Investors in the Gulf region are getting the jitters as the turmoil in Bahrain brings the political risk enveloping the Middle East closer to home.
Bahrain was calmer on Monday even as protestors gathered again at Pearl Square, the center of the unrest in the country. At least seven people were killed and hundreds injured in clashes with security personnel in the previous week. In Kuwait, protestors representing the country’s 100,000 stateless residents also took the streets demanding citizenship.
Mass protests have forced the leaders of Tunisia and Egypt to step down and are posing threats to the rulers of Libya and Yemen, sparked by a combination of political repression and economies that failed to deliver jobs or rising standards of living. But the Gulf had been spared any unrest and even benefitted as oil prices rose.
“Coming into the new year, people were pretty optimistic,” Akram Annous, Middle East and North Africa strategist at Al Mal Capital in Dubai, told The Media Line. Oil prices were climbing, governments around the region were slated to spend billions in infrastructure development and Dubai was emerging from its debt woes “Then you got hit with his unexpected event …which has thrown a wrench into everyone’s model.”
Nevertheless, most analysts said they were optimistic that the Gulf region would remain calm.
“In Qatar and the United Arab Emirates, you won’t have national or popular revolt. People are for the most part content. The expat population is much larger and they are guests,” Theodore Karasik, director for research and development, at the Institute for Near East and Gulf Military Analysis in Dubai, told The Media Line. “Only in Saudi and Bahrain do you have this Sunni-Shiite issue.”
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