Since 2011, the Kingdom of Bahrain has experienced an increase in terrorism and episodes of organised political violence. These have been conducted by a small, efficient, collection of Iran backed groups including: Saraya Al Ashtar, the Youth of 14 February and Hezbollah. While such activities have been limited and, to a large extent, overcome by the country’s police and counterterrorism agencies, it is important to note that: 1. the violence is aimed at eroding national cohesion by targeting the national economy and leadership, 2. problems facing Bahrain are being exploited by the international media which itself adds to the economic costs facing Bahrain. This work maintains that Iran-backed terrorism is inflicting economic damage on Bahrain with the overall objective of undermining the welfare of the country by attempting to reduce foreign investment and tourism while adding additional security costs to the national budget.

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This is the first in our new series of Special Reports that explores complex issues in the Arab Gulf.