Bahraini authorities should not miss the chance to turn existing economic challenges into opportunities. The fact that Bahrain suffers from the worst credit ratings among Gulf countries says a great deal about the tasks ahead.

Sadly, major credit ratings agencies have one thing in common — namely in assigning adverse marks for Bahrain. In February, S&P cut Bahrain’s ratings by two notches to BB. Worse, the agency removed its investment grade status, the sole case within the Gulf.

And Moody’s downgraded Bahrain’s sovereign ratings from Ba1 to Ba2.

Officials have no choice but to adopt a formula designed to boost revenues and cut expenditures where possible. There is a strong logic for this prescription, as fiscal year 2016 was prepared with a record projected shortfall of $4.1 billion, translating into 42 per cent of spending.

On the revenue part, Bahrain could emulate the Dubai model of imposing fresh fees for using its airports. Effective June 30, a $9.5 fee will be levied on all passengers using Dubai International and Al-Maktoum International, except those below two years.

Dubai is expected to generate a notable $700 million per annum from the new fee, in turn used for expanding and developing airport facilities. Certainly, Bahrain would earn a smaller amount, but this sort of revenue has proved popular throughout the world. The charge is levied on users and not the general public.

Concerning expenditures, Bahrain should consider adopting moves undertaken by Oman by cutting allowances for travel, insurance and mobile. Such allowances are not offered to public sector employees at large, but those working the petroleum and aviation sectors.

Still, the current environment provides an opportunity for officials to end red-tape and all kinds of bureaucratic measures. Recently, the crown prince presided over a ceremony designed to ease the process of obtaining and amending commercial licenses with minimum efforts and aimed at enhancing the role of private sector firms.

Bahrain stands out for allowing competition in all activities in the telecom sector and not just mobile services. Many users no longer consider telephone charges as a burden. Certainly, officials need to copy the success achieve in the telecom industry in other areas.

Bahrain is facing competition in areas once deemed as a major competitive advantage for its economy. Visiting Melbourne recently, I learnt of a growing interest in Australia for Islamic finance. Yet, the academician acknowledged that as far as Australia is concerned, the route for this Islamic finance goes via Dubai rather than Bahrain.

Needless to say, Dubai is an hub for banking activities thanks to initiatives like DIFC. But Bahrain has traditionally served as a primary base for Islamic finance in the region. There is always the challenge of maintaining success in a very competitive world.

Happily, Bahrain possesses the means to overcome existing economic hurdles thanks in part to availability of local human resources, prudent laws notably in the financial services sector, and openness of its economy.

In fact, the he 2016 Index of Economic Freedom regards Bahrain as the most open economy within Arab countries by achieving the 18th ranking worldwide among 178 reviewed economies. The index classifies three GCC states, namely Bahrain, the UAE and Qatar, as mostly free.

However, economic success is no easy as countries all over the world seek to attract business.

The writer is a Member of Parliament in Bahrain.