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Insights

07 April 2020

The Kingdom of Bahrain and Covid-19: Bahrain's reaction to the global pandemic

The world is in unchartered territory with different national governments implementing differing strategies and measures to combat the impact and spread of Covid-19, all of which continue to have an impact on the world's economy, business and individuals.

The Government of Bahrain, spearheaded by the National Taskforce for Combating the Coronavirus, and its associated ministries and authorities have been quick to implement their own strategies to limit both the spread of Covid-19 and its impact upon Bahrain's economy, with such strategies receiving high praise from the World Health Organisation.

In order to limit the spread of Covid-19 within the country the Government of Bahrain has implemented the following:

  • Travel limitations: including entry bans for all travellers except for Bahraini nationals, residents, diplomats and those traveling with prior permission granted letters;
  • Visa restrictions: no visas will be issued on arrival and so travellers must have pre-arranged visas;
  • Quarantine requirements: for all those entering Bahrain who have travelled to certain high-risk countries in the previous 14 days;
  • Health: the introduction of social distancing regulations, whereby gatherings of more than five individuals in public places are banned, a requirement for individuals to always maintain a gap of no less than one meter between one another, and the closure of nurseries, schools and universities;
  • Consumer protection: the issuing of resolutions by the Ministry of Trade, Industry of Tourism fixing the maximum prices chargeable for products such as face masks and disinfectants and prohibiting the exporting of such products for a period of three months;
  • Safety: the closure of all non-essential businesses from 26 March until 9 April (if able to, online trading is still permitted); and 
  • Law and order: a prohibition by the General Directorate of Bahrain's Criminal Investigation and Forensic Science on rumours and the spreading of fake news, with those spreading such information facing prosecution; and increased police patrols enforcing social distancing regulations.

In order to help stabilize the economy, the Government of Bahrain has recently announced a BHD4.3 billion ($11.4 billion) stimulus package to mitigate the economic impact of Covid-19 for both individuals and businesses, which includes the following key polices:

  • Implementing a draft law regarding the payment of salaries of all private sector employees for three months from April 2020 from the unemployment fund pursuant to constitutional procedures and Bahrain's Social Insurance Law;
  • Paying the Electricity and Water Authority utility bills for individuals and businesses for three months from April 2020 (up to the value of such bills for the same period in 2019) with corresponding restructuring of the government's administrative costs to offset additional costs incurred;
  • Exemption from municipal fees for three months from April 2020 for all individuals and businesses;
  • Exemption of industrial land rental fees for all businesses for three months from April 2020;
  • Exemption of tourism levies for all tourism-related industry for three months from April 2020;
  • Increasing the size of the Liquidity Support Fund two-fold to BHD200 million ($530 million);
  • Increasing the Central Bank of Bahrain's loan facilities to BHD3.7 billion ($9.8 billion) to allow the deferment of debt instalments and the extension of additional credit; and
  • Redirection of all Tamkeen (the government agency responsible for the provisions of loans and assistance to businesses) programmes to support adversely affected businesses and the restructuring of debts issued by Tamkeen.

Government ministries and authorities have implemented other regulations and procedures aimed at mitigating the detrimental impact of Covid-19 such as:

  • The Central Bank of Bahrain has introduced several regulatory measures, including:
    • Borrowers or credit card holders are to be offered a deferral of repayment instalments for a period of six months with no additional fees or increase in interest (i.e. interest on interest);
    • Relaxation of the loans-to-value ratio for new residential mortgages for Bahrainis;
    • Increasing the maximum amount permitted by contactless payments to BHD50 ($133) from BHD20 ($53);
    • Capping merchant fees imposed on debit card transactions to 0.8%;
    • Provision to retail banks of concessionary repo arrangements for a period of up to six months at zero per cent interest, on a case-by-case basis;
    • Reduction of the cash reserve ratio for all retail banks to 3% from 5%;
    • Reduction of its one-week deposit facility, overnight deposit, one-month deposit and lending rates;
    • Prohibiting retail banks from blocking the accounts of customers who have either lost their employment or have retired if that customer has a financing arrangement with the bank; and 
    • Requiring all foreign exchange companies to sterilise all currency, both local and foreign, which includes either exposing currency to ultraviolet irradiation or high temperatures of isolation of currency for a minimum of three days.
  • The Ministry of Industry, Commerce and Tourism has extended the filing date for returns due pursuant to the Economic Substance Regulations from 31 March 2020 to 30 June 2020 for those businesses whose financial year ended 31 December 2019;
  • The Labour Market Regulatory Authority has terminated monthly work fees and fees for issuing and renewing work permits for a period of three months from April 2020, in line with the Government's stimulus package;
  • The Ministry of Justice, Islamic Affairs and Endowments has announced that the High Criminal Courts, High Civil Courts, Administrative Courts and Lower Criminal Courts will take part in televised court proceedings;
  • The Real Estate Regulatory Authority is now offering all of its services to licensed customers online;
  • The National Health Regulatory Authority has commenced the granting of licences to private hospitals so that those so desiring can be treated at such hospitals, and for the conversion of certain hotels into quarantine centres, if required;
  • Bahrain Clear has provided a new service enabling the management of the general assemblies of listed companies to meet remotely; and
  • The Information and eGovernment Authority launched the "BeAware Bahrain" application which advances contact tracing efforts to identify and track active cases of Covid-19.

Other entities such as banks and professional organisations have implemented their own practices, such as increasing daily ATM withdrawal limits and promoting working from home policies. New polices and restrictions will likely continue to be implemented in the weeks to come. The best way to stay informed of the latest developments is to check official sources, such as the Ministry of Health's website or other government sources.

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