CRISISBOOM

Police fired tear gas into a crowd of protesters in the Diraz area today. Photographer: -/AFP/Getty Images

Bahraini riot police were deployed to break up protests across the island nation as demonstrators, inspired by revolts in Egypt and Tunisia, demanded more political freedom and jobs.

Police fired tear gas into crowds in the areas of Diraz and Bani Jamrah. Earlier, residents of the Shiite Muslim village of Nuweidrat said clashes broke out between activists and police after morning prayers. Police were present on the outskirts of Nuweidrat, where Shiite flags adorned buildings along alleyways.

”We were starting our peaceful protests when riot police attacked us with tear gas,” Nabeel Rajab, head of the Bahrain Center for Human Rights, said in an interview after the protest in Bani Jamrah was dispersed. “We will continue our protests until the government hears our demand.”

A group called “the Revolution of 14th February in Bahrain” used Facebook Inc. to promote the protests today and has more than 13,400 followers on the social-networking website. The date marks the anniversary of the establishment in 2002 of a second constitution, which provided an elected parliament in Bahrain, home to the U.S. Navy’s Fifth Fleet, and made the kingdom a constitutional monarchy.

The Arab world has been shaken over the past two months by anti-government demonstrations over economic hardship and corruption that drove Tunisian President Zine el Abidine Ben Ali from office on Jan. 14 and forced Egypt’s Hosni Mubarak to resign and cede his presidential powers to the country’s armed forces on Feb. 11. Bahraini Shiites, who represent between 60 and 70 percent of the population, say they face job and housing discrimination by the government.

‘Protests Accepted’

In Bahrain, “protests are accepted and sanctioned by the law,” Foreign Minister Khalid bin Ahmed bin Mohammed al-Khalifa said today in an interview in the capital, Manama, before the rallies began. “I don’t see any reason for violence from any side. This is something we aren’t seeing as a domino effect. Maybe some people will look at it because it happened in Tunisia, because it happened in Egypt, let us have one day in Bahrain. To have the same effect, no, it will not.”

King Hamad bin Isa al-Khalifa ordered an increase in food subsidies and social welfare payments as the government sought to ease the burden of rising food prices, the Bahrain News Agency said Feb. 3. He also ordered the payment of 1,000 dinars ($2,653) to each Bahraini family. The Information Affairs Authority began talks yesterday with the media on a new regulatory framework.

Oil, Deficit

“The one-off grant to Bahraini families follows a similar move in Kuwait, but Bahrain has less leeway to carry out such measures, as it has relatively low oil production and had one of the largest fiscal deficits in the Middle East last year,” Jane Kinninmont, an editor and economist at the London-based Economist Intelligence Unit, said in an e-mail. “Most people will welcome a grant but it will not necessarily change their views of the government. More important are ongoing efforts to boost foreign investment, improve education and restructure the labor market.”

The country will have a shortfall of 373 million dinars this year and 440 million dinars in 2012, the Finance Ministry said last month. Expenditure will be 2.56 billion dinars for 2011 and 2.68 billion for 2012, the ministry said.

The cost of insuring debt sold by the government rose 11 basis points today to 248, the highest since Feb. 4, according to CMA prices for credit-default swaps. The Bahrain Bourse All Share Index increased 0.1 percent today, the most since Feb. 7, to 1,470.12. About 705,240 shares were traded in Bahrain today, compared with a 12-month daily average of 2.4 million shares.

‘Deep Grievances”

“Bahrain, of any Gulf state, is the most susceptible because of the deep grievances of the majority Shiite population,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “The Shiite population is excluded from many types of government employment and municipal services in Shiite villages are below standards in other Sunni neighborhoods.”

Bahrain experienced clashes between Shiites and police before parliamentary elections in October.

Sheikh Khalid said the push for change across the region isn’t a concern for his country and may be beneficial.

“We are not worried, and are looking at it in a positive way,” he said. “This wind of transformation in the Sunni is something we should look at positively. It will be a long period of transforming societies. Let us benefit from it. The problem is socioeconomic. It isn’t as profound here in the Gulf. If it will impact in a way, it will impact the minds of the people, seeing a society opening up in a way. I am not talking about Bahrain in this case. I am talking about the wider region.”

Saudi Ties

Bahrain’s royal family has close ties with Sunni-ruled Saudi Arabia, the largest Arab economy. Many among Bahrain’s populace retain cultural and family links with Shiite-dominated Iran, Saudi Arabia’s main regional rival.

The main Shiite opposition gained one seat in October elections and now has 18 legislators in the 40-seat parliament.

Ahead of today’s planned protests, a Bahraini human rights organization urged the monarch to release detainees and open talks with opposition groups.

The king must “start serious dialogue with civil society and opposition groups on disputed issues,” the Manama-based Bahrain Centre for Human Rights said in a letter to the monarch dated Feb. 12. Measures must be taken to avoid use of violence by security forces against peaceful protests, it said.