Carnegie Endowment Paper Highlights Concerns with Bahrain’s Fragility and Its Security Sector Procurement

Recently, the Carnegie Endowment for International Peace published a paper by Jodi Vittori, a nonresident scholar in Carnegie’s Democracy, Conflict, and Governance Program, on “Bahrain’s Fragility and Security Sector Procurement.”  Vittori’s analysis addresses three principal topics:

(1)  The Political and Economic Anatomy of the Bahraini Regime: Vittori identifies three factors that she terms the pillars of Bahraini regime survival: (i) the Sunni royal family’s maintenance of its power “through absolute control over politics”; (ii) the monarchy’s selective distribution of patronage “from oil rents to preserve a small but crucial coalition of supporters, particularly within the security sector”; and (iii) the regime’s deliberate exploitation of sectarian divisions and institutionalization of sectarian cleavages.” She also notes that the monarchy’s control of state resources and of information about those resources – including oil and gas revenues, the Bahraini sovereign wealth fund, and tax revenues – provides “a massive, unaccountable slush fund for whatever the monarchy chooses to spend it on, including expensive security sector purchases.”

(2)  The Regime’s Discontents: Sectarian and Cross-Sectarian Grievances: At the same time, the regime is the focus of both sectarian and cross-sectarian grievances, stemming from both “[t]he regime’s increasingly authoritarian behavior” and the country’s poor economy. Vittori notes, for example, that “[d]espite the roughly $50,000 per capita GDP, wages have been flat and the median income is only $13,300 per year for private sector jobs and $18,600 for public sector ones.”

(3) Bahrain’s Security Sector and Risks to Stability: Vittori states that “[t]he Bahraini security sector is essential to maintaining the monarchy’s power.” But she also recognizes that foreign powers – most notably Saudi Arabia and the United States – “play an outsized role in Bahrain’s security.”  Particularly noteworthy is the relationship of the security sector to the United States.  Vittori estimates that about 85 percent of Bahrain’s weapons come from the United States.  In particular, “[j]ust the known U.S. purchases between September 2017 and September 2018 amount to $6.22 billion, or over four and a half times the publicly declared $1.4 billion defense budget for 2017.

Vittori further states that “[t]he lack of transparency and oversight in Bahrain’s defense procurement process raises the likelihood that this multi-billion-dollar budget is rife with corruption.”  The government “exempts all military procurement from public tender,” the Parliament and the National Audit Court cannot examine the security sector, there are “no restrictions on the use of agents or intermediaries in procurement contracts . . . and no anticorruption requirements for suppliers,” and the government metes out severe punishment to “anyone in the country publicizing any information about corruption associated with the security sector . . . .”  Vittori concludes that “[]he very high levels of spending for Bahrain’s security sector and significant risk of corruption therein pose a risk to the country’s economic and political stability.”

In light of the “tremendous leverage” that the United States and other Western nations have over Bahrain, Vittori offers a number of recommendations that focus on security sector procurement reform.  These include influencing Bahrain to publish a national security strategy, Western governments’ insistence “on extra scrutiny of all contracts associated with Bahrain,” encouraging Bahrain to develop a timeline and actin plan for adherence to international contracting standards, requiring the Bahraini government to submit audited statements of security-sector procurement, and using U.S. leverage over Bahraini procurement to press for reforms.

Note: Anti-bribery and corruption compliance teams strategic and political risk teams in aerospace and defense companies, or in companies with other operations in the Middle East, should read this paper for its general observations about the operations of the Bahraini monarchy, and for its insights into the significant potential for corruption in the Bahraini security sector.  Although, as Vittori commented, “[t]he Bahraini monarchy does not permit much social science research,” her paper has drawn on an extensive array of open-source materials for a nuanced analysis of the issues.

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