US embassy cable - 04MANAMA1660

UNCLAS MANAMA 001660 
 
SIPDIS 
 
DEPARTMENT FOR NEA/ARPI AND EB/CBA DENNIS WINSTEAD 
STATE PASS TO USTR JASON BUNTIN 
 
E.O. 12958: N/A 
TAGS: PREL, ECON, EINV, BA 
SUBJECT: The Bahrain Financial Center - If you build it, 
they will come. 
 
1. (U) Summary:  On October 17 the Ambassador visited the 
Bahrain Financial Harbor (BFH), a USD $1.3 billion 
project to develop a mini-city of luxury offices and 
apartments targeted at the financial services and 
insurance sectors.  The BFH is seen as a complement to 
GOB efforts to promote Bahrain as an international 
financial hub.  Investors and the GOB are banking on the 
Bahrain Monetary Agency's solid reputation as a regulator 
to beat regional competition to attract investment from 
overseas financial services firms.  End Summary. 
 
2. (U) The Ambassador, accompanied by EconOff and 
EconFSN, visited the $1.3 billion BFH project on October 
17 for a project tour and multimedia presentation hosted 
by the chairman of Islamic investment bank, Gulf Finance 
House (GFH) Esam Janahi. Also present were Esam's uncle 
and lead designer/consultant for the project, Ahmed 
Janahi, and several other BFH officials.  The visit was 
covered in both English and Arabic newspapers.  The 
articles also highlighted the U.S.-Bahrain Free Trade 
Agreement (FTA). 
 
3. (U) According to its designer, the BFH responds to the 
need for a modern work environment with top of the line 
business services as well as luxury housing and 
amenities.  It sits on reclaimed land on the coast west 
of downtown Manama.  The project includes both living and 
working space, a marina and space for a dhow port, as 
well as plans for a concert hall.  The first phase, 
planned for early 2007 and now ahead of schedule, 
includes two 53-story twin towers of office space; a 
"Financial Mall" which will house the Bahrain Stock 
Exchange as well as other brokerages, exchange bureaus, 
and consumer banking outlets; and a "Harbor House" that 
is designed to host specialized media firms and other 
financial sector support enterprises.  The three 
projects, a $250 million investment, will act as the 
centerpiece of the BFH. 
 
4.  (U) The BFH is seen by its investors as a complement 
to GOB efforts to promote the country as an international 
financial hub.  However, rather than targeting only 
larger institutions that might already have a regional 
presence, the BFH strategy is to attract mid-size 
financial institutions seeking to expand into new 
markets.  Investors believe the FTA will help market the 
BFH to this class of firms in the U.S.  The Ambassador 
stressed that while the FTA is an important framework for 
expanding commercial ties, it is the private sector that 
must take the lead in ensuring implementation is a 
success.  Esam Janahi agreed and highlighted the need to 
encourage new and innovative business ideas and projects 
like the BFH to help make Bahrain a more attractive 
investment destination. 
 
5.  (U) The Ambassador raised the issue of stiff regional 
competition, particularly from Dubai, and asked if 
Bahrain would be able to attract the number of firms 
required to make the BFH a success.  Janahi acknowledged 
there was room for concern, but underlined that the 
regulatory reputation of the Bahrain Monetary Agency 
would continue to draw financial institutions to 
establish their base of operations in Bahrain. 
 
MONROE