Zikibayeva, in December 2010, stated that Mohamed Bouazazi’s self-immolation in protest of the police corruption in Tunisia sparked numerous demonstrations that spread revolutions across North Africa and Middle East. “The revolutionary spirit that spread to the neighboring countries Egypt, Libya, Syria, Bahrain, Yemen, Morocco, Jordan, raised questions of a possible spillover in other regions of the world.”(Zikibayeva ).
The tension that arose led to various economic unrests which are continuing even today. A major loss to Bahrain’s economy and prestige was the cancellation of the 2011 Formula 1 Grand Prix races which were originally scheduled to take place during March. “Efforts were made to reschedule the event in June and then later in October or November 2011, but were left unsuccessful. The next Formula 1 race has been rescheduled to take place during November 2012.” (www.marcopolis.net). The adverse effects on the economy via the cancellation and rescheduling of the grand prix due to the tensions that arose because of the Arab Spring will be discussed in the subsequent paragraphs.
Formula 1 had contributed to the Bahrain’s economy significantly through the revenues gained through the sale of tickets, TV coverage, basic transportation, food and beverages and numerous other activities. However, with the continuous cancellations and rescheduling of the Formula 1 events in 2011, Bahrain has had to incur serious losses in the form of huge expenses to the economy.
Since 2004, the Grand Prix has always been held annually in March as the major event in the racing season. However, with the current tensions and cancellations, “Bahrain will be losing its premiere position in the holding the Grand Prix in March and will now have to hold the events close to the end of the season.”(www.marcopolis.net). This means that there will be a loss in terms of the audience as more people would have gone to the races at the start of the season rather than towards the end. At the present time, there will be a 32 month long gap between the last F-1 event which had been held in March 2010 and the present event which was scheduled to take place during November 2012.
According to the online source, macropolis.net, besides Formula 1, other sporting events would also have been cancelled or rescheduled due to the overhanging unrests presently. The Golf European Tourney at the Royal Golf Club which was supposed to take place in Bahrain (during this year) was moved to the Southern Hemisphere at the Fancourt Golf Resort. Thus, we are seeing that most of the highlighted sports for the current year have either been cancelled or relocated because of the rising tensions and revolutions in the Middle East.
Aside from expenses incurred due to the withdrawal of the event, losses to the economy also appeared in the form of lost tourism. With the current state of affairs, tourism has been highly affected in Bahrain. Tourism, which brought in substantial amounts of revenue especially during the F-1 season, was adversely impacted by the revolution. Income generated in the merchandize and souvenirs, food and beverage, and accommodation market took a big hit.
“Esam Fakhro, chairman of the Bahrain Chamber of Commerce and Industry (BCCI), has estimated that the direct economic loss to the economy from the unrest has been over US $2 billion”.(www.marcopolis.net). This loss in the economy was mainly seen in the tourism sector (hospitality and events) and it resulted in the reduction in the consumer spending in the retail sector. Further “results of the revolutions in the Middle East, Standard and Poors (a US based financial company) lowered the Bahrain’s long term and short term sovereign rating one notch and placed it in the Ratings Watch Negative list.” (www.marcopolis.net). This move adversely affected not only the Bahraini banking structure but also the Bahraini government who would now have to pay and/or charge higher interest rates on debts. This would be affecting Bahrain’s long term status as a regional and global center for banking and finance.
The Arab Spring has severely affected the countries associated with North Africa and the Middle East especially Bahrain. The revolutions and unrests in the country have affected the economy adversely. In Bahrain and Syria, the clash was mainly between the Shi’a and Sunni groups. “In late March, the Russian foreign minister’s spokesperson even declared that the events that were of an internal matter and that the matter must be solved though dialogue alone”.(Zikibayeva )
Reference:
- http://www.marcopolis.net/economic-effects-of-the-crisis-in-bahrain-direct-economic-loss-to-reach-us-2bn.htm
- Zikibayeva, A. “What does the Arab Spring Mean for Russia, Central Asia and the Caucasus.” (2011): n. page. Print. <http://csis.org/files/publication/110912_Zikibayeva_ArabSpring_Web.pdf>.
- http://ibnlive.in.com/news/fia-ecclestone-keen-for-bahrain-gp-to-go-ahead/230870-5-24.html