 From Bahrain, it's theCUBE. Covering AWS Public Sector Bahrain. Brought to you by Amazon Web Services. Welcome back to theCUBE coverage here in Bahrain, the Middle East with AWS Summit celebrating the opening of their new region and all the economic development going around it. A lot of change, cloud computing changing. The landscape for startups, businesses, and the government for cloud first. Mohamed Khalida, senior manager, economic development board for ICT. Welcome to theCUBE, good to see you. John, it's a pleasure to see you again and be here on theCUBE with you all. You know, we're excited. Second year theCUBE's been here. What a stark contrast. Now it's not just talk of the Amazon region being open. It's operational. Startup scene is more dynamic. You guys are a big anchor in all of this. Give us the update. So in the last year, the startup scene in Bahrain has grown by about 100% of where it previously was. Part of that's driven by the fact that Amazon is here and the region is changing as a whole. You have Microsoft and Google and other companies all realizing the potential in this region. That's driven by the fact that there's a 40% year-on-year growth in cloud businesses and uptake of those businesses as well. So the talent pool as a result is increasing in scope and people are popping out of these companies and government ministries and are energized to now start their own businesses. Aside to that, what you've started to see in Bahrain and the region as a whole is a firm interest in governments in introducing regulations that are meaningful to these companies. Now, the way the governments work in these regions, especially in a country as small as Bahrain, is that we're able to legislate very fast onshore and we're able to do that with a very close ear to the ground on what businesses need and what they're requesting. So it almost functions as a corporation and an enterprise that wants to do best for its subsidiary corporations. And you guys want to take care of the citizens as well. You guys listen to the societal impacts, the demographics, a lot of young people. Absolutely. The news around a cloud computing degree, bachelor's degree, four years, or one year, that's going to help. The entrepreneurial equation, you guys have been really the stewards of that. How's that going? Is there any plans to have entrepreneurship being more formally taught in the universities? How are you guys thinking about the entrepreneurship equation? So there are definitely thousands of people right now going through cloud training courses because we see that as being the future. We ourselves as a government offer to make all of that training free. So insofar as a person wants to attain a certification or a company wants to train one of their employees, that whole process is 100% free granted by the governments of Bahrain. The reason why we do that is because the human capital in the country is seen as our single greatest asset, more so than anything else. We're not a heavy oil economy. Oil is 17 and a half percent of GDP. Financial services is a similar level. Tourism is a similar level. Manufacturing is a similar level. So for us, if it's not oil, it's people. And people will generate everything in those subsectors that's relevant. So for us, the training programs that we're instituting with the universities, the vocational training providers, et cetera, are all key to this. The in-sourcing strategy is something you're seeing the technologies enabling. I mean, we're seeing with corporations, they're building their own stacks. They're building developers in-house. You guys as a country are saying, hey, you know what? We're not going to outsource the other. We're going to build our sovereignty with the people. This is about talent. Now the younger generation, they want to move fast. They don't want anything passed down from the old guard, older folks like my age, but they want speed. They want freedom to develop and build something. This is kind of a cultural shift. Absolutely. What's your take on that? What's the sentiment around that culture, the younger generation, in terms of app developing? Yeah, I mean, I think it's a bit split. You have a government that's very interested in insourcing. A lot of the private sector still does a lot of outsourcing. So there's a happy middle between them. We try to make the visa policy quite straightforward for the guys that want to bring talent from abroad where they can't fill that talent up local. And there is a place for companies like systems integrators, et cetera, to fill those gaps up. But at the same time, insourcing remains key. As I mentioned, government is fully developing their own capability and is primarily doing that by pulling students out of universities and through those programs and advising universities on what those programs should look like to make sure that there's a match and a synergy between where we see the future of technology and the future of the services we're building with the youth they're learning. And the reason I talk about government, and it's typically not nice to talk about government as a fast mover, but in this part of the world, government tends to move faster than business when it comes down to innovation. It's a weird flip that's happened between what you see in parts of the West and what you see in this part of the world. So the changes that we make on the government side end up being flags that indicate to the private sector some of the changes they're going to start seeing. So that's a regulate fast piece. So moving fast, set the pace for business, but not metal in the startup small. We had a good chat with the central bank, same thing. They did some quick things. They got a sandbox, they do quick certifications. So I got to ask you the next question. Startups, nurturing them, attracting them, getting people excited by them, any new plans? You guys have any new programs? Yeah, so right now we've made the cloud crediting for businesses that are setting up in Bahrain up to a certain cap, 100% free for them to use cloud credits on any cloud hosting provider basing operations in Bahrain. So the reason we do that is because we think we already have a series of incentives that already pay up to 50% of their CAPEX and OPEX. We just increased the cloud side because it actually made more financial sense for us as a government. It drove innovation across these sectors in these industries. Aside from that and aside from the capacity building we've changed a series of laws that resolve a couple of things. One is the safety of investors in these companies and the safety of their founders, which include things like including chapter 11 protection under the law, introducing laws against anti-competitive behavior at the governmental level and a few other sectors. But the more interesting thing for me, aside from those, I mean that's obvious, right? You want to help people fail and you want to help remove friction from the investment environment and you want people to build up capacity and training. But aside from that, the more interesting things that we're doing are around open banking APIs. So we're the first country in the region that has now opened up, set up a process for opening up all our banks' APIs. That basically means that an infrastructure level, financial services companies can now build on top of banks and create value-added services. It's the same thing with the government where the government has now started building API bridges using Amazon and I'll give you one example of the first value-added product that's come out of that. We've just released a product called EKYC, electronic KYC, entirely built out on the blockchain. It's the first of its kind globally. And in real terms, what that does is it lowers the lifetime costs of doing electronic KYC from about $8,000 to a per transaction cost of about $2 per transaction. So it's a real meaningful difference for these companies and the reason why you could deploy something like that so quickly and so effectively is because of the fact that the government's building on APIs and opening up some of that infrastructure and the central bank is asking banks to do so as well. API standards, money, software innovation, kind of interesting FinTech innovation strategy. Kind of a data control plane, but the banks are protected because they're just exposing APIs, entrepreneurs can innovate, write custom applications, is that the thinking? Absolutely. So that combined with the FinTech Sandbox, which I think the central bank must have talked to you about, it's phenomenal. Allows us to kind of regulate the licensing of the FinTech products. So it's safe for consumers and it's safe for banks as well, alongside the fact that we're opening up the technical layer of the banks into these companies. I think they got that right. I think you guys have a great collaboration equation, balancing regulatory and innovation and the startups are just going to take advantage of that. When the region's up and running, which it is, and starts humming along, you're going to start to see a flywheel of startups. Absolutely. The question that is on my mind and I'd love to get your thoughts on it is the ecosystem support because you said trust. And you guys have telegraphed and postured very trustfully as a country to entrepreneurs. That's clear. Can that ecosystem get localized? The service provides, the law firms, the angel investors, you know, the stakeholders that are always around because people are going to fall and they're going to fail but they got to get back up again. They need that system of nurturing. What's your take on all that development? We spend a lot of time. My role as an economic development board is very much focused around keeping our ears close to the ground with respect to companies and we listen to what both younger companies and smaller companies and large companies need. And the way we've looked at it is we try to legislate along the lines of the fastest growing most innovative companies which tend to be these startups and SMEs in the country. And we tend to work, our role is really what we call team Bahrain and that strategy is to nurture a combination of all the regulators, all the universities, all the schools, every single player, all the private sector players, students into a collectivized understanding of where we want to go. And based on that we constantly have an ongoing conversation with everybody including the VCs about how we can meaningfully make impacts. So just on the VC point, we recently set up the Alwaha Fund of Funds which is a $100 million fund of funds. It puts money directly into venture capital funds which then can redeploy that investment back into startups. The only request that we typically have for that fund is that they set up a presence in Bahrain insofar as they're gonna receive capital. What that means is that there is going to be a critical mass in the country of venture capital funds that are now closer to those startups and in a direct conversation with every part of society whether it is government regulation all the way down to private sector. So you got some capital enablement there. Absolutely. That's awesome. We'll see about the capital markets and you guys got some developments going on there. Final question I want to get your thoughts. From last year this year and looking forward, Mohamed what are you most excited about right now? I'm excited about a whole lot. Come on, give me the top two. So top three. So the top three, there's stuff I can't talk about to be honest and you're going to see it come out in the next month. So there's stuff that's going to come out with respect to capital markets and simplifying the investment, removing friction from the investment environment and introducing greater amounts of volume. The other thing that I'm very excited about continues to be the capacity building that we're doing in universities with the AWS Educate Program that's continuing to expand in Bahrain as well as other programs beyond AWS Educate run by companies like Microsoft, Google with their development program. So there's a lot of fantastic capacity building work going on. And then I would also say it's back to what I was saying earlier. It's just excited to see what companies are going to start building as we're opening up the infrastructure. We're working very closely with them and the regulators to make sure that as they build on top they're not soft by regulation that the regulation constantly understands what they're trying to achieve. I like what you're talking about. You hear the ground, you're listening to what's going on in the marketplace. It's going to be, I think a lot of, I think a lot of software surprises are going to come. You're going to start to see some, what looked like weird ideas turning into the best thing. Who would have thought that Airbnb would be successful? Their original business plan was putting cots on the ground and selling cereal. Now they've changed the hotel industry. We're looking forward to seeing you guys do a great job. We appreciate you supporting theCUBE to come here. That's awesome. And we hope to have theCUBE in Bahrain next year as the team covering you guys and documenting what's going on. We look forward to continuing to work with the team. Thank you very much. theCUBE coverage at AWS Summit, Bahrain. I'm John Furrier. Thanks for watching. Be back with more coverage after this short break.