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FACTBOX-Political risks to watch in Bahrain

Source: Thomson Reuters Foundation - Mon, 27 Aug 2012 14:07 GMT
Author: Reuters
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DUBAI, Aug 27 (Reuters) - Bahrain has been in turmoil for 18 months since a pro-democracy movement erupted after uprisings in Egypt and Tunisia. The conflict in the Gulf Arab state pits opposition groups, led mainly by majority Shi'ite Muslims, against the ruling Sunni Muslim Al Khalifa family and its supporters.

Here are some political risks facing Bahrain:


The political standoff took a new turn in June and July when the Interior Ministry banned marches led by the opposition party Wefaq, saying these had disrupted traffic and led to violence.

But clashes in Shi'ite villages have continued, led by activists who do not take their cue from Wefaq.

What to watch:

- Opposition marches in defiance of official bans


In August a Bahraini court handed a three-year prison sentence to rights activist and protest leader Nabeel Rajab on three counts of leading illegal protests. Prosecutors said the protests had led to violence, suggesting Rajab was responsible.

The verdict provoked criticism from Bahrain's U.S. ally, which said it was "deeply troubled" by the sentence.

What to watch:

- Sept. 4 verdict on leaders of uprising

- Sept. 10 court hearing on Rajab's appeal against sentence


Justice Minister Sheikh Khaled bin Ali Al Khalifa held separate meetings with political groups in August, including small government-friendly groups as well as opposition parties.

He suggested the parties should renounce violence before any formal talks to resolve the conflict. Wefaq said it had never condoned attacks on police with petrol bombs or other weapons.

What to watch:

- Any formal dialogue between government and opposition


Bahrain reinstated its ambassador to Tehran in August, a year after he was withdrawn in protest at Iran's criticism of the imposition of martial law and the arrival of Saudi and United Arab Emirates troops to help contain the uprising.

Iran did not reciprocate by sending back an envoy to Bahrain, which hosts the U.S. Fifth Fleet.

What to watch:

- Nuclear talks between Iran and the West; military moves


Bahrain has faded as a banking and tourism hub since the unrest began. Hotels and office space have low occupancy and fewer Saudis visit local bars, restaurants and malls.

The government said in August unemployment had risen only half a percentage point to 4.3 percent during the second quarter of 2012. But analysts say the unrest has set back an economic reform programme that aimed to create a free labour market where Bahrainis have the skills and education to compete for jobs.

What to watch:

- Status of economic reform programme

- Bahrain's sovereign rating, banks returning or leaving

- Capital flows, tourism, property market, planned LNG plant (Writing by Dubai newsroom; Editing by Alistair Lyon)

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