The socio-economic foundations of Bahrain’s political crisis

A study of income inequality in Bahrain highlights the failure of the Government to extend its aid to those who need it most.

Hasan Tariq Al Hasan
20 February 2012

A few months ago, Bahrain’s Economic Development Board released a study for the third quarter of 2011 on income inequality in Bahrain. The study shows that the poorest 40% of the Bahraini population only got poorer in relative terms between the years 1995 and 2006, as they witnessed their share of the total annual income drop from 19.6% to 18.1% only. The report also highlights the shortcomings of the Ministry of Social Development and Human Rights’ social aid scheme, namely its failure to cover a considerable portion of Bahraini households that earn less than BD463 (approx. $1228) per month and that consequently fall below the country’s relative poverty line.

The report should not come as much of a surprise, as it merely articulates a dynamic of resource distribution that has been at work in the country for decades. The Government of Bahrain’s annual report for the year 1954 recounts a series of clashes between Sunnis and Shia between the years 1952 and 1953 subsequent to the results of the Manama municipal elections, before Manama became the country’s capital city. The government’s position in general was to ensure that Sunnis and Shia were equally represented in the council, half of whose members were elected and half selected by the government. The report states that the, “Sunnis objected to equal nominations on the ground that they were the most important commercial and financial element in the town and, indeed, in the country.” As a result, the Shia council members resigned, and what ensued was a series of clashes and fights between Sunni Arabs and tribal members on the one hand, and Shia Arabs or ‘Baharna’ on the other that left many wounded and a few dead. If anything, the report says, the dispute helped, “bring to light certain grievances which the Shias claimed that they were suffering. They had complaints about market conditions, relations between Sunni landlords and Shia tenants, and there was criticism of the Courts in which all the magistrates, except the Shia Sharia Kadis, were Sunnis – members of the Ruling Family.” Unfortunately, many of these grievances still resonate today.

Historical records also indicate that unlike the towns of Muharraq and Manama, Shiite villages – which have almost always been an incubator for political unrest - located mainly in the North-Western part of Bahrain at least until the mid 1950s did not have their own municipality and loosely fell under the jurisdiction of the Manama municipality. This meant that these villages were largely left out of the development process in terms of the modernization of facilities and infrastructure as funds were often channelled through municipal bodies. Signs of this exclusion can be clearly seen today when one compares the villages’ poverty-stricken, run-down houses and roads with Manama’s tall, intimidating skyscrapers only a few kilometres away.

Most certainly, grievances with socio-economic underpinnings have not been limited to the Shia community only. Recently, the Sunni-led National Unity Gathering that held its first rally on February 21, 2011, while sceptical of the opposition’s intentions, nevertheless reiterated demands for an improvement in living standards and for an expanded effort at fighting against corruption.

Early on after his succession, King Hamad Al-Khalifa alongside his son Crown Prince Salman Al-Khalifa appeared determined to take some measures towards greater equality. In 2008, the Crown Prince announced Bahrain’s Economic Vision 2030 whose stated aim is to double Bahrain’s median household income by the year 2030. The Crown Prince had already resolved in the year 2005 to reform the labour market that was riddled with overdependence on cheap, foreign labour as well as various forms of clientilism whose effects were disastrous to the employment of Bahraini workers. The reform, whose main tenet’s were the imposition on business owners of a BD10 (approx. $27) monthly fee on each foreign worker employed, the provision for foreign workers to shift employers without having to obtain permission and a crackdown on the employment of illegally-hired workers, was needless to say ferociously opposed by the kingdom’s merchant oligarchy. The business community whose interests were at stake voiced its concerns to the Prime Minister – the King’s uncle – and successfully rallied Sunni parliamentary groups to its cause. In fact, the Crown Prince’s labour market reform is a remarkable episode in Bahrain’s political history wherein opposition forces, namely the Shiite Islamist Alwefaq bloc and the labour unions, supported the Crown Prince’s reform initiative in the face of the opposition that Sunni loyalist groups mounted.

Surely, the labour market reforms are not flawless. In a personal interview in January 2010 Mr. Ebrahim Sharif, the now imprisoned leader of the Secular Wa’ad opposition group, criticized the reforms for having given birth to a set of semi-governmental bodies like the Labour Market Regulatory Authority, the Labour Fund Tamkeen as well as the Economic Development Board, that do not have a clear status in the constitution and thus are not directly accountable to parliament. Nonetheless, the labour market reform initiative eventually went through by royal decree, and opposition forces clearly saw it as a positive step towards economically empowering much of Bahrain’s socio-economically disadvantaged Shia population.

However, Bahrain’s 2011 uprising and the subsequent crackdown by security forces following the entry of Saudi-led GCC troops into the kingdom on March 14, 2011 helped tilt the balance of power within the ruling establishment in favour of the Prime Minister, a long-time ally of the business community. The opposition’s failure to accept the Crown Prince’s initiative for dialogue greatly undermined his credibility, and the business community was quick to lobby the government to suspend the monthly BD10 fees levied on foreign workers and to impose some restrictions on their freedom to shift employers. The government framed its suspension of the labour market reform’s measures as a temporary remedy that would allow businesses, whose performance was indeed hurt by the political unrest, to get back on track. Up until now, the suspension of the reforms seems anything but temporary.

In sum, history tells us that sectarian clashes and grievances are certainly not new, but more importantly, that they precede the politicization of Shia religious identity and the emergence of Shia Islamist groups and ideology in the region – the usual suspects behind political unrest. They are, first and foremost, the result of grave socio-economic inequalities that the government has done little to correct over the past four decades since Bahrain’s independence. These imbalances and the frustration they help fuel often take the form of violent political expression, particularly within a youth population that suffered from up to 38% unemployment according to a World Bank report dating as recent as 2005.

While writing these words, I stumbled upon a tweet by Alwefaq’s Secretary General Shaikh Ali Salman (@WefaqGS on February 15, 2011) who wrote, “Our condolences to the Crown Prince for the murder of his Economic Vision 2030” (my translation). His bone chilling words, which I hope are more of a warning than a statement of fact, serve as a stark reminder for the pressing need to reinitiate policies that address Bahrain’s ever-growing socio-economic inequality. As one of my twitter friends, @salmasays, once wrote, “The worst government policy is one that creates a stratum of people with nothing to lose,” (my translation).

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