Bahrain has been one of the Gulf's most important commercial crossroads for over 4,000 years. The word Bahrain means 'two seas' in Arabic, indicating how the country's geographic position, as a collection of islands, has been important throughout its history.
Over the past century, Bahrain has led the Gulf in many different areas, from oil exploitation to finance and education. By the mid-19th century, the country was the Gulf’s pre-eminent trade hub, emerging as a modern state. Bahrain was also the first Gulf state to discover oil, in 1932, and in the past 40 years has led the regional transition to a modern economy. Subsequently, as the first Gulf state to move away from dependence on oil, Bahrain has become the one of the region's most diversified economies. Bahrain has led the way in the Gulf States' on-going efforts to educate and up-skill their national workforce, and was the first country in the region to introduce a public education system in 1919.
This history as an international hub was an important element in the evolution of the Kingdom as a regional financial centre more than forty years ago and its emergence as the region’s main Islamic finance centre. There are 23 Islamic banks and 8 Islamic insurance companies in Bahrain whose assets under management total $24.6 billion (July 2014). Islamic banks now account for more than 13% of total banking assets in the Kingdom, reflecting their importance to the sector.
Alongside this cluster of businesses, Bahrain is also proud to be home to a number of organisations committed to the development of Islamic finance, making it a content and knowledge hub for the industry. Among these institutions are the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the International Islamic Financial Market (IIFM), the General Council for Islamic Banks and Financial Institutions (CIBAFI), the Islamic International Rating Agency (IIRA), the Thomson Reuters Global Islamic Finance Hub, and Deloitte’s Islamic Finance Knowledge Center. The country has also hosted the World Islamic Banking Conference for 20 years, with the 21st annual conference having been held in December 2014.
Bahrain is the natural gateway to the Gulf, a market now worth $1.6 trillion, with particularly favourable access to Saudi Arabia. It is the ideal business hub in the region, due to its strategic location, excellent transport network, and reputation for strong business and cultural ties with its neighbours.
The Kingdom enjoys one of the most unrestricted markets in the region, allowing businesses to operate freely, with minimal red-tape and foreign ownership restrictions. In fact, the Kingdom was ranked 13th in the world and first in the MENA region in the 2014 Index of Economic Freedom report, compiled by the Heritage Foundation.
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