

The global financial crisis has reminded us all that fundamentals matter in economics.That was the message from Economic Development Board chief executive officer Shaikh Mohammed bin Essa Al Khalifa to a group of overseas business journalists who are visiting Bahrain as guests of BNP Paribas."Here in Bahrain we have always seen growth in the financial sector as something that should be gradual and steady," he said."The Central Bank of Bahrain (CBB) has ensured that we take account of fundamentals and that the market is properly regulated."Bahrain has weathered the storm better than most places because of the steady regulation that the CBB has developed in partnership with the industry."

He said that a recent example of this was the decision to put out to consultation banks' exposure to the real estate market back in 2007."The banks worked in partnership with the financial institutions to see that they were transparent and not overexposed to one sector and that has worked in everybody's interest," he said."Bahrain, because of its strong regulatory system, is now benefiting from a flight to quality.""Growth must serve a purpose, it is not supply driven but demand led," he said."It is about investment in human resources and people. If growth in the financial sector is not benefiting the Bahraini people why bother with it in the first place."