The big U.S. link with Bahrain is, simply, the Fifth Fleet. We station roughly 3,500 personnel and 16 vessels in Bahrain. My direct contact with the military presence there took place unexpectedly in a bar in the ground floor of a Best Western in Manama. The decor was country-and-western, the music was crunk, the males were mostly off-duty American sailors, and the women were disproportionately from Thailand. Yes, I left immediately; why do you ask?
Bahrain does not provide the use of their territory for free. We currently pay about $9.6m a year for the use of about 66 acres and 15 berths. But that isn’t all: in 2010, we also provided the Bahrain Defense Forces with $20.8 million in assistance; this year’s budget request is for $21.7 million. That comes to a little over $1,500 for every BDF effective; not a small chunk of change. The U.S. presence is governed by a 1992 treaty (T.I.A.S. 12236) ... most of which is classified.
OK. Do we get anything else for our protection? Well, Bahrain has sent troops to Afghanistan: about 125 Bahrainis guard Marine encampments in Helmand. (If you divide all our military aid by 125, you get about $173,600 per Bahraini; a bargain compared to Blackwater.) We signed a free trade agreement in 2006. That agreement (building on an earlier 2001 treaty) included provisions protecting U.S. investments from expropriation. That, plus our help in resolving a border dispute with Qatar, got Occidental a 48% stake in a field that will eventually produce 100,000 barrels per day of oil and 2.5 million tcf of natural gas. Even with a 46% tax rate on oil companies, that will be a lot of revenue. Oxy expects to invest about $1.5 billion in the field. Under reasonable assumptions (say a 10% cost of capital and an $80 oil price), that investment could clear over $830 million a year, which ain’t bad. Try doing that in Ecuador! And since Oxy does in fact pay income taxes to the U.S. federal government, the gain to Americans could come to, uh, about a dollar a year per person.
In addition, to Oxy, ChevronTexaco got an exploration concession in the formerly-disputed area with Qatar in 2001. (Strangely, so did Petronas, from Malaysia, and some goobers from Calgary. I think we could have complained about that ... except eventually they all pulled out in favor of a Thai outfit. The link has a pretty good rundown of the state of play in Bahraini hydrocarbons.)
In short, the U.S. gets a base that helps us keep the oil lanes open and contain Iran; in return we get some useful soldiers and some oil concessions, guaranteed by the specter of ICSID. Not too shabby. Viva el imperio; maybe Randy McDonald was right.
What about other parts of the relationship? Well, Wikileaks tells us that the Bahraini government likes to claim that the periodic unrest in the Kingdom is due to Iranian and Syrian machinations, but the State Department isn’t buying it. In 2008, they reported, “Small but violent bands of Shia underclass youth, frustrated with persistent discrimination and what they perceive as too gradual a pace of reform, clash with police nearly every week. The Sunni minority, which rules the country and controls all security forces, has generally acted with restraint, but it takes only one mistake to provoke a potentially disastrous escalation.”
In short, if Bahrain does go up (and it is not clear that it will) the United States will not have been surprised.
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