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Bahrain's Rulers Last Chance to Save Their Country

Bahrain's Rulers Last Chance to Save Their Country

While peace and stability has been restored in Bahrain, politics have all but ground to a halt in the country.

Iran is not the only worry. Saudi Arabia is critical to both Bahrain’s economy and security. For many, Saudi crown prince Mohammed bin Salman (MBS) is seen as an essential figure, driven to carry out vitally necessary reforms if the Saudi Kingdom is to develop as it needs to. But at the same time, Saudi Arabia is involved in a war in Yemen and an ongoing feud with Qatar. Both of these now involve Bahrain, which has little choice except to follow the Saudi lead.

Further complicating the situation is how MBS is being attacked by many Western countries for the murder of journalist Jamal Khashoggi. The moral certainty of the West is incomprehensible to many Bahrainis. As some Bahraini businessmen pointed out to me, the West and America, in particular, have ignored similar murders presumably orchestrated by Russia’s Vladimir Putin and other dictators. It also ignores Palestinian deaths and is itself responsible for the numerous assassinations and killings in Iraq. Why get so steamed up over one murder when it endangers the stability of a key American friend and jeopardizes Bahrain?

With an incorrigible Iran across the Gulf, a now less-friendly Qatar on one side and an assertive Saudi Arabia on the other, Bahrain senses trouble. With so much uncertainty around them and so little ability to predict how any sudden change will impact Bahraini stability, there is no appetite for bold political action. “This is not the time for grand politics,” is how one thoughtful Bahraini leader put it to me.

WITH THE political opposition suppressed, the initiative to drive social change lies with the government. It, however, no longer has any interest in a political deal, nor with trying to work with the Islamic opposition. Some observers had speculated that there would be a limited political opening for the opposition in the 2018 parliamentary elections, such as turning a blind eye to Al Wefaq members running as independents. The government rejected any such approach. It saw Al Wefaq as “fascists with beards”—troublemakers masquerading as democrats but, in reality, both wholly sectarian and foreign directed. Instead, the government now wants to move away from religious sectarianism altogether.

Its plan has two major lines of effort. One is a drive to get Bahrainis to submerge sectarian identity in a national “Bahraini” identity. The other is a redoubled effort to improve the country’s social and economic conditions as a way of absorbing much of the bitterness of the past few years and providing a future for Bahrain’s disaffected youth. There are efforts to push forward with these aims, and each faces many obstacles.

In the realm of education, work is being done to upgrade the quality of secondary school teaching. A recently established polytechnic college, based upon a successful model pioneered in New Zealand, serves as an example.  It takes students in strictly on the basis of merit, is responsible to market demands and has a good record in onward employment. Coupled with this educational endeavor is a new focus on youth education in partnership with DARE (Drug Abuse Resistance Education). While the American model of this sort of program is (as DARE’s name would imply) significantly directed against drugs, the Bahraini program also has an element of combatting violent extremism. A strong element of existing and planned efforts is a campaign to persuade Bahrainis to move away from their sectarian identity and see themselves as solely Bahrainis. This is a matter of much discussion within the senior Bahraini leadership.

However, for this campaign to have any chance of working the government will have to prove that it is willing to deliver social services on an equal basis. That has not been the perception among Shia, who have felt discriminated against in the provision of housing, government jobs and employment in the security services. The latter is unlikely to change, but there have been efforts to expand other services. More housing for low-income Bahrainis has been talked about for years and publicized in the papers, yet for almost as many years there has been little to no movement on it. That picture seems to be changing. Plans to expand housing are now moving along quickly, funded in part by a generous subvention from Bahrain’s Gulf Cooperation Council neighbors. The jury is out on whether the housing is being distributed more equitably, with very different perceptions from different observers—though some are saying there has been a recent and noticeable improvement. I was told that the health sector will be a forthcoming area for major attention.

In some ministries, Shia are clearly being hired and put to work. But Bahrain’s large and growing unemployment problem cannot be solved solely by providing government jobs. The solution will have to be found in the private sector, if it can be found at all. In this, several things constrain Bahrain: it is a small country with a small economy; it has limited financial resources; and it has faced intense competition from its neighbors, including Dubai, Abu Dhabi and Doha.

There is a basic understanding that to improve investment, particularly foreign investment, the government must be a facilitator rather than an employer. Changes in labor laws, work visas for foreigners and other regulations are part of this undertaking. While the jury is still out on the long-term effectiveness of such laws, the effort is impressive and reflects considerable thought and planning. Amazon’s opening of an office in Bahrain is claimed as one success of this new project. The office, according to Amazon’s press release, is to “support organizations of all sizes, from start-ups to government institutions, as they make the transition to the [Amazon Web Services] AWS Cloud”—an effort which may encourage other investments. There is long-term planning underway to expand tourism and find new markets, along with a parallel proposal to open new air links. All this is helped by recent developments, such as improvement in the price of oil, a low level of consumer price inflation and a bustling port that sees plenty of commercial activity.

 

Until recently, all these expansive plans have been constrained by Bahrain’s limited budget. The fall in oil prices hit Bahrain hard, as did the continued decline in production from Bahrain’s limited oil fields, which are the oldest in the Gulf. In addition to politically difficult reductions in subsidies (some of which were reversed under pressure) and increased taxes, Bahrain had to resort to substantial foreign borrowing. Its foreign debt increased substantially. Its investment rating by the credit rating agency Moody’s declined as a result, although it improved slightly at the end of 2018. Nevertheless, Bahrain’s economy remained under pressure. Substantial grants from Saudi Arabia and the UAE of over $7 billion dollars broadened Bahrain’s margin for maneuver, though this was not a dependable long-term fix. However, economic relief may be in sight.

A new offshore oil field has been discovered and, in April 2018, Bahrain’s oil minister announced that this new reserve contains at least 80 billion barrels of tight (i.e., locked in rock formations requiring fracking) oil and between 10 to 20 trillion cubic feet of deep natural gas. Exploitation of this new source will require new fracking technology. As such, Bahrain is in negotiation with foreign firms—particularly American ones, since they are at the forefront of the necessary technology—to exploit the find. A good deal of work and time will be necessary to determine exactly what is in this reserve and how much Bahrain will profit from it. Several years will be needed before the new finds can inject new money into the Bahraini economy. Nevertheless, the chances appear good that Bahrain will have an increased ability to invest more in its extensive economic and social planning.

 

WHERE DOES all this leave Bahrain? For the moment, the government and the royal family are secure. Widespread opposition has ceased. Not only have Shia-based parties ended work, but several Sunni organizations have largely gone quiet. Support from the Saudis and the UAE is solid. Official American pressure on human rights has subsided and the Bahraini government is euphoric about the Trump administration, which is more supportive than the Obama administration. There is hope both for economic expansion and for efforts to bear fruit in expanding employment and social services. For the next several years, there are solid reasons to suppose that Bahrain can continue its chosen course. Yet, at the same time, there is also reason for concern about the long term.