Monocolumn: The Economic Effects Of Protest

While Tunisia and Egypt celebrate a new dawn, Bahrain – one of the first countries to flare up with protests after Tunisia’s Jasmine Revolution – is left to question the financial implications of revolution when its ambitions are less successful.

Monocolumn is Monocle’s daily bulletin of news and opinion. Catch up with previous editions here.

While Tunisia and Egypt celebrate a new dawn, Bahrain – one of the first countries to flare up with protests after Tunisia’s Jasmine Revolution – is left to question the financial implications of revolution when its ambitions are less successful.

Despite weeks of protests, the ruling Khalifa family remains fully in charge. But the island nation’s economy has suffered. The first blow came when the Bahrain Grand Prix, the opening race of the 2011 Formula One season, was cancelled. At a reported cost of $150m (€107m), the Bahrain International Circuit was a typically grandiose gesture by the Khalifa family to boost the country’s international standing, and the race’s cancellation is a visible reminder of the effect of the civil unrest.

That’s not all. Ratings agencies Standard & Poor’s and Moody’s have both lowered Bahrain’s government bond and credit ratings.

“The political turmoil in Bahrain was the main driver behind our recent decision to place the country’s ratings on review for possible downgrade,” says Tristan Cooper, senior credit officer at Moody’s Sovereign Risk Group. “The rising political temperature in the Middle East is worrying and we have acted to downgrade ratings in other countries that have been affected. We are keeping a close eye on political developments across the region.”

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