At only 290 square miles, the Kingdom of Bahrain is the third-smallest country in Asia, measuring only one-fifth the size of Rhode Island.
Even so, this tiny oil-exporting nation wedged in between Saudi Arabia and Qatar boasts one of the Persian Gulf’s leading logistics and shipping hubs. It also hosts the US Fifth Fleet, and two years ago it grabbed headlines by normalizing relations with Israel under the Abraham Accords.
And now, Bahrain is set to make history again. For the first time since its establishment in 2004 by the National US-Arab Chamber of Commerce, NUSACC’s “Ambassador of the Year” award will go to a Bahraini diplomat: Shaikh Abdulla bin Rashid Al Khalifa.
Each year, NUSACC selects an Arab ambassador here to receive the accolade in recognition of outstanding contributions to US-Arab commercial relations. Al Khalifa will receive the award Dec. 8 during an invitation-only ceremony at Washington’s Ritz-Carlton Hotel. The luncheon, by the way, also marks one of NUSACC’s first in-person events since the onset of the pandemic.
“Shaikh Abdulla has been a great friend of our chamber over the years,” said David Hamod, president and CEO of NUSACC, which claims 50,000 members and bills itself as the “voice of American business in the 22 countries of the Arab world.”
“We are pleased and proud to recognize the extraordinary work that he has done in the United States on behalf of the Kingdom of Bahrain,” Hamod said. “Few ambassadors have traveled as extensively in the USA as he has, building bridges at all levels, in government circles, within the business community, and with civil society. The partnerships that he has formed will positively influence Bahrain-US relations for decades to come.”
In an extensive interview with The Washington Diplomat, Al Khalifa attributed his award to two factors: Bahrain’s dramatic uptick in bilateral trade with the United States, and its success in creating a business-friendly environment through various reforms and investment initiatives.
US-Bahrain trade to hit record high in 2022
In 2021, Bahraini non-oil exports alone came to $1.3 billion and non-oil imports totaled $740 million; by the third quarter of 2022, total trade had already surpassed $2 billion.
“Since we only have one more quarter to go, that will be a historically high trade figure,” said Al Khalifa. “It seems like the US is now the No. 1 export destination outside the immediate region. This is mainly because Bahrain’s operating costs are reasonably competitive, and US companies that have worked in Bahrain have benefitted by basing their operations here.”
While oil and gas still make up 85% of Bahrain’s budget revenues, its hydrocarbon wealth is limited, forcing the kingdom to diversify into banking, logistics, heavy industry and tourism. In fact, Bahrain’s skyscraper-studded city, Manama, is today a main banking hub for the Persian Gulf and a center for Islamic finance.
Overall, Bahrain’s economy grew by 6.9% in the second quarter of 2022—the fastest in 11 years—reported The National. The Abu Dhabi-based news outlet said that was driven by strong performance in the country’s non-oil sectors targeted under Bahrain’s economic reform plan.
Al Khalifa, 42, has been Bahrain’s top envoy in DC since June 2017. No stranger to the United States, he earned his bachelor’s degree as well as an MBA from Boston’s Bentley University, as well as a certificate from Harvard’s Kennedy School focusing on innovation in governance.
“A very long time ago, I went to school in Boston. That really left a mark on me,” said Al Khalifa, an ardent Red Sox fan who speaks impeccable English and exudes an obvious love for the United States.
In 2010, he was named governor of Bahrain’s Southern Governorate, by far the largest of the country’s four governorates. As such, he launched a partnership with the US nonprofit organization DARE to develop an anti-violence and anti-addiction program run by police officers in elementary and secondary schools. The initiative would later be transformed into a national program sponsored by Bahrain’s National Anti-Drug Committee.
Among other things, Al Khalifa, a former vice-president of the Asian Shooting Confederation, served for nine years on the Bahrain Olympic Committee. He’s also a past-president of the Asian Bodybuilding Federation.
New initiatives boost Bahrain’s regional competitiveness
When it comes to the United States, Bahrain clearly punches above its weight—and has done so ever since the landmark US-Bahrain Free Trade Agreement took effect in 2006. Its top export commodity to the US isn’t crude oil but aluminum, thanks to the fact that Bahrain is home to the world’s second-largest aluminum smelter, with annual capacity of 1.6 million metric tons. US exports to Bahrain are led by aircraft, machinery and motor vehicles.
Other recent accomplishments include the following:
*Inaugurating the Bahrain Global Sea-to-Air Hub in October 2021 between Bahrain International Airport and Khalifa bin Salman port. The aim is to cut transit time by 50% compared to pure sea freight, and costs by 40% compared to air freight only.
*Establishing a 110,000-sq-meter US Trade Zone near the airport that Al Khalifa said “will give US companies a competitive edge over any other country that’s trying to set up a footprint in Bahrain.” Eventually, the trade zone will cover 1.1 million square meters. Companies operating there will be exempted from customs duties for manufacturing, imported raw materials, construction machinery and spare parts. So far, the only US firm in the zone is Chicago-based Mondelez International—makers of Oreo cookies, Toblerone chocolates and other snack foods—but Al Khalifa hopes more will follow.
*Creating business-friendly visas. Earlier this year, Bahrain introduced a Golden Residency visa aimed at attracting fresh talent and investment. Renewable indefinitely, it gives holders the right to work in Bahrain, residency for close family members and unlimited entry and exit. This follows the introduction in 2020 of Bahrain’s 10-year multiple entry visa, which allows US passport holders to come and go easily.
*Winning coveted Global Entry status for Bahraini citizens. The US Customs & Border Protection program allows expedited clearance for pre-approved, low-risk travelers. This new status, approved in July 2022, makes Bahrain the 14th country in the world with Global Entry access—and the only one in the Middle East or North Africa (MENA).
*Adopting a Cloud-First policy. In 2019, Amazon Web Services opened a hub in Bahrain—the first of its kind in MENA—to provide cloud computing services. The move boosts local investment in ICT, a critical sector for capacity-building among Bahraini young professionals. In addition, consistent with the country’s Cloud Computing Services Law, Bahrain has granted US sovereignty over data stored in Bahrain-based data centers of US beneficiaries.
*Promoting freedom of navigation. In August 2019, Bahrain became the first country in the Gulf region to join the US-led International Maritime Security Construct. The goal: to promote freedom of navigation in the region, which is integral to maintaining the free flow of global trade.
“We wanted the fastest regional multimodal hub in the Middle East,” Al Khalifa said, noting that this past March—during the US visit of Crown Prince Salman bin Hamad Al Khalifa (who is also Bahrain’s prime minister), the United States was granted “official partner status” in the Bahrain Global Sea-to-Air Hub. “This guarantees less than two hours’ transit time between any goods going from the port to the airport and vice-versa.”
Relations with Israel: ‘Consistency is what matters the most’
Just over two years ago, Bahrain made world headlines when, along with the nearby United Arab Emirates, it signed the Trump-brokered Abraham Accords, under which both Gulf countries normalized relations with Israel. Al Khalifa called this “extremely significant” for his country.
“In the post-COVID era, where governments are reshuffling their priorities, and given the strain that the virus has put on countries around the world, we needed to look in a direction we hadn’t looked at in the past, so could build back our economy to be healthier than ever before,” he said. “For decades, we have tried everything in the playbook, and now it’s a new chapter. And this has created a unique opportunity for us.”
Asked if the people of Bahrain support ties with the Jewish state, Al Khalifa didn’t answer the question directly, noting instead that “we’re still at the very beginning of this relationship.”
“It is extremely important to double down on our efforts to ensure that this relationship is successful—not only by garnering support domestically but regionally and internationally,” he said, noting that Bahrain is the only Gulf state with a home-grown Jewish community that dates back hundreds of years.
In fact, one of Al Khalifa’s predecessors was Houda Ezra Nonoo, the first Jewish ambassador ever to represent an Arab country in the United States (see our November 2010 exclusive interview with Nonoo). Today, Bahrain is home to 36 Jews, and its flagship airline, Gulf Air, offers twice-a-week direct flights between Tel Aviv and Manama.
On Nov. 5, following a victory by Benjamin Netanyahu’s right-wing coalition in Israel’s latest elections, a top Bahraini official said relations with Israel will not change in any way.
“We have an agreement with Israel, part of the Abraham Accords, and we will stick to our agreement and we expect it to continue in the same line and continue building our partnership together,” Sheikh Khalid bin Ahmed Al Khalifa, diplomatic advisor to the king, told Reuters.
The ambassador, who hasn’t yet been to Israel, had this to say: “We understand that sometimes there are shifts within governments, but the consistency of the partnership is what matters the most. At the end of the day, that’s the way we view our relationships with other countries.”
Yet not once during our interview did Al Khalifa mention by name the country that has brought Israel and Bahrain together: Iran. Both countries have long looked with trepidation at Iran’s nuclear weapons program and its support of proxies such as Lebanon’s Hezbollah and the Houthi rebels in Yemen.
As significant as NUSACC’s “Ambassador of the Year” award is, Al Khalifa is not the first Bahraini to receive such a recognition in 2022. On Sept. 21, Bahrain’s ambassador to Israel, Khaled Yousef Al Jalahma, was similarly honored when the Ambassadors Club of Israel named him “Diplomat of the Year” for 2022, along with Moroccan envoy Abderrahim Beyyoudh.
“Both Bahrain and Israel are very lucky to have a Bahraini ambassador there who is capable of bringing businesses, innovation and partnerships to both countries,” Al Khalifa said of his colleague posted in Tel Aviv. “As time goes by, we will see added layers of formal agreements that will make it easier to trade with one another.”
Indeed, the two countries have now ratified 40 memoranda of understanding, with Bahrain and Israel expected to sign a free-trade agreement by year’s end, Reuters reported Oct. 31.
“In a nutshell, Bahrain’s policy has always been to promote peace and security. We will continue down that path because our future generations deserve that,” Al Khalifa said. “We need to consider how to protect our national security interests in the midst of global threats. One way is working with like-minded countries, but also ensuring there is dialogue with everyone.”
