Kuwait, Saudi Arabia and UAE pledge $10B for Bahrain

FILE - In this Oct. 3, 2011, file photo, a window cleaner, lower right, works on an office tower in the capital of Manama, Bahrain, that bears images of Bahraini King Hamad bin Isa Al Khalifa, center, Prime Minister Khalifa bin Salman Al Khalifa, left, and Crown Prince Salman bin Hamad Al Khalifa, right. Bahrain said Thursday, Oct. 4, 2018 that Kuwait, Saudi Arabia and the United Arab Emirates pledged $10 billion to support the island kingdom, helping it avoid defaulting on loans as it tries to restructure its finances. (AP Photo/Hasan Jamali, File)

DUBAI, United Arab Emirates — Bahrain said Thursday that Kuwait, Saudi Arabia and the United Arab Emirates pledged $10 billion to support the island kingdom, helping it avoid defaulting on loans as it tries to restructure its finances.

Bahrain, though the first Arab nation in the Persian Gulf to strike oil, had faced the specter of defaulting on a $750 million Islamic bond repayment due on Nov. 22. The International Monetary Fund in late May warned that Bahrain's public debt now represents 89 percent of its gross domestic product, while reserves are low.

As part of the bailout, Bahrain pledged in a statement Thursday night to eliminate the country's debt by 2022, aiming to restructure its finances to save $2.1 billion annually. Those savings will come in part through budget cuts, voluntary retirement of government employees and "streamlining the distribution of cash subsidies," the kingdom said.

"Today's announcement demonstrates our commitment to putting the government's finances on a solid and sustainable footing," Bahrain's deputy prime minister, Sheikh Khalid bin Abdulla Al Khalifa, said in a statement.

Bahrain previously received $10 billion in aid pledges during its 2011 Arab Spring protests from members of the Gulf Cooperation Council, a six-nation bloc of Gulf Arab states. Other aid has flowed into Bahrain from Saudi Arabia, which wants to shore up support of the island's Sunni monarchy as it continues a yearslong crackdown on dissent among its majority Shiite population.

However, that largess from its neighbors dwindled after oil prices crashed to $30 a barrel in January 2016. Benchmark Brent crude since has rebounded to near $85 a barrel, but Bahrain's neighbors similarly felt the pinch and remain cautious.

While Bahrain pegs its dinar against the U.S. dollar, it recently has taken a beating in trading. The cost of insuring Bahrain's debt against default for five years has risen to the highest levels since records began in 2008.

While pledging to reform its budget, any cut to subsidies or cash handouts likely will draw anger in Bahrain. Recent efforts to reform its government pension system even saw its typically rubberstamp parliament rise up against it.

Bahrain is home to the U.S. Navy's 5th Fleet and a British naval base.

___

Follow Jon Gambrell on Twitter at https://twitter.com/jongambrellAP . His work can be found at http://apne.ws/2galNpz .

Must Read

Report examines grim Bangladesh leather trade,...

Mar 25, 2017

Hazardous, heavily polluting tanneries, with workers as young as 14, supplied leather to companies...

Wounded and 'afraid,' Rohingya seek Bangladesh...

Sep 5, 2017

With thousands of Rohingya refugees streaming across the swampy border into Bangladesh, one...

UNHCR: 123,000 Rohingya refugees have fled Myanmar

Sep 5, 2017

The UN refugee agency says about 123,000 Rohingya refugees have entered Bangladesh since violence...

Nearly 3 weeks into Rohingya crisis, refugees...

Sep 15, 2017

Nearly three weeks into a mass exodus of Rohingya Muslims fleeing violence in Myanmar, thousands...

The Latest: Amnesty decries burnings targeting...

Sep 14, 2017

The Latest:UK says suffering of Rohingya an 'abomination'.

About Us

Get all the up-to-date breaking news about politics, business, entertainment, sports, lifestyles, weather, traffic, and local news in a seamless digital environment only in Morning Dispatcher.

Contact us: sales[at]morningdispatcher.com

Subscribe Now!

Quick Links

HomePress