Big sigh of relief!

Bahraini bankers expressed relief this week that the February 14 anniversary of last year’s unrest passed without major disruptions but said lenders needed to see more infrastructure projects in the Gulf bank and tourism hub, writes Andrew Hammond.

“There is hope that the political situation will be seen as stabilised to a great extent and agencies start increasing ratings,” Bahrain Association of Bankers chairman Abdul Karim Bucheery, pictured below, said at a meeting with reporters.

Bahrain, home to the US Fifth Fleet, has been in turmoil since a protest movement erupted last year and some ratings agencies downgraded Bahraini banks.

Anti-government activists had vowed to reoccupy the area where the GCC (formerly Pearl) Roundabout once stood in Manama but security forces kept tight guard on the traffic intersection, which has remained closed to the public.
 
There remain regular clashes in villages, where riot police have deployed armoured vehicles, water cannon and helicopters to prevent trouble escalating.

Mr Bucheery said only four or five financial institutions left Bahrain last year and believes the reasons were also linked to the global economic downturn. He said two Indian banks had applied for licences to open branches in the kingdom.

He also said a government move to stop on-arrival visas for some Western nationalities would not affect banking. A number of foreign activists entered Bahrain on tourist visas this month to express solidarity with protesters. Twelve have been deported.

The protests against the government dealt a body blow to the real estate sector and tourism. Many office blocks stand half empty and weekend Saudi tourism is a shadow of what it was before.

“The government still needs to push infrastructure projects. There is no liquidity problem on the bank side but the issue is scarcity of projects,” Mr Bucheery said, adding the sector felt relief that the economy had not suffered greater damage.

Bankers welcomed the appointment of Kamal Ahmed last week to the transport ministry portfolio. He was previously chief operating officer at the Economic Development Board and is seen by many as the kind of technocrat needed in government.
 
His ministry is expected to supervise a Saudi Bahrain rail project which will be funded by the two governments and private investors, as well as restructuring of Bahrain’s aviation sector, including national carrier Gulf Air, this week boosted by confirmation that this year’s F1 will be staged in April.

“Kamal Ahmed comes from a business background and I think the focus for Bahrain is building the railway to Saudi Arabia. Having a minister for transportation is the right thing to do for the economy and the country,” Ali Moosa, managing director of JP Morgan in Manama, said.