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Bahrain’s economic crisis is an urgent sign that change must come

August 6, 2018 at 2:33 pm

King of Bahrain, Hamad bin Isa Al Khalifa attends the closing session of the 37th Leaders Summit by Gulf Cooperation Council member states in Manama, Bahrain on 7 December 2016 [Stringer/Anadolu Agency]

The warning signs are clear and unmistakable: the Kingdom of Bahrain is in serious financial difficulty and its economy is tumbling into crisis. The country’s bond ratings are listed as junk. It’s gross debt as a percentage of GDP stands at 94.9 per cent, nearly four times the Gulf Cooperation Council (GCC) average. The IMF has warned that the time is past due for a comprehensive plan to deal with the spiralling debt burden. And Bahrain’s chief benefactors Saudi Arabia, the United Arab Emirates and Kuwait have hesitated on delivering a comprehensive bailout package until and unless the authorities in Manama can articulate an effective approach to dealing with the economic crisis.

Compounding the challenges facing the kingdom is a political impasse that has persisted for more than seven years. Unique to the Gulf, Bahrain has a Shia Muslim majority ruled for more than two centuries by the Sunni Al-Khalifa family. Shia Bahrainis have long complained of discrimination at the hands of the monarchy.

In February 2011, more than 100,000 peaceful protesters — in a country with an indigenous population of a little more than 650,000 — took to the streets and called for democratic reform. Hardliners within the ruling family saw this as a major threat; they had in their minds the role that popular protests had already played in the toppling of dictators in North Africa. Demonstrations in the capital were crushed with lethal force.

In protest, Al-Wefaq, the Shia political bloc in parliament, withdrew its 18 sitting members and in July 2011 pulled out of reconciliation talks altogether. Despite government promises of reform, repression was the order of the day; thousands were arrested, dozens were killed and hundreds more were injured.

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As the government crackdown continued, Al-Wefaq responded with a boycott of the 2014 parliamentary elections. The government retaliated by jailing its leader, Shaikh Ali Salman, in 2015. He was sentenced to four years in prison for “inciting hatred, promoting disobedience and insulting public institutions.” In 2016, Al-Wefaq and another political society, Wa’ad, were banned by the government.

There can be no question that the stalemate has severely damaged Bahrain’s economy. It has eroded the many advantages that Bahrain had: a transparent and well-regulated banking system that was attractive to foreign investors; a well-educated youth population committed to an ethos of hard work; a reasonably vibrant private sector; and a society that in contrast to its nearest neighbour Saudi Arabia was relaxed and relatively tolerant, including, as it did, Al-Wasat, an independent news site, something unique in the Gulf.

Today the country is divided deeply along sectarian lines. The majority Shia find themselves living in what amounts to a police state. The ruling family is split between hardliners who want to continue the policy of harsh repression and moderates who see the damage that the impasse has wrought. The trust deficit is huge.

If one accepts that the current situation is unsustainable and unacceptable — and the vast majority of Bahrainis do — and there is acknowledgement that, without a change of direction, the economy will continue in a downward trajectory, then it can be argued that the time is ripe for a move towards common ground that will lead to reconciliation.

The parliamentary elections slated for later this year present an opportunity for that process to begin, but huge obstacles remain in place. The government, at the behest of hardliners, has denied members of banned political societies the opportunity to run in the election. Al-Wefaq remains divided over whether or not, even if it was allowed to field candidates, it would actually do so.

Both sides need to bend a little: the government by dropping its ban which is denying many moderates the opportunity to serve their country at a time of crisis; and the opposition by removing its boycott in order to secure a better deal for the citizens it represents.

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And, of course, the Shia community which has suffered enormously at the hands of the regime, would need to be persuaded that those among them who chose to run for public office are not betraying the community by doing so. The community would need to make a leap of faith that only its leaders can encourage and support it to take. That task would be made less daunting if the government was to begin the release of political prisoners from Jau Prison, where over 3,000 are currently being held.

Granted, Bahrain’s parliament has limited authority and as a result of gerrymandering the opposition does not have any chance of securing enough seats to form a majority. Even so, better in than out. The 2014 boycott gave the hardliners in the ruling family clear ground to argue that the opposition was to blame for the impasse. Emboldened by what amounted to a strategic blunder by those they consider the enemy, they proceeded to crack down even harder, jailing opposition leaders, banning political societies, shuttering Al-Wasat and using the courts, draconian anti-terror legislation and the removal of citizenship in a ruthless bid to crush all domestic opponents.

The hardliners have failed, though, and the failure has not gone unnoticed by the outside world. US Republican Congressman Randy Hultgren, co-chair of the influential Tom Lantos Human Rights Commission, has urged the Bahraini government to “allow its people to organise and express themselves peacefully and according to their own conscience.” Furthermore, “Political repression of the Shia community and free speech advocates and bloggers will not lead to stability, but instead will foster the kind of extremism Bahrain claims to be fighting.”

Above all else, business seeks stability. The congressman makes a simple but utterly valid point; repression in Bahrain feeds instability. It is time for leaders in the Bahraini business community, as well as across the Sunni and Shia communities, to break the impasse and move forward. It is time for moderates in the ruling family to step out of the shadows. The journey towards common ground for reconciliation needs to start now.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.