December 2, 2008

Bahraini Economic Forum in Moscow

Moscow, Ritz-Carlton Hotel. December 02, 2008

For the first time Moscow has been chosen as a host for the meeting of the Russian and Bahraini business circles. The meeting, dubbed as the “Economic Forum. Bahrain” was held on December 02, 2008 during the visit of the King of Bahrain H.H. Hamad ibn Isa Al Khalifah to the Russian capital. The representative delegation that included bankers, entrepreneurs, officials from the Chamber of Commerce and Industry of Bahrain and heads of key national companies was lead by H.E. Dr. Hassan Bin Abdulla Fakhro, Minister of Industry and Commerce of the Kingdom of Bahrain. The meeting was honored by the presence of the Ambassador Extraordinary and Plenipotentiary of the Kingdom of Bahrain to Russia H.E. Abdulhamid Ali Hassan Ali and the representatives from the Kingdom’s diplomatic mission in Russia.

Dr Hassan Bin Abdalla Fakhro addressed the audience with a speech and said he hoped that the visit of the Bahraini delegation, which aimed at looking for new possibilities of cooperation between the two countries would be successful. Dr. Fakhro indicated that wide possibilities for cooperation are open for Russia and Bahrain, however at present the trade turnover between the two countries was rather insignificant. H.E.Minister of Industry and Commerce outlined the current economic situation in Bahrain and noted that there was a potential for development of cooperation in many spheres, including energy, space exploration, nuclear studies, etc. Dr. Fakhro concluded his speech by outlining his expectations of bilateral cooperation in the field of conventional and Islamic banking, noting that the Kingdom of Bahrain is the largest financial center in the Arabian Gulf.

The Bahraini delegation was welcomed by Deputy Minister of Economic Development of the Russian Federation Mr. Stanislav Voskresensky who made a report on the present-day economic situation in Russia and the existing system of regulation for currency transactions. He noted that the difficult situation in the world’s financial sphere was not only a motivating factor for overcoming the difficulties, but also a range of new possibilities for interaction. Deputy Minister noted that the Russian Government was planning to increase investments into the infrastructure of the country in order to cut the expenses. Besides, Mr. Voskresensky noted that there are interesting projects that could be attractive for foreign investment and voiced hope that the Russian-Bahraini cooperation would develop more rapidly and that the representatives of the business circles from the two countries will find more spheres of mutual interest.

The members of the Bahraini delegation presented the activities and interests for cooperation of their companies. These presentations covered the following:

• Bahrain Economic Development Board – Mr. Kamal Ahmed, Chief Operation Officer
• Bahrain Ministry of Industry and Commerce – Mr. Osama Al Arrayedh, Acting Undersecretary Industry Affairs
• Central Bank of Bahrain – Mr. Abdulrahman Al Baker, Executive Director
• Bahrain Mumtalkat – Mr. Mahmood Al Koohaji, Deputy CEO
• Aluminium Bahrain (Alba) – Mr. Mahmood Koohaji, Chairman
• Al Zayani Investments
• Baytik Industrial Investments – Mr. Nader Al Moayyed
• BFG International (Fibre Glass) – Dr. Samer Al Jishi
• Istithmar Bank

The representatives of the Russian companies participating in the event were also keen to present their companies and seek cooperation opportunities. These presentations included:

• SISTEMA Joint-stock Financial Corporation – Mr. Sergey Cheremin, Senior Vice-President
• Sistema Hals Development Company – Mr. George Frolov, Vice-President
• Confael Confectionary Company – Mrs. Irina Eldarkhanova, Chairman of the Board

Mr. Vladislav Lutsenko, Director of Arabia-EXPO reported on the success of the First Arab Exhibition in Moscow and invited the participants in the Forum to take part in the next Arabia-EXPO exhibition, planned to take place in May 2010.

The main vectors of investment strategy in Russia were outlined by Mr. Anton Danilov-Danilyan, the Chairman of the Investment Policy Board within the Chamber of Commerce and Industry of the Russian Federation.

The considerable attention was given to the cooperation in the field of banking. Mr. Khaled Janahi, the Chairman of the Istithmaar Bank noted that there was a long-felt need to create a Russian-Bahraini Bank and that the situation was favorable at present to proceed with its creation. Mr. Janahi noted that because of the world financial crisis many banks had been offered for sale, and Russia was not an exception. However it seemed more convenient to create a stand-alone bank, rather than acquire an existing financial institution. As the Kingdom of Bahrain is a world-famous center for both traditional and Islamic banking, it was apparent that such a bank should benefit from from the Bahraini expertise. Nevertheless, the bank would be created in Russia with a branch in Manama, and not vice-versa.

The negotiations in the field of banking lead to signing of the first Russian-Bahraini agreement in the financial sphere – the memorandum of partnership between the “Bank For Development And Foreign Economic Affairs (VNESHECONOMBANK)” State Corporation and the Bahrain Development Bank. Mr. Peter Fradkov, Deputy Chairman of the Vnesheconombank who also acts as Deputy Chairman of the Russian part of the Russian-Bahraini Business Council put his signature on behalf of the Russian side. After that, Mr. Fradkov delivered a speech in which he underlined the importance of the signed agreement for the bilateral trade and economic relations. This agreement, according to Mr. Fradkov, should contribute to increasing the trade turnover between the two countries that is “unacceptably low” at present. Mr. Fradkov added that “there is a large potential in the development of banking cooperation, and it is the world [economic] crisis that emphasizes the importance of bilateral contacts”.

This approach was fully shared by Mr. Nidal Alawjan who signed the Memorandum on behalf of the Bahrain Development Bank. Mr. Nidal noted that during meetings held within the visit of the high delegation from Bahrain it became outlined positive indicators for the firm establishment of bilateral contacts. The representative of the Bahrain Development Bank voiced optimism concerning the development of these contacts. According to his opinion the continuing recession in the world economy should not be treated as a holding factor for development, and the current period of “economic correcting” should change to growth once again.

The participants in the Forum agreed that there were lots of opportunities for the development of trade and economic cooperation between Russia and Bahrain. As the trade turnover was considered to be rather low at present, it was necessary to promote efforts for bilateral dialogue and develop relations between companies working in different spheres, including aluminum industry, construction, real estate, banking, and investments. The Forum also emphasized the intention to support cooperation on the level of small and medium-sized businesses in the two countries.