The Martian polar atmosphere is known to have a persistent local minimum in potential vorticity (PV) near the winter pole, with a region of high PV encircling it. This finding is surprising, since an isolated band of PV is barotropically unstable, a result going back to Rayleigh. Here the stability of a Mars-like annular vortex is investigated using numerical integrations of the rotating shallow-water equations. The mode of instability and its growth rate is shown to depend upon the latitude and width of the annulus. By introducing thermal relaxation toward an annular equilibrium profile with a time scale similar to that of the instability, a persistent annular vortex with similar characteristics as that observed in the Martian atmosphere can be simulated. This time scale, typically 0.5-2 sols, is similar to radiative relaxation time scales for Mars's polar atmosphere. The persistence of an annular vortex is also shown to be robust to topographic forcing, as long as it is below a certain amplitude. It is therefore proposed that the persistence of this barotropically unstable annular vortex is permitted owing to the combination of short radiative relaxation time scales and relatively weak topographic forcing in the Martian polar atmosphere.