The Development and Marketing of Bahrain's Digital Domain
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Sovereign Data: The Development and Marketing of Bahrain’s Digital Domain Robert Mogielnicki Sovereign Data: The Development and Marketing of Bahrain’s Digital Domain Robert Mogielnicki December 30, 2020 Issue Paper #11 2020 The Arab Gulf States Institute in Washington (AGSIW), launched in 2015, is an independent, nonprofit institution dedicated to providing expert research and analysis of the social, economic, and political dimensions of the Gulf Arab states and key neighboring countries and how they affect domestic and foreign policy. AGSIW focuses on issues ranging from politics and security to economics, trade, and business; from social dynamics to civil society and culture. Through programs, publications, and scholarly exchanges the institute seeks to encourage thoughtful debate and inform the U.S. foreign-policy, business, and academic communities regarding this critical geostrategic region. © 2020 Arab Gulf States Institute in Washington. All rights reserved. AGSIW does not take institutional positions on public policy issues; the views represented herein are the author’s own and do not necessarily reflect the views of AGSIW, its staff, or its board of directors. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from AGSIW. Please direct inquiries to: [email protected] This publication can be downloaded at no cost at www.agsiw.org. Cover Photo Credit: REUTERS/Hamad I Mohammed About the Author Robert Mogielnicki is a resident scholar at the Arab Gulf States Institute in Washington. An expert in the political economy of the Middle East and North Africa, he previously served as a senior analyst with the Siwa Group and head of public relations and marketing for Oxford Strategic Consulting, a United Kingdom/Gulf Cooperation Council-focused research consultancy. Prior to his consulting career, he worked as a journalist covering political and economic developments in post-revolutionary Egypt and Tunisia. His work and commentary on the region have appeared in Axios, Forbes Middle East, Al Jazeera’s Inside Story, MEED, Al Bawaba, The National (UAE), Gulf Daily News, Tunisia Live, Egypt Oil and Gas Magazine, and Egypt Daily News. Mogielnicki received his PhD from the University of Oxford’s Magdalen College, where he conducted research in conjunction with the Oriental Institute and Middle East Centre. Drawing on extensive fieldwork in the United Arab Emirates, Oman, Qatar, Bahrain, and Kuwait, his dissertation examines the political economy of free zones in Gulf Arab countries. He earned his MA in modern Middle Eastern studies from St Antony’s College, University of Oxford, and completed a master’s thesis on labor policy formulation and implementation in the emirates of Abu Dhabi and Dubai. He received his BA from Georgetown University as a double major in Arabic and government, graduating magna cum laude and Phi Beta Kappa. Robert Mogielnicki | 1 Executive Summary Bahrain is a small country with big digital growth ambitions. Enabling better data access, management, and utilization is an important economic differentiator for Bahrain. In April 2017, Bahrain’s government published a Cloud First Policy to modernize government information and communications technology, by using cloud computing services. The government introduced a Personal Data Protection Law in July to better align Bahrain’s data protection frameworks with global best practices. The Bahraini government passed another law concerning the provision of cloud computing services to foreign parties through Legislative Decree No. 56 of 2018, establishing a legal framework for hosting external content on Bahraini data centers. Bahrain’s aspirations to become a regional data-hosting hub have met with some early successes. In 2019, Amazon Web Services opened a Middle East “region” in Bahrain, which entailed the deployment of AWS data centers and linking them to the company’s global network. Bahrain’s economic policy officials also see high-growth potential in partnerships with Chinese firms. For example, Huawei and China Telecom are involved in rolling out controversial 5G mobile network infrastructure across Bahrain. Some U.S. officials fear that Chinese technologies could be leveraged for cyberespionage purposes. The Bahraini government has thus far mitigated security concerns by balancing the involvement of U.S., European, and Asian technology partners in the development of its digital domain. Challenges surrounding cyberspace and data issues in the Gulf region, however, are set to intensify. The economic shocks caused by the coronavirus outbreak and oil price rout have increased fiscal pressure on Gulf Arab governments, which will look for cheap, advanced technologies and digital applications to provide services to citizens and protect their economies. Introduction Cyberspace is a complex and contested arena, and Gulf states are pursuing ambitious digital transformation agendas to create more sustainable economies and provide better public services. However, regional governments also employ emerging technologies to monitor their citizenry and residents. The imposition of a boycott on Qatar by Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt in 2017 provoked tit-for-tat disinformation campaigns among Gulf Cooperation Council member states. Gulf Arab government agencies, state-owned entities, and critical infrastructure are targets for cyberattacks by malicious actors. Moreover, the growing involvement of Huawei and other Chinese technology firms in Gulf economies has complicated regional relations with the United States. The resulting digital domain in the Gulf is characterized by fragmentation and polarization. Bahrain offers a useful case study for examining how these dynamics in cyberspace unfold across the Gulf region. Employing a political economy-focused analytical lens, this paper argues that the Bahraini government seeks to demonstrate responsible state behavior in cyberspace by closely aligning its digital domain with commercial development initiatives. The resulting economic-oriented approach to cyberspace has helped Bahraini officials sign large-scale commercial agreements with multinational firms and attract foreign direct investment flows. Sovereign Data: The Development and Marketing of Bahrain’s Digital Domain | 2 However, this government-led strategy requires a continual demarcation and renegotiation of the various boundaries of cyberspace, ensuring a continued contestation over technology and politics in the country for the foreseeable future. The paper begins with a contextualization of the country case study and an in-depth description of the key components of the country’s developing digital domain. It then illustrates how the country’s government markets its digital capabilities and regulations to external actors, expressing alignment with established norms and a propensity for responsible state behavior in cyberspace. Last, the paper highlights the political ramifications of Bahrain’s commercial initiatives involving cyberspace and offers recommendations for the government to strengthen adherence to norms and encourage responsible behavior. Contextualizing Bahrain’s Digital Domain Bahrain is a small country with big digital growth ambitions. The total population is approximately 1.7 million people, and expatriates comprise a slight majority of total residents.1 Youth constitute approximately 35% of the population. The country exhibits high internet and mobile penetration rates: As of January, internet penetration in Bahrain stood at 99%, the number of mobile connections equated to 131% of the total population, and there were about 1.4 million social media users.2 Enabling this connectivity is a Bahraini telecommunications sector that is described as “robust and progressive,” but only contributes around 4% to the country’s gross domestic product.3 Total investments in the sector exceeded $2 billion between 2009 and 2019,4 while the country’s GDP in 2019 reached $37.9 billion.5 In October, Bahrain’s leading telecommunications operator announced that 5G coverage was available to 95% of the country’s population.6 Bahrain presides over less wealth than many of its Gulf regional counterparts, given smaller proven hydrocarbon reserves. The gross national income per capita in Qatar and the UAE reached $94,840 and $68,780 respectively in 2018, whereas Bahrain’s was $44,720.7 Nevertheless, Bahrain’s oil and gas exports comprise between 75% and 85% of all public sector revenue.8 Understanding the need to diversify away from hydrocarbon revenue, the government is pursuing various initiatives to promote growth in non-oil sectors. 1 Total population figures taken from the Population Division of the United Nations;Bahrain: Population Estimates by Nationality,” Gulf Labor Markets, Migration, and Population Programme, accessed August 25, 2020. 2 Simon Kemp, “Digital 2020: Bahrain,” DATAREPORTAL, February 17, 2020. 3 “Bahrain - Telecoms, Mobile and Broadband - Statistics and Analyses,” Research and Markets, October 2020. 4 “Bahrain Invests $2 Billion in 10 Years in Telecommunications,” News of Bahrain, December 3, 2020. 5 “Bahrain,” The World Bank, accessed December 1, 2020. 6 “Batelco Announces Successful 5G Network Activation in Bahrain,” TradeArabia, October 3, 2020. 7 “Qatar: Country Profile,” World Bank World Development Indicators database, accessed September 10, 2020. 8 International Monetary Fund, Economic Diversification in Oil-Exporting Arab Countries (Manama: IMF, April 2016);