Why Human Capital is Crucial to Economic Growth

Economic DevelopmentEducation

The Human Capital Index (HCI) by the World Bank is a great initiative as it draws attention to the key underpinnings that any country must have to enable an inclusive society that enjoys sustainable economic growth. The HCI report highlights Bahrain, among 157 countries being ranked, as the best-performing country when it comes to building and leveraging its human capital potential in the Middles East and North African (MENA) region.

This is testament to the country’s unprecedented reforms that have driven sustained investment in human capital and economic growth. Such investment is a core aspect of  what we call our ‘Team Bahrain’ approach – a successful economic model of public-private sector collaboration.

Bahrain scored 0.67 on the HCI, well above the global average of 0.57, spurred by its superior health and education performance. Education, training and healthcare have been key areas of investment in Bahrain for many decades and the results demonstrate the impact of these efforts.

Take education, the most important driver of a skilled workforce. Bahrain topped the regional league table for educational attainment. Increasing educational performance in the country is the prime foundation for Bahrain’s highly skilled workforce – in fact we have the highest skilled workforce in the Gulf Cooperation Council (GCC).

This is largely due to the investments made by Tamkeen, the public authority responsible for providing and promoting workforce training in Bahrain through their numerous programs. To date, Tamkeen has partnered with more than 170,000 Bahraini individuals and businesses.

The report also shows that the HCI numbers for women are slightly higher than for men in Bahrain, which signifies the country’s focus on gender equality. Bahrain was the first Gulf state to allow women into education in 1928. This has facilitated high female participation in the workforce, and as a result the Kingdom has been named the top country globally for closing its gender gap in education, the top country in MENA for female economic participation, and the top in the GCC for gender wage equality.

Other indicators that made Bahrain shine on the Index include low infant mortality. Clearly, a healthy population is not only a must for a happy society, but also fundamental for sustainable economic growth. With sustainability and innovation being the key drivers of the Kingdom’s Economic Vision 2030, Bahrain has recently announced a new ‘Health Insurance Law’. This law will help promote an integrated health system for Bahrain, based on a sustainable financing system that supports and attracts investment in both the health care and insurance industries.

Such efforts, along with the wide range of training and specialised institutions dedicated to support youth entrance into the workforce, have led to Bahrain having one of the most diversified national workforce in the GCC. Today, over 60% of the private sector employees are Bahraini. Major international companies such as DHL, BNP Paribas, Citibank and Amex have based themselves in the Kingdom to capitalise on the availability of such a highly-skilled workforce.

Bahrain recognises that improving the skills, health, and knowledge of the country’s population is crucial to the future development of our Kingdom, particularly as these assets are crucial to attracting investment from overseas. Of course, such investment is part of a virtuous circle, as foreign direct investment brings great opportunity for the sharing of skills and knowledge across markets. We look forward to working with all our partners to enable even greater Human Capital growth in the years ahead.

Khalid Al Rumaihi

Chief Executive, Bahrain Economic Development Board

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