* Lifting martial law could revive business, tourism
* Opposition say abuse continues, change is only cosmetic
* Gulf Arab troops set to stay, no democracy talks in sight
By Andrew Hammond
MANAMA, May 25 Bahrain will lift a state of
emergency next week that was imposed when the government
suppressed a democracy protest movement in March with the help
of Saudi and other Gulf Arab forces.
After two months of negative publicity around the world over
its crackdown and a collapse of business and leisure tourism,
Bahrain hopes for a return to normalcy on June 1, following the
end of night curfew in Manama this week.
Martial law was imposed in mid-March when the authorities
broke up a sit-in of thousands at a traffic roundabout in
Manama. Ending the emergency situation two weeks early, the
government hopes, will send the right signals to the outside
But democracy activists say that while the ruling Al-Khalifa
family and the Sunni Muslim elite are keen for business to
return, they have no intention of easing up on behind-the-scenes
repression of the majority Shi'ite population.
They would be helped in that by a purge of people who took
part in the protests and other Shi'ites in many companies over
the past two months. Clashes between police and protesters in
Shi'ite villages would be tolerable since the country has often
experienced such street unrest in the past and a media crackdown
makes it less likely to get reported.
Some areas saw protests this week after a military court
upheld the death sentence against two people over the killing of
A boon for the government would be reinstating Bahrain in
this year's Formula One motor racing calendar, after it was
forced to postpone its grand prix scheduled for March. The
championship is due to take a decision on the issue on June 3.
"Removing the curfew and ending the law earlier than the
defined period shows things are moving better than expected and
life is returning to normal," said Jamal Fakhro, deputy speaker
of parliament. "Everybody is excited."
U.S. President Barack Obama criticised Bahrain -- an ally
that hosts the U.S. Fifth Fleet and seen as a bulwark against
Iran -- during a speech last week but pressure has been slight.
U.S. and British warnings against travel to the country remain.
"The only way forward is for the government and opposition
to engage in a dialogue and you can't have a real dialogue when
parts of the peaceful opposition are in jail," Obama said,
outlining the U.S. approach to uprisings sweeping the region.
He criticised the crackdown, saying mass arrests and brute
force were at odds with the universal rights of Bahrainis and
would not make legitimate calls for reform disappear.
But in a sop to the government, he said Bahrain had a
"legitimate interest" in the rule of law and that Washington
remained committed to its security. He said Iran, which
complained to the United Nations over the crackdown, had tried
to take advantage of the turmoil.
British Prime Minister David Cameron drew criticism last
week for appearing in a photocall outside Downing Street with
visiting Crown Prince Salman bin Hamad al-Khalifa. While Cameron
has been a vocal critic of Libyan leader Muammar Gaddafi, he
also visited Bahrain with a delegation of arms dealers earlier
this year, leading to accusations of hypocrisy.
BUSINESS BOUNCE SOUGHT
The turmoil worsened Bahrain's already tarnished image as a
financial hub. Its investment firms have posted steep losses
since a regional property bubble burst in 2008, ending their
business model of arranging financing for real estate projects.
Bankers have said lenders officially avoided closing down
their offices, quietly moving some staff to Dubai to prevent
relationships with the Bahraini government becoming strained.
The Bahrain Economic Development Board said in April that
only four financial services institutions planned to leave. But
banks could be hit by higher volumes of loan defaults after the
unrest hurt the cash-flows of corporate loan customers.
Saudi tourist traffic -- which fills Manama's malls and
nightclubs during the weekend -- has been reduced to a trickle.
"We survived, but hotels that focus solely on business
travel have suffered," said Marwan Haddad, a sales director with
Marriott hotels in Manama.
Saudi tourism was a major loss for the country.
"The main business for the weekend is GCC travellers in
general and Saudi travellers specifically -- for cinemas,
restaurants, malls and hotels," Haddad said.
But he said business travel had picked up in May and
conference bookings were now coming back for the last three
months of the year.
Removing the state of emergency, he said, is "a strong
message to the world that Bahrain is back in business and safe."
Politically, the government also wants to show that things
are returning to normal. Around 515 people were released from
detention this week.
But military trials not only continue, new cases are coming
court, such as that of a 14 year-old boy reported by rights
activists on Tuesday.
Two Bahraini journalists who work for Western media were
detained and mistreated by police this week in the first such
incident against foreign media. Officials say abuse is not
systemic but the large volume of such reports suggest otherwise.
"(Lifting the emergency) is more a message to the business
community and to get back Formula One," said human rights
activist Nabeel Rajab.
"But inside is totally different to the image presented to
the outside world. Things look no different in terms of
repression and security measures. In fact, I've seen an
escalation -- even those who were released from detention are
being called up again for military tribunal."
NO DIALOGUE IN SIGHT
At the same time, there is no indication of any desire
within the ruling establishment to take up dialogue with the
opposition that was on the table until the protests were broken
up on March 17.
Talks offered by the Crown Prince had gone nowhere as the
opposition was split over aims.
Three Shi'ite groups said in early March they wanted to
topple the monarchy and transform Bahrain into a republic. But
Wefaq, the biggest opposition group which sought an elected
government and end to discrimination in jobs and housing against
Shi'ites, appeared to vacillate on talks.
The government last month raised legal action against Wefaq
on charges of seeking to "overthrow the constitutional order"
and taking instructions from Shi'ite clerics.
One opposition figure, who did not wish to be named for fear
of arrest, said hardliners within the ruling family want to
bypass Wefaq and encourage the formation of a new opposition.
"Bahrain's political scene has fundamentally changed. The
government is now encouraging the formation of Shi'ite groups to
replace Wefaq," he said. "The government wants to sell a story
to the West that all is back to normal but on the ground abuses
will continue to silence dissent."
Afshon Ostovar, a political analyst based in Washington who
recently visited Bahrain, said there was no sign this week that
security checkpoints and tank fortifications, some near the
airport or financial centre, would be removed come June 1.
Officials have said Saudi and UAE forces will remain in the
country indefinitely and Foreign Minister Sheikh Khalid
al-Khalifa raised the prospect last week of a permanent Gulf
Cooperation Council military presence in Bahrain.
While Gulf countries fear Iran has designs on Bahrain and
that Shi'ites there could help them, Bahrain's Shi'ites reject
the idea as the kind of discriminatory attitude that makes many
oppose al-Khalifa rule in the first place.
"Judging from what's happening now, it would be a surprise
to me if lifting the emergency situation was anything more than
mostly cosmetic," Ostovar said. "They are still cracking down on
the same groups and detaining people. But maybe they are just
trying to 'clean up' before finally troops leave (the street)."
(Editing by Angus MacSwan)