Bahrain Bankers Relieved, Eye Infrastructure Projects

Bahrain Bankers Relieved, Eye Infrastructure Projects

"Thank God Feb. 14 went fine to a great extent. There is hope that the political situation will be seen as stabilised to a great extent and agencies start increasing ratings," Abdulkarim Bucheery, chief executive officer of Bank of Bahrain, said at a meeting with reporters.

February 20, 2012 1:46 by Reuters

Bahraini bankers expressed relief on Sunday that the Feb. 14 anniversary of last year’s democracy uprising passed without major disruptions but said lenders needed to see more infrastructure projects in the Gulf bank and tourism hub.

Bahrain, home to the U.S. Fifth Fleet, has been in turmoil since a protest movement erupted on Feb. 14 last year and the government imposed over two months of martial law to crush it. Some ratings agencies downgraded Bahraini banks.

Anti-government activists had vowed to reoccupy a central roundabout in Manama on this week’s anniversary, but security forces kept tight guard on the traffic intersection, which has remained closed to the public.

There were clashes all week in Shi’ite districts outside the capital, where riot police deployed armoured vehicles, watercannon and helicopters to prevent the revival of a movement driven by Shi’ites who say they face political and economic marginalisation. The government denies this.

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

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, who want democratic reforms that would give the elected parliament power to form governments. Twelve have been deported.

The protests against a government dominated by the Sunni Muslim Al Khalifa family 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,” 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. Ahmed was previously chief operating officer at the Economic Development Board and is seen by many as the kind of technocrat needed in government.

Ahmed’s 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 carrier Gulf Air.

“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, told Reuters. (Editing by David Cowell)