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Bahrain's king has ordered a state of emergency to be lifted from 1 June, after imposing it following weeks of street protests. "The state of national safety is lifted across the kingdom of Bahrain from June 1, 2011," state news agency BNA quoted the king's decree as saying. It had been due to expire in mid-June.

 

Bahrain declared emergency law in March before quelling the protests calling for greater political freedoms.

 

As Bahrain moved to put down the protests, neighboring GCC states led by Saudi Arabia sent troops to assist the Bahrain forces. Iran has criticized the move accusing the Saudis of “occupying” Bahrain.

 

The main Shi'ite opposition group Wefaq welcomed the king's move to lift emergency law as "very good news" and said it was the first sign authorities were relaxing their grip.

 

At least 29 people, all but six of them Shi'ites, have been killed since the protests started in February. The six non-Shi'ites killed were an Indian and a Bangladeshi and four policemen, several of whom were hit by cars.

 

May 8, 2011

 

 

Analysis and Forecast: Decreasing Risk


 

The lifting of the state of emergency, although only a few days before it was due to expire, sends a signal of reconciliation.

 

The Bahraini government’s move, which has been welcomed by the country’s main Shiite group, may indicate that the government is ready to embark on a national reconciliation. However, the challenges facing both sides remain enormous. Shiite lawmakers have resigned from parliament in protest and hundreds of Shiites are understood to have lost their jobs after strike action. The fact that the authorities have decided to make this gesture is a strong indication that a reconciliation is now more likely than previously.

 

Beside the difficult local political issues that need to be addressed, the country faces an uphill struggle in addressing the negative image it has created. Many financial institutions have relocated to neighbouring states like Dubai, although on a temporary basis. Bahrain needs to demonstrate to those that the country has returned to long-term stability before they are convinced to return. It is estimated that the losses accumulated as a result of those relocations and other impacted industries has cost Bahrain over US $ 5 billion, almost a quarter of its GDP.

 

Although the move is a positive one, both politically and economically, there remains serious challenges for both the government and opposition to address, including greater integration of the Shiite majority in government and businesses.

 

The figure below shows the population make-up of Bahrain: