Financial Times Report: Bahrain’s Economy the Regime’s Hidden Victim

The Financial Times reported last Wednesday that "Bahrain's chaotic unrest in February, combined with March's security crackdown, could deal Bahrain's global ambitions a fatal blow".

Noting that financial services, which account for 20 percent of the kingdom's gross domestic product, have been hit hard, the British newspaper snapshots certain images from the Bahraini scenes:

"Bahrain Financial Harbor, which houses companies such as BNP Paribas, which has its regional headquarters in Bahrain, became a flashpoint in the unrest. Protesters camped outside its towers, which were taken as a symbol for alleged corruption surrounding the ruling family, before police cleared them out in the first step of the violent crackdown on the pro-democracy movement on the Pearl roundabout". FT said.

Institutions which chose Bahrain as their regional hub because of its proximity to Saudi Arabia and large pool of educated local talent have been mulling their options. "For example, Robecco, the asset management arm of Dutch lender Rabobank, which has $5bn of regional assets under management, has decided to move its regional headquarters and 12 staff from Bahrain to Dubai by the end of the year".

Banks that jump ship to Dubai, Doha or Abu Dhabi is not only worried about losing business in Bahrain, they are also fearful of retaliatory measures from Saudi Arabia, the region's largest economy.

Nonetheless, the news paper quotes senior bankers says that even large lenders are considering their options as Bahrain's liberal image dissipates. "Some are quietly shifting staff to other offices in Dubai, which is more competitive than ever because of its real estate crash."

Meanwhile, some executives see no future in a divided society where a state-ordained purge of pro-protester sympathizers is sweeping the private sector.
"I had to fire one of my Shiaa staff, who had turned up for work every day, but was deemed a traitor," says one executive to the news paper.

And Lebanese executives, an important source of talent, have been harassed.
The report tells stories of hours of interrogation at the airport. "One even had his phone stolen by security officials as they turned him back. Another missed an important trip to Saudi Arabia because he was held at a checkpoint for hours". The report clarifies.