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While I never normally agree with Max Mosley, he hit the nail on the head with this one.
Having a race in Turkey or China or some other place with human rights abuses may raise problems, but at least the race happens entirely separately of those abuses. They have loads of other international events, they are not organised directly by the same people carrying out the abuses.
Whereas the F1 is Bahrain's only international event, and they tried to silence the protests precisely in order that it could take place. Moreover, the race is the ideal symbol of 'no problems here, everything's calm'. In no other country could it serve this propaganda function to the same extent. This means that the race is itself a political football instrumentalised by the regime, and as such, F1 shouldn't touch it.