Steve Royston

Why Bahrain Trumps Dubai – Demographics

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Here in Bahrain, protesters and opposition groups are in talks with the government about resolving the grievances that led to the Pearl Roundabout confrontations. Among the well-heeled expatriate community, there is talk about the economic damage that the protests have already wreaked on the country. There’s also speculation about the long-term damage – credit rating agencies downgraded, rumours of one company or another planning to pull out, and others revisiting their decisions to invest.

In a recent post to, James Mullen argues that Bahrain’s loss is likely to be Dubai’s gain. For all its social problems, he sees Dubai as an enduring oasis of stability within the Middle East – a place where a young expatriate can “breathe”, and create a new life away from the constricting atmosphere of his or her home country.

A couple of years ago I was looking for a new base in the Middle East. I had spent a very challenging year in Riyadh. This reconnected me with a region where I had spent the best part of a decade in the 1980s. I wanted to stay in the Middle East both for business and personal reasons. When I looked at all the pros and cons, it came down to a chioce between Dubai and Bahrain. I chose Bahrain for what I considered at the time to be sound business reasons.

I continue to believe that I made the right decision, and I’m going to explain why.

By the time you get to the end of this post, you might think that I’ve been drinking the same tea as Colonel Gadaffi. But I need to explain a personal journey that led me to Bahrain, so forgive me if I stop off in unlikely places.

Unlikely as this might sound, Jeddah was where I learned to breathe. I’d left the stinking piles of garbage that had only recently been cleared away after Britain’s Winter of Discontent for another city with its fair share of garbage. In those days the city was half the size of the crowded, pot-holed mess that it is today. The infrastructure beyond the Balad – the coral buildings at the heart of the city –  was relatively new, the roads hadn’t clogged up, and within a year the garbage that occupied every vacant plot in the city had been cleared away.

Although Jeddah in the 80s went through a similar experience to the rest of Saudi Arabia as the government put the brakes on social reform in the aftermath of  the 1979 Mecca insurrection, it was still the most liberal city in the Kingdom outside the hermetically-sealed pods that Aramco had set up for its expatriate workforce. Women could wander around the city without needing to wear an abaya, let alone a headscarf. The growling presence of the mutawa was always in evidence. But the moderating influence of Prince Majed, then the governor of Mecca, seemed to keep them focused on the eliminating the vices of other sections of the community. By and large they left Western expatriates alone.

To give you an idea of the level of tolerance, one of my co-workers got drunk on Christmas Day, danced across the Madinah road playing an Irish air on his fiddle, and was politely escorted back to his compound by an indulgent traffic policeman.

In those days the Western expatriate community was large. There were at least 40,000 North Americans and Europeans in Jeddah at any one time. And we had a ball. There was plenty to do. Jeddah saw some of the best theatre outside the professional stage. Musicals with casts of thousands, Shakespeare, West End hits. For the sporty, there was sailing and diving off undeveloped beaches to the north of the city. There were still miles of pristine coral reef, and the occasional wreck to explore.

Jeddah was never expatriate nirvana. Driving was dangerous. Work had its frustrations. You lived on a knife-edge between achievement and the dreaded PNG day – the day on which for some reason you might find yourself on the next plane home.

But if you made the effort to reach out to the local community, you could do so without fear. Crime was low. We broke lots of rules, but tried to do so without embarrassing the hosts.

I had arrived in the city with a couple of suitcases. I left with a family and a house-full of stuff. In the end, what caused us to leave was a sense that it was all transitory. Saudi Arabia was never a country in which you could put down roots. You made plenty of friends, and indeed many of them are friends to this day. But the maasalama party was a continual feature of the social life – people moving on to pastures new.

We also yearned for diversity. The expatriate community was bound together by a limited number of common denominators. Chief amongst them was money. And we grew tired of the endless conversations about this investment, that fund, the pound-riyal exchange rate. Nobody was struggling. Everybody was on the path towards financial security. I longed to return to a world where people were also struggling – waging their personal jihads against adversity, sometimes succeeding and sometimes not. Where the vast majority of the people you met were not trundling down the track towards a gin-soaked hacienda.

So at the end of the 1980s we finally held our own maasalama party.

Within a couple of years I had started a business with a partner that kept me away from the Middle East for the best part of 20 years. But in the early 90s we missed some aspects of life in the Middle East – the winter sun, the schwarmas and the souks. So we started spending a couple of weeks every winter in Dubai. We initially stayed in a hotel called the Chicago Beach. It stood where the Jumeirah Beach Hotel now sits. Dubai in those days was far from the metropolis it is today. The tallest building in the city was the World Trade Centre, an unremarkable concrete tower that dominated an otherwise relatively empty Sheikh Zayed Road.

Our holidays in Dubai were pretty simple. We had two young kids, and they wanted the beach. I taught my youngest to swim at the Chicago Beach. It was on our second trip to Dubai that we rediscovered one of the endearing aspects of the Arab culture – love of children and personal generosity.

Our elder daughter was pony-mad. She had heard about the Godolphin stables, and wanted to visit them. So she wrote a letter to Sheikh Maktoum, the current ruler, complete with a crayon drawing of her pony, telling the Sheikh how much she loved horses, and could she please visit Lammtara, the previous year’s Derby winner, when she came to Dubai?

We didn’t really expect the letter to reach the Sheikh, let alone for him to respond. But two days before we left for the holiday, we had a call from his personal secretary. The Sheikh had read Tara’s letter, was very touched by it, and had instructed him to contact us at our hotel when we arrived.

Came the day, and Omar showed up in a gleaming Mercedes 500 to collect us. He took us to Godolphin, showed us round the stables and sat with us as Tara had a ride on one of the Royal ponies. He then took us to the Hilton Beach Club, where we spent a pleasant afternoon chatting about Dubai and the Sheikh’s plans for the country. Even in the early 90s it was clear that the Maktoum family saw Dubai as the Hong Kong of the Middle East.

At the end of the trip, we discovered that all of our incidental expenses at the hotel had been picked up by Sheikh Maktoum. Before he received Tara’s letter, he didn’t know us from Adam. That personal gesture had us rooting for Dubai ever after.

In subsequent years we kept coming back to the city. We saw the new malls, hotels, and tourist attractions sprouting up all over the place. We sat in the Jumeirah Beach Hotel watching the seven-star Burj al Arab rise from the waters over three years. But after a while, we began to feel that Dubai was losing something. The expatriate population began to grow like crazy. It became hard to see, let alone meet, an Emirati, except at the gleaming new airport. The city began to feel like an international economic colony. In the 2000s, it felt like a city of chancers – on the make and looking for a fast buck. The Arab experience had gone ersatz. It had lost its charm. We stopped going.

Fast forward to 2009. I was less familiar with Bahrain than with Dubai. I had made the occasional visit from Riyadh, but I can’t say that the experience was deep enough to make any decision on the basis of personal preference. My decision to set up in Bahrain was strictly business-driven. I expected to be doing business in Saudi Arabia, and Bahrain is less than an hour’s drive across the causeway from the Saudi oil economy – concentrated in Al-Khobar, Dammam and Dhahran. Riyadh, the Saudi capital, is four hours’ drive away. Jeddah is 90 minutes by air.

Other cities in the Gulf are within a maximum of 90 minutes flying time from Manama.

From Dubai, none of the three main economic conurbations in Saudi Arabia are easily accessible by road. So to get to Riyadh you have to fly, hire a car if you are brave enough, or take taxis from one place to another.

Then there was the ease of setting up business in Bahrain. I didn’t want a Bahraini partner initially, because I wanted to get to know a few potential partners before I took that step. Setting up a 100% foreign-owned entity was relatively straightforward. Yes, the process was more bureaucratic than I would have liked. But one becomes used to jumping through seemingly illogical hoops in the Middle East. Many of them relate to silo mentalities within individual ministries. But with its Economic Development Board, Investor’s Centre and e-government portal, it seemed to me that the country was working on removing those hoops through structures that transcend the boundaries of the ministries.

So Bahrain got my vote.

What initially impressed me about the country as a place to live and work was that it felt like a society in which the Bahrainis played a far more diverse part than Dubai. 50% of the population is Bahraini. And it is impossible live in the country without meeting and doing business with Bahrainis. This is not a country of landlords sitting back and letting its expatriate population do the work while its own nationals sit in offices behind large desks. It’s true that there are plenty of desk jockeys, but you will also find locals driving taxis and working in factories.

The divisions and problems in Bahraini society are well documented by the international media, so I don’t intend to regurgitate them here. For all its problems, the upside is the country has a wealth of educated and talented workers. Not all of them have realistic aspirations. In common with many of the other Gulf states, there is a cultural inclination to go for government work and managerial roles, and a corresponding disinclination to invent, create and take risks. But that attitude is slowly changing.

On a personal level I have found it far easier in Bahrain to meet, interact and build friendships with local people. I don’t feel as though I’m living in an expatriate bubble. Bahrain feels like a real country. And people looking from afar should be aware that none of the recent demonstrations have been threatening to non-Bahrainis. Yes, the Bahrainis are concerned about the number of expatriates in the country, and would like more locals and less expatriates in the workforce.

But I have never felt less than welcome here. In Bahrain, Arab hospitality is more than just ritual. What is equally significant is that as a society it feels less transient than some of the other Gulf states. The Bahrain experience is different from Jeddah in the 80s and Dubai in the 90s.  I know people of British origin who were born here and intend to die here.  Perhaps I’m being unfair to Dubai, but I have a sense that for the overwhelming majority of expatriates it is a temporary home that they will eventually abandon once it has served its purpose. Here you will find genuine affection for Bahrain and the Bahrainis. It’s hard for expatriates in Dubai to feel the same way if the majority rarely interact with its local population.

So what of the future for Bahrain? I actually believe that if the country can get through its current upheaval and resolve many of the long-standing grievances within the population, it can fly. This is not intended as a warm and fluffy message of support. It’s based on the fact that the country has already travelled further than any of its neighbours down the path of open-mindedness that will be essential if it is to progress from trading and manufacturing to creating and inventing.

There is no lack of motivation here. I have met many passionate Bahrainis who put the cynicism of the average Westerner to shame. There is plenty of passion among both the protesters and those who have demonstrated on behalf of the government.

If the reforms can channel that passion into a constructive direction, Bahrain has as much if not more going for it than any other Gulf state. Like Dubai, it does not have the natural resources of its neighbours. It must like on its wit, not its oil. But its demographics mean that it has a greater chance than Dubai for its population to create benefits for itself, rather than reap them from others.

That’s why, with all due respect to Dubai, I’m betting on Bahrain in the long term. And as a place for a Western expatriate to live and work, it beats Dubai any time. As I said before, it feels like a real country.

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