Huge potential for imports substitution: Senior economist

Manufacturing has great potential for a greater role in diversifying economies of the Middle East and North Africa (MENA) countries, a senior Bahrain-based economist said in comments relevant to holding the MENA Industrial Summit 2016 in Bahrain.

“Manufacturing has huge potential not only for new value creation but also innovation and R&D, which can sustain its development going forward. The sector can drive job creation and export diversification. A developed manufacturing base will in turn encourage the provision of related services from consultancy to education and training,” Dr. Jarmo Kotilaine said. 

MENA Industrial Summit 2016 is a high-caliber event that will highlight the importance of the industrial sector as an inevitable development sector and a corner stone to diversify the economies of the MENA region.

The summit will be held under the theme “Towards a Sustainable Industrial Sector in the MENA region”. Convening for two days, it will create a platform to exchange views, expertise, and knowledge in the sector and the latest strategies and solutions adopted globally. 

Participants will brainstorm 11 industrial-related topics and causes, and put recommendations on them in six different Panel Discussions and Focus Group sessions. Topics in Day One include Future of Manufacturing, Sustaining Workforce in the Industrial Sector, Industrial Integration between MENA Economies, and Industrial Parks in the MENA region. Full details on the Summit are available on the website: www.menasummit.org.

I believe manufacturing industry will remain a highly dynamic part of the regional economy for a whole host of reasons, said Dr. Kotilaine.

“Manufacturing is one of the most logical ways for the region to extract more value from its natural resource endowment, most notably hydrocarbons. Many regional economies have emphasized this opportunity in their development plans, he added.

He said the region has significant untapped opportunities in terms of capturing more of the value chains related to existing activities. 

“For instance, primary manufacturing is well developed but more value can be created by encouraging more downstream activity. Moreover, downstream activities tend to be more labor-intensive. The plans to align Alba’s expansion with a downstream cluster are a key case in point and promise considerable opportunities for added sustainable value creation and export diversification.”

Day Two of the Summit will witness two Panel Discussions on “Diversification of MENA Economies” and “How Developed Are Downstream Industries” in the region.

“There are many areas where the region can encourage more import substitution. The reliance on exports is heavy in many areas where some local production could be developed. Finished metal products are a case in point,” said Dr. Kotilaine.

“The region has become an important logistics hub by capitalizing on its location at the crossroads of 3 continents. Developing light manufacturing around the logistics infrastructure is likely to be an important opportunity,” he said.