Mar 22nd 2011

Economic Roots of Bahrain's Crisis and a Needed GCC Response

by James J. Zogby

Dr. James J. Zogby is the President of Arab American Institute

All too frequently these days, I am asked whether our past polling at Zogby International gave us any advance clues to the uprisings that have occurred in several Arab countries. The answer, of course, is no. We were surprised, as, I believe, were the demonstrators themselves by the outpouring of support and the rapid growth of their movements in Tunisia, Egypt and beyond.

But while our polling couldn't predict the uprisings, it nevertheless has been helpful in contributing to our understanding of the issues and concerns that define the political landscape in countries across the region.

In preparing for a talk on Bahrain earlier this week, I took a look at a survey of the "middle class" in Saudi Arabia, the UAE and Bahrain we conducted a few years ago for McKinsey and Company. It was most instructive. What I found, back then, in that in-depth look into the economic status and outlook of Gulf Arabs were yellow flags flying all over our Bahrain data, warning that the country's citizens were distressed.

We found that not only are Bahrain's neighbors in Saudi Arabia and the UAE wealthier, in terms of macro-economic indicators, their citizens are also more satisfied with their current status and more optimistic about their prospects for the future. Ask the questions "are you better off than your parents were when they were your age" and between two-thirds to three-quarters of Saudis and Emiratis say "yes". On the other hand, only one-third of Bahrainis would agree that they are better off than their parent's generation. And when asked whether their children would be better off in the future, more than a half of Saudis and Emiratis agreed that they would be better off, while only 17% of Bahrainis are optimistic about the future of their offspring.

Hard data establishes that Bahrain's unemployment is significantly more than double that of its neighbors, but this is only part of the story. Most unemployed Saudis and Emiratis report having incomes (with some being fairly substantial coming from family support; others report income from rental properties or investments, etc). And most of those reporting themselves to be "unemployed" in those two countries come from households in which two or more individuals are employed. In Bahrain, on the other hand, most of the unemployed report having no sources of other income, most have no savings, and most come from households where only one person or no one at all is a wage-earner.

One doesn't have to make the leap to a crude type of economic determinism to conclude that this economic stress in Bahrain would have consequences. Bahrainis report being less satisfied with their jobs and the salaries they receive, and give lower grades to government services than their neighbors in the UAE and Saudi Arabia.

While this obvious economic distress in Bahrain is only one factor among others to which one can point in an effort to account for the turmoil in the country - it is a revealing and important factor nonetheless.

The issues of political reform, concerns with discrimination, and government accountability have now been brought to the forefront in Bahrain and are the key agenda items for a much needed national dialogue. But as this broader political discussion advances (and one can only hope that it does), the economic needs of Bahrain's people should not be ignored. Meeting economic concerns will not substitute for political reform, but not addressing these economic matters will only make advancing on the political front all the harder.

In this area, Bahrain's neighbors have a key role to play. Earlier this year, Gulf Cooperation Council members made a commitment of long-term financial assistance to Bahrain. And now they have sent troops into the country deepening their commitment to their neighbor and fellow member. More must be done. Bahrain needs help. Just as other GCC countries realized that the long-term standoff that shut down a vital part of the country was not sustainable or constructive, so too they must realize that the government's crack-down that ended the standoff will also not solve the country's problems or even contribute to a resolution. An honest, open, and good faith dialogue on all key issues is the only way forward. As that occurs, the GCC can design a more comprehensive economic package for Bahrain - as an incentive to move the reform process forward, as a sign of GCC solidarity with the Bahraini people and government, and as a way of demonstrating that Arab problems can be solved by Arabs.

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