Saudis wouldn’t gain much from a union with Bahrain

May 2, 2012

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Saudi Arabia’s call for Gulf nations to combine into a single entity appears to lay the ground for some kind of union with Bahrain. King Abdullah first highlighted the security issues facing the region when its leaders met in December – nine months after the kingdom sent tanks to tame a pro-democracy movement in Bahrain. Speculation is now swirling about how the relationship between the strongest and weakest members of the six-nation bloc could evolve, ahead of a meeting of the Gulf Cooperation Council this week.

The old idea of a Gulf union has taken on a new meaning after the Arab uprisings. Saudi Arabia hasn’t given any details on what it envisions beyond the existing cooperation on security and selected financial issues. But the six Gulf countries won’t easily set aside their political differences just to please each other. And plans for a Gulf monetary union, loosely based on the European model, appear to be stuck following the intention of the UAE and Oman to opt out.

That leaves the focus on Bahrain and Saudi Arabia, which already share strong links. As well as underwriting security of the island state, the house of Saud already partially bankrolls its finances. Bahrain gets roughly 150,000 barrels per day of oil from the offshore Abu Safah field, operated by Saudi Aramco under a decades old agreement. The revenues generated from its share of the field accounted for as much as 70 percent of Bahrain’s budget revenues in 2010.

A full fiscal union would help Bahrain lower its borrowing costs. Even with current Saudi support, it may run a budget deficit at four percent of GDP this year. The IMF estimates Bahrain’s gross public debt is around 40 percent of GDP. Total foreign debt is almost 15 percent. Bahrain’s gross domestic product is barely five percent of that of the two kingdoms taken together.

But a union formalising the status quo carries risks that don’t make it worthwhile. A pre-emptive move would pour fuel on the flame of the protests. It would also antagonise Iran, which once laid claim to the majority Shi’ite island. Any transfer of Saudi social austerity would also kill Bahrain’s raison d’etre among the Saudi businessmen and expatriates who escape to Manama to relax. Saudi rhetoric paves the way for a stronger union in the event that Bahrain’s regime is overwhelmed – but in that case, union would be just a name for annexation. In the meantime, the move isn’t worth the bother.


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A closer relationship between our countries is very much in harmony with the political direction of travel over the last three decades in the context of the Gulf Cooperation Council. Closer union is good for Bahrain’s struggling economy, it is in harmony with our close cultural traditions, and is appropriate to the tough political challenges facing our region. It is also vital for jointly countering external threats.

We in the Gulf should be able to speak with one powerful voice about the risks of war between Israel and Iran; instability in Yemen; regime atrocities in Syria and the other huge changes shaking the region to its core.

On the other hand, geography has dictated very different political traditions across these countries. In contrast to the relatively insular Saudi Kingdom, our tiny islands have been a constant stopping point for different cultures and traditions, giving rise to the open, tolerant and liberal society Bahrain enjoys today. This cannot and will not change.

When allied with our brothers and sisters across the Gulf, Bahrain can flourish through strengthening opportunities for trade and making the Gulf a more attractive environment for investment and doing business.

The causeway to Saudi Arabia is a tangible symbol of how we have already made important and beneficial strides towards greater unity. Bahrain can have the best of both worlds; allowing our tiny islands to have greater political and economic clout on the world stage through closer ties with our larger neighbours; while maintaining all that is good about our social and political traditions. Let’s not let irrational fears and suspicions prevent us from doing what is best for Bahrain.

Posted by CfBahrain | Report as abusive

This Action of Unifying Bahrain and Saudi Arabia makes Sense in the Dictatorial Sense. The People of these societies are not democratically represented. Their views do not count.

It is a very cynical act, because the truth of what the people of Bahrain want is far from this suggestion by the Unelected Absolute Dictator of Saudi Arabia.

The majority of people in Bahrain would prefer to be Unified with their Persian Brothers and Sisters in Iran, than with Arabs. Ask any Bahraini you know, go on facebook.

Posted by AlexInTheUK | Report as abusive