Analyzing and forecasting the Gulf Cooperation Council's geopolitical environment

Bahrain and ASEAN’s Maturing Partnership

By Muhammad Zulfikar Rakhmat
June 9, 2016

Throughout the twenty-first century, the inroads made by the Gulf Cooperation Council (GCC) countries into Southeast Asia have come under increasing scrutiny. Bahrain – unlike the other GCC members – has lacked particularly close ties with the Association of Southeast Asian Nations (ASEAN). Yet that situation has begun to change significantly in recent years.

Bahrain’s ties with ASEAN countries date back to the 1970s, but official ties were not established until the 1980s and 1990s. ASEAN countries began to realize the benefits they could reap from Bahrain, and – starting with Malaysia in 1974, Thailand in 1977, the Philippines in 1978, Indonesia in 1984, Singapore in 1985, Brunei Darussalam in 1988, Vietnam in 1995, Laos in 2002, and Cambodia in 2009 – they opened official diplomatic missions in Manama. Over time, Bahrain’s government has responded reciprocally.

Diplomatic contacts between ASEAN states and Bahrain have grown relatively strong. In 2009 the Ministers of Foreign Affairs of the member states of ASEAN and the GCC adopted the GCC-ASEAN Joint Vision in Manama. Four years later, the third GCC-ASEAN meeting took place in the Bahraini capital.

Various multilateral and organizational frameworks, including the Organization of Islamic Countries (OIC), particularly Muslim-majority Indonesia and Malaysia, the Asia Cooperation Dialogue (ACD), and the annual GCC-ASEAN meetings, have strengthened political ties between Southeast Asian states and Bahrain. Numerous political positions embraced by ASEAN members, which often align closely with Manama’s, have further cemented such bonds. In 2011 Malaysia supported Saudi/GCC initiatives with respect to “achieving peace, reconciliation, and long-term stability in Bahrain.” Interestingly, Bahrain’s royal Sunni family reportedly sought Indonesian and Malaysian mercenaries to help counter protestors from Bahrain’s Shi’ite community amid the island nation’s post-2011 political unrest.

Whereas energy largely defines ties between most GCC members and Southeast Asian countries, this sector is far less significant, although not entirely absent, in Bahrain’s relationship with ASEAN. In March 2016, the Bahrain Economic Development Board (EDB), a public agency dealing with attracting foreign investments to the country, and the Malaysia Petroleum Resources Corporation (MPRC) inked an MoU to boost Bahraini-Malaysian cooperation in the oil and natural gas sectors.

It is hardly surprising that energy plays a minor role in Bahraini-Southeast Asian relations given that the island kingdom exports gas and oil on a significantly smaller scale than do other Persian Gulf nations. Given the increasing energy demands in ASEAN markets, however, and growing interest among ASEAN state-owned companies to diversify their sources of energy, this reality may change. At the same time, it is difficult to forecast such future developments, as Bahrain, like other GCC states, is looking at policies aimed to transition away from oil.

Nonetheless, overall trade between Bahrain and ASEAN countries has increased significantly. In 2011 Bahrain’s trade volume with Indonesia surpassed USD 140 million. Although there is a lack of data on Bahrain’s trade with the other ASEAN countries, one can assume that these figures have grown as well for several reasons.

Southeast Asia, with approximately a USD 2.5 trillion GDP, has become a vital economic point for the Gulf Arab countries. This is largely due to the region’s large dependable consumer markets, with a total population of 620 million and positive long-term prospects rooted in a sustained annual GDP increase of 4.6 percent. This growth shows no signs of decreasing, especially after the establishment of the ASEAN Economic Community in late 2015. ASEAN countries are a source of primary resources, especially related to foods, commodities and labor. Meanwhile, for ASEAN governments to invest in Bahrain is beneficial, given that the island kingdom offers 100 percent foreign ownership of businesses with no taxation. Moreover, Bahrain is a relatively untouched, albeit small, consumer market and a hub for economic expansion in the Persian Gulf and the greater Middle East.

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Muhammad Zulfikar Rakhmat is a researcher at the University of Manchester in the U.K. His research focuses on Asia-Middle East relations.