Cablegate: The Bahrain Financial Center - If You Build It,

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A
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.


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