Bahrain: Tourism, Investment, and the Arab Spring
April 25, 2013
The Kingdom of Bahrain is a small island-nation in the Middle East, located in between the Persian Gulf and the Gulf of Bahrain. Bahrain’s closest neighbors include the dominant Kingdom of Saudi Arabia and the smaller nation of Qatar. Bahrain’s main investment sectors are characterized by booming financial and banking services. Hence, despite earlier hydrocarbon discovery than most Gulf States, it has attempted to minimize hydrocarbon dependence. In addition to the aforementioned sectors, Bahrain is also seeking to further diversify its economy through tourism.
To that end, Bahrain has focused on hosting and further developing the Formula One World Championship events. In 2002, agreements were signed between the Kingdom of Bahrain and Bernie Ecclestone, current manager of F1, to host the 2004 round of the F1 Championships. Shortly after the contract was signed, Bahrain invested 150 million USD in the construction of the Bahrain Racing Circuit. The F1 investment quickly paid off, allowing Bahrain to enjoy the second highest growth in tourism within the Middle East by 2006.
However, the events of the Arab Spring spilled over into Bahrain, leading to widespread protests that were met with harsh responses from the Bahrain government in 2011. While protests became more fragmented in early 2012, in part due to King Hamad bin Isa Al Khalifa’s agreement to consider democratic reforms, violence returned less than a month later, in February 2012.