A little over four years after Sheikh Hamad bin `Isa al-Khalifa announced a sweeping reform plan, Bahrain's fragile liberal experiment is poised to stall, or, worse, unravel. The overlap of political and social conflict with sectarian tensions makes a combustible mix. If steps are not urgently taken to address the grievances of the large and marginalised Shiite community -- as much as 70 per cent of the population -- Bahrain, which is often touted as a model of Arab reform, could be in for dangerous times. The U.S., which has extolled Bahrain's reforms and is the country's principal benefactor, should moderate its praise, urge the government to see through what it started in 2001 and find ways of raising the delicate issue of sectarian discrimination.

Bahrain's problems go beyond sectarian discrimination to include protracted conflict between government and opposition, mounting unemployment, high rates of poverty, and a rising cost of living: establishing a stable political system requires altering relations between government and citizens as a whole.

The government recently has taken steps to repair what was once a dysfunctional autocracy. Still, it so far has failed in two important respects. First, reform has been uneven, leading many domestic critics to view it as an attempt less to establish a new political contract between rulers and ruled than for the royal family to formalise and institutionalise its grip on power. Secondly, it has done virtually nothing to tackle sectarian discrimination and tensions. Indeed, the latter have been exacerbated, as the majority Shiite community feels increasingly politically marginalised and socially disadvantaged.

Bahrain's Shiites also suffer from, and are angered by, widespread suspicion among officials and Sunnis regarding their national loyalty and ties to co-religionists in Iraq and Iran. These views stem from misconceptions regarding relationships between the Shiites' spiritual and political leaderships. They ignore the broader trend over the last two and half decades, which has seen the country's sectarian tensions fuelled far more by local political and social frustration than by national religious irredentism.

Of greatest concern today are increasingly aggressive moves by the government, which more and more resorts to police tactics and authoritarian measures to maintain order. At the same time, the moderate Shiite leadership's control over more confrontational elements within its community is showing signs of wear. While some opposition members advocate reconciliation, others are pushing for a more dramatic showdown. As this dangerous dynamic sets in, government and opposition moderates may lose their tenuous hold on the situation. Both need to act quickly to prevent this from happening.

Amman/Brussels, 6 May 2005