The man in charge of attracting foreign investment into Bahrain is not worried about one of the key issues associated with economic stability in the Middle East: political risk.
This is something the region has dealt with for a long time, Khalid al-Rumaihi, the chief executive of the Bahrain Economic Development Board, told CNBC Thursday. But he believes that the rewards outweigh the risks taken by investors.
"We have to be careful not to have a broad-brush when talking about the Middle East," Al-Rumaihi told CNBC's Hadley Gamble during the World Economic Forum in Davos, when asked about security concerns in the region. "You have to look at what are the dynamics of each of those regions."
"Politics and political risk has been a part of that region for years, it's nothing new and investors do a risk-reward trade-off," he said. "For the Gulf people have seen not just a region that is exporting oil but is transforming its economy. Vision 2030 in Saudi Arabia is a great example of that, and the opportunities that that will bring in terms of value chains that can be localized in the country. So I think it opens up huge opportunities in the country and the risk is not outweighing reward."
The GCC's smallest economy is looking to grow its technology, manufacturing and financial services sectors in particular, in a push to diversify its economy away from oil dependence. Its foreign investment inflows have shot up sharply in recent years, jumping by 114 percent between 2017 and 2018, according to the UN Conference on Trade and Development. Al-Rumaihi singled out major projects by Amazon Web Services, which is launching three new data centers in the country this year.
But Bahrain hasn't seen the same success as some of its neighbors in developing into a financial hub at the scale of Abu Dhabi or Dubai. It recently averted a debt crisis with the help of a $10 billion bailout from its Gulf Cooperation Council (GCC) neighbors, and has introduced reforms aimed at reducing public spending and government inefficiency. Its debt is currently a whopping 89 percent of its gross domestic product (GDP).