Like its Gulf Co-operation Council (GCC) counterparts, Bahrain’s ambitious plans for economic development were hit hard by the global financial crisis. Projects conceived in the early years of the 2000s, intended to mark the country’s position as a regional financial hub, were swiftly neglected as credit lines diminished and the real estate market collapsed. Soon after this economic crisis hit the Gulf, the authorities in Manama were then faced with the kind of systemic political unrest witnessed across much of north Africa and the Levant in the early months of 2011.
Though the political activism that hit Bahrain was defined ostensibly along sectarian lines, as an expression of long-standing political and economic grievances, the impact on the country’s economic trajectory was less severe than anticipated. “Bahrain was relatively unscathed compared to other regional centres. In 2009, some Gulf countries were providing guarantees for major institutions and injecting liquidity into their financial systems. Bahrain was able to avoid this kind of intervention due to the proactive vigilance of the regulator – the Central Bank of Bahrain [CBB],” says Robert Ainey, chief executive of the Bahrain Association of Banks.
