Bahrain- E-economy Coming On Line 

(MENAFN - Oxford Business Group) Bahrain's information and communications technology sector is on the verge of a massive expansion, with flow on effects to ripple through the kingdom's entire economy as the government goes about changing the way it does business.

In the middle of 2007, the government announced it would be transferring many state functions on line, and established the E-government Agency to coordinate the initiative.

Under the strategy laid out by the government, more than 90% of all state transactions will be able to be carried out on line by 2010. The strategy identified 167 separate services that could be conducted electronically, of which some 50 are already up and running, with another 40 to be added by the end of 2008.

Bahrain has also recently struck an agreement with Microsoft to provide each of its citizens with a free e-mail account, ensuring locals can access the state's electronic services.

One of the key planks of the programme is putting state tenders on line. In the past, the slow pace and cumbersome nature of the government's tender process attracted criticism, something authorities hope will come to an end thanks to going on line.

Abdul-Hussain bin Ali Mirza, the chairman of Bahrain's tender board, who also serves as the country's minister of oil and gas affairs and chairman of the national oil and gas authority, said that around 2000 tenders are called annually by the state. Conducting these operations electronically will both automate the workflow of the entire process and open up a potentially lucrative and huge market for companies in the private sector, he said.

As such, "it is imperative for companies to be able to use new technology tools to get their fair share of the action," Mirza said at the launch of a new programme to provide training to private firms on the new e-tendering scheme on July 3.

"This initiative will expose Bahraini companies to new technology trends to streamline and simplify tendering processes, become more efficient, and lead them to embrace technology as a way to move ahead," he added.

Enthusiasm for on line services is ramping up, according to Sheikh Mohammed bin Mubarak Al Khalifa, Bahrain's deputy prime minister and chairman of the Information and Communication Technology Supreme Committee. Visits to the e-government portal have risen from 200,000 per month when the strategy was first launched to 1m a month, he told a conference on e-government in late May.

The policy being pursued by the Bahraini government is also a boon to the ICT industry, with the shift to electronic dealings meaning increased computer sales.

According to a report issued by London-based market analyst group Business Monitor International (BMI) at the end of April, $113m worth of computers were sold in Bahrain last year, a rise of $8m compared to the 2006 total. Software sales came in at $54m, a figure tipped to reach $84m by 2012. The shift to e-government, along with the expanding financial sector, were two of the main driving forces behind the strong sales growth, the report said.

The government's plans to electrify the way it does business is not just about speed and efficiency. By promoting the kingdom's e-credentials and the country's ICT sector, it is hoped more international companies in the industry will set up shop in Bahrain.

This policy is already meeting with some success, as testified by Microsoft basing its regional operations in the Kingdom and Germany's Software AG investing $62m in a research and development centre in Manama. However, Bahrain faces stiff competition in the region to become a major technology hub.

The Dubai Internet City (DIC), which currently hosts more than 800 companies, is one such rival, being the largest ICT centre in the Middle East, while the Paris-based business graduate school INSEAD last year opened its e-lab centre as a regional educational hub for the digital economy in Abu Dhabi.

Though having a number of firsts to its credit, including being the first country in the region to introduce 3G and 3.5G high-speed internet download services and to implement nationwide a WiMax wireless network, Bahrain is still ranked behind the United Arab Emirates and Qatar in the World Economic Forum's 2007-08 global information and communications technology readiness index. Despite this, the kingdom did move six places up the rankings, moving to 45th out of the 127 countries surveyed on the back of the government's increased ICT push.

This improvement, one of the biggest on the index, could be a sign of even better things to come for Bahrain's ICT sector and the e-economy.