Simon Galpin is back and his Hong Kong experience is serving him well in Bahrain. The similarities suggest that they could be collaborators – or competitors.
Photo: Mr Galpin (fifth from right) with Bright Hong Kong (Credit: Bright Hong Kong)
“I’ll be back!”
Schwarzenegger-esque, Simon Galpin promised Harbour Times last December “Although I will be away for a couple of years, I consider Hong Kong to be my home – and I’ll be back!”
True to his word, the former Director General of InvestHK is back, now as the investment champion for Bahrain. The Managing Director of Bahrain’s Economic Development Board visited to launch the Gulf country’s economic development office in Hong Kong. Bahrain could be a partner for Hong Kong – or a competitor.
Oil important, finance crucial
Some day the oil will be gone. All of it. With an eye to that future, Bahrain aims to strengthen economic diversification with a focus on financial services. Galpin claims the country has all the potential to become an important strategic partner along the Belt and Road initiative for China and Hong Kong.
“Bahrain was known for being the first in the GCC in many areas: We are the first in the GCC to discover oil, to introduce education for women and to have a big airline, Gulf Air. It’s very much a leader in financial services as well,” he says. “Our challenge now is to show that many of the strengths and advantages that Bahrain had in the 70s, 80s and 90s are just as important today, but there are some new developments that we would like people to consider when they are looking for [investment] locations.”
Notable developments include a major airport expansion, a new light rail system, an upgraded oil and gas industry and aluminium smelter, as well as private-funded tourism-related and residential projects.
“Compared to Dubai, which is a very strong competitor, Bahrain has been a little bit modest in [promoting] some of its strengths and advantages in the past and we need to do more to promote Bahrain more aggressively,” Galpin explains. “The other thing is that many people assume that Bahrain is similar to Saudi Arabia, but it’s actually a very open and tolerant society. You have restaurants that sell alcohol and workplaces are women-friendly. In most GCC countries you need to have a local partner. But the Bahrain government have recently approved a new law that allows foreign investors to acquire 100% business ownership. We don’t charge corporate tax and income tax for foreign companies. We also score very highly in most expat quality of life indices. In terms of cost competitiveness, we can be 20% to 40% cheaper than Dubai in most areas, whether it’s expat living costs, cost of running a financial service institution and manufacturing.”
According to the Hong Kong Trade Statistics by the Census and Statistics Department, Hong Kong’s total trade with Bahrain reached US$139.4 million in 2015 with an annual growth of 22.8%. Bahrain has also concluded an investment promotion and protection agreement with Hong Kong, with the negotiation on a comprehensive double taxation agreement underway.
“Bahrain is about the size of Hong Kong Island. The two places also have a much bigger neighbour that plays a very important role in the domestic economy. Similar to Hong Kong’s role for the greater China market, Bahrain serves as a useful gateway to the GCC but also to Saudi Arabia.”
Having worked in Hong Kong for over 20 years, Galpin was excited when explaining how Hong Kong’s success, or rather his success in promoting Hong Kong, can serve as a role model for Bahrain. But when he talks about Bahrain’s strengths, the emirate begins to sound like a new competitor for startups and fintech business..
“An area which I’d like to replicate a little bit of what Hong Kong has been doing is that we see tremendous potential to grow the startup ecosystem in Bahrain. Bahrain is a little bit like Hong Kong five years ago, just before we have the boom and startups opening up all over Hong Kong. We’d like to transplants some of that learning from Hong Kong to Bahrain, and that means encouraging some of the accelerators that have grown up in Hong Kong to consider Bahrain too.
The key thing that interested me most in my job in InvestHK was the phenomenal growth of the startup scene, and it’s fascinating to see how quickly Hong Kong has emerged as one of the best startup hubs. And it’s mostly private sector-led with a specific focus on Fintech. That’s why when we have chosen to expand our overseas network, Hong Kong is top of our list.”
Cost and policy lethargy may put Hong Kong at a disadvantage to the nimble Kingdom.
“Cost is however an issue. Hong Kong is not a cheap city. It’s not necessarily easy for people to do manufacturing here. The political system here means that some decisions do take quite a long time to get through; that can put Hong Kong in a disadvantage when other economies are able to make major economic policy decisions quickly.”