Bahrain Political Unrest Escalates

Despite the Japan crisis grabbing most headlines, unrest in Bahrain continues to escalate. A three month state of emergency has been declared in this strategic island nation.

Bahrain king has made it clear that the nation's military forces are authorized to take all measures to stamp out the protests, according to the article. Although the country is rules by Sunnis, the country is predominantly composed of Shiite's who seek pro-democracy reforms.

Unsurprisingly, a travel advisory from the Department of Foreign Affairs has been issued warning people (Filipinos particularly) to postpone non-essential travel to Bahrain as the political turmoil shows no signs of ceasing anytime soon. Likewise, the U.S. State Department urged Americans to defer travel/leave immediately due to the unrest.

There have been violent clashes between protestors and armed forces alike; a Saudi soldier was shot and killed by an opposition protestor. Despite U.S. urging to succumb to demands to quell the violence and tension, however, there are currently no signs of relent on either side.

From an economic standpoint, concern regarding Bahraini sovereign debt has escalated. Credit default swaps on the nation's sovereign debt has increased 24 basis points to a high unseen in almost two years. Perhaps this is indicative of the general instability of the country's leaders or predictions that the uprising will have detrimental fiscal effects for Bahrain.