Editor's Note: This is the third installment of a five-part series that explores the economic and social challenges facing the countries of the Gulf Cooperation Council, how their governments are responding and what effect their actions will have on the region's sectarian dynamics.
Across the King Fahd Causeway from Saudi Arabia lies the smallest country in the Gulf Cooperation Council (GCC), the tiny island nation of Bahrain. The state is something of an anomaly among its peers in the bloc: Lacking the abundant oil and natural gas reserves that they have, Bahrain has historically made its reputation — and prosperity — as the region's financial hub. It is the only GCC state whose economy does not run primarily on oil revenues. It is also the bloc's only Shiite-majority country. Despite these distinctions, however, Bahrain faces many of the same economic and social problems that are plaguing its fellow GCC members. Though the slump in oil prices has not directly harmed Bahrain's economy, the resulting regional economic downturn has hurt its vital financial and industrial sectors. The country's flagship industries stand to take an even bigger hit as more affluent GCC members such as Saudi Arabia, Qatar and the United Arab Emirates turn to them in the urgent quest to diversify their own economies.
Like the rest of the GCC's leaders, the Bahraini government in Manama has also become keenly aware of the need for reform. In fact, the ruling al-Khalifa family got a head start, having launched an economic reform and liberalization campaign in the late 1990s. The initiatives have made progress over the years, especially in the services sector, albeit at a high price for Manama. Every step of the way, the al-Khalifa family has had to balance the interests of different segments of Bahraini society and maintain high levels of social spending — with help from Saudi subsidies — to fend off unrest. As Manama continues its efforts to reform water and energy subsidies and restructure its financial sector in order to draw more investment from outside the GCC, sectarian strife will be of particular concern to the government. For Bahrain's Sunni royal family, unrest among the country's Shiite population is an existential threat — one that Iran will certainly try to exploit.
Even though Shiites are the majority in Bahrain, accounting for between 60 and 70 percent of the country's population, they are not a monolithic force in society. Ethnic, class and religious divisions crisscross Bahrain's Shiite community and prevent it from forming a united front against the government. These rifts also frustrate Tehran's attempts to gain clout in the island nation. Bahrain's Shiites first took to the streets in the late 1960s and early 1970s, inspired by the ferment brewing across the Persian Gulf in Iran. But after the Iranian Revolution of 1979, the fissures between the country's ethnic Arab Shiites — the baharna — and ethnic Persian Shiites came to light. The baharna, who have lived in Bahrain for centuries, typically find themselves at the bottom of the country's socio-economic hierarchy. Bahrain's Persian Shiites, on the other hand, have migrated to the country over the past century and occupy a more comfortable position in its middle class. Over the years, Bahrain's government has taken advantage of the split that keeps its Shiite community from mobilizing against it.
Still, the memory of the Shiite protests of the 1960s and 1970s weighs heavily on Manama, which considers Iran's sway in the country an enduring threat to its rule. Most ethnic Arab Shiites — the government's default scapegoat for Bahrain's instability and protest movements — have deeper affiliations with Saudi Shiite groups, but some maintain ties with Iran. Prominent Shiite cleric Sheikh Isa Qassim, for example, studied and taught in Qom for several years before returning to Bahrain as the ideological leader of the now-defunct Al Wefaq opposition party. Furthermore, the Islamic Front for the Liberation of Bahrain, a Shiite group that staged a coup against the al-Khalifa family in 1981, had support from Tehran. Though keeping close relations with Iran is less of a priority for many Bahraini Shiite groups today, Tehran's influence nonetheless poses a risk to the country's security.
After the 2011 Arab Spring protests, some nascent opposition movements in Bahrain rejected negotiations with the government, Manama's preferred means of resolving conflict. In response, the government began cracking down on all protest movements to control dissent in the country, unable to distinguish between peaceful opposition groups and more violent factions. In summer 2016, Manama, with tacit approval from its fellow GCC leaders, stripped Qassim of his citizenship, placed him under house arrest and disbanded his Al Wefaq party in response to a wave of Shiite demonstrations. More recently, the government announced Jan. 5 that its intelligence apparatus could resume making domestic arrests — a privilege it lost after the Arab Spring.
The Bahraini government's renewed efforts to contain and pressure protest movements demonstrate that it no longer sees a need to concede to dissidents. After all, the United States and United Kingdom are limited in how harshly they can censure Bahrain's leaders, since Manama allows the two Western countries access to strategic naval bases there. The international community's adamant calls for democratic reform and leniency, moreover, have somewhat subsided in the years since the Arab Spring. Bahrain is now concerned primarily with maintaining support from Saudi Arabia and the United Arab Emirates, which, in turn, want to ensure that Manama has the tools it needs to manage sectarian unrest.
The crackdown also reflects the danger, however remote, that Iran still presents to the Bahraini government. In the years since the Arab Spring, Tehran has stepped up its deliveries of military and financial aid to Shiite groups in Bahrain. Tactical equipment and weapons have begun surfacing more frequently in the country's Shiite communities, and Bahraini forces have occasionally intercepted boats carrying militants and equipment over the Persian Gulf. Coupled with the daily protests in Bahrain and Tehran's intermittent calls to overthrow the government in Manama, the growing support for Bahraini Shiites has prompted the al-Khalifas to try to stamp out opposition groups and sever any ties to Iran. With ample assistance from Abu Dhabi and Riyadh, Manama's efforts will limit the kinds of materiel and operatives that Iran can deliver to Bahrain.
The island nation's economic situation, meanwhile, will deteriorate, widening the gaps between its Persian and Arab Shiite communities and increasing Manama's financial reliance on its fellow GCC members. Notwithstanding their own mounting money problems, Saudi Arabia and the United Arab Emirates will not turn their backs on Bahrain and the al-Khalifas, whose fall from power would galvanize domestic opposition to their own royal families. Likewise, Tehran will keep trying to build inroads with the Shiite communities in Bahrain, the GCC state most receptive to its advances.
A Return to Reform in the Gulf Cooperation Council
Reform Promises More of the Same for Saudi Arabia's Shiites
Kuwait's Advantages May Be a Double-Edged Sword
A Different Outlook for Reform Elsewhere in the Gulf
