Bahrain’s not so impressive credit ranking should be a cause of concern for authorities. Standard and Poor’s, a key credit rating agency, has assigned Bahrain the lowest ranking among fellow Gulf Cooperation Council (GCC) countries.

In fact, the credit rating of ‘BBB’ is the lowest investment rating. Still, of all GCC countries, only Bahrain is on S&P’s credit watch. What’s more is that the outlook for Bahrain remains negative.

The relatively poor rating by regional standards adds to an already alarming debt challenge. Outstanding public debt amounted to $7.7 billion in 2010, rising to $9.5 billion in 2011 and to $11.6 billion this year.

Whilst not statistically frightening, rising debt levels cannot be overlooked. The latest debt ratio accounts for around 43 per cent of the gross national product (GDP). The debt level comprised some 25 per cent of the GDP only three years ago.

Happily, the debt level remains below the psychologically significant mark of 60 per cent of GDP as stipulated by the Gulf Monetary Union (GMU) scheme. Bahrain, Saudi Arabia, Qatar and Kuwait are members of the GMU, which came into effect in 2010.

Remarkably disturbing, adverse effects of the current credit rating issue were on display recently whilst marketing fresh sovereign instruments. The country had to endure paying higher basis points above Libor than in the past to entice foreign interest in a $1.25 billion sovereign bond to help bridge a fiscal shortage.

Yet, there is the debacle of economic growth. Bahrain’s real GDP grew by a comfortable 4 per cent in 2010. In 2011, however, the growth level dropped to around 2.2 per cent, according to official statistics, and still lower to 1.8 per cent, as suggested by the International Monetary Fund.

The new growth figures are problematic for numerous reasons, including it being below the population growth rate. Still, the economy needs to grow to satisfactory levels to help address other problems, notably creating enough jobs for locals.

Nevertheless, there is evidence of promising developments, including the country’s ranking in the Global Innovation Index (GII) 2012. The recently released report shows Bahrain’s ranking rising five positions to 41 globally. Only two GCC member states, Qatar and the UAE, outperform Bahrain on GII.

Not surprisingly, Bahrain’s strengths focus on human capital — sustained investments in training and education. In fact, this is a primary marketing point for Bahrain with regard to attracting foreign business. Certainly, this is no easy achievement as Bahrain needs to compete with giant regional economies. With a GDP of around $26 billion, Bahrain boasts the smallest economy in the region. For comparative purposes, values of the nominal GDPs of Saudi Arabia and the UAE amount to $633 billion and $357 billion respectively.

The hospitality industry for one should receive a boost following the opening of a new addition to Manama skyline in the next few years. I am referring to the 50-storey Four Seasons Hotel in the Bahrain Bay area of the capital. Happily, the area surrounding the upcoming skyscraper is undergoing major development in terms of infrastructure.

On a microeconomic level, the country has succeeded by virtue of being selected by Boston Analytics of the US to serve as its first branch in the Middle East. This is vital for Bahrain, not least for coming against a backdrop of exit and relocation of several financial institutions.

Bahrain has the capability to overcome its economic woes by leveraging its exceptional human resources.

The writer is a Member of Parliament in Bahrain.