GCC Regional Report: The Power Of One

THE POWER OF ONE

 

By Gordon Platt

 

Thirty-one years have passed since the six Arab oil-producing countries of the Gulf formed an economic and strategic alliance, following the outbreak of the Iran-Iraq war.

 

Known as the Gulf Cooperation Council, or GCC, the group has had some notable successes. Its foreign exchange reserves have grown to $2.3 trillion, rivaling those of China. The GCC is a major market for the US, not only in terms of military sales but also for services and technology.

 

King Abdullah of Saudi Arabia believes the time has come, however, for the GCC (which also includes the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain) to form a more perfect union. He envisions a confederation of states, along the lines of the European Union. A union would make the GCC an even more powerful economic bloc than it already is, with a combined gross domestic product exceeding $1.4 trillion and a single market of 43 million consumers, including 15 million expatriates.

 

Earlier efforts at tightening the ties that bind the GCC have failed. A monetary union was proposed for 2010, but the effort was stymied by a dispute between Riyadh and Abu Dhabi over which would host the central bank. The GCC established a customs union in 2003 and a common market in 2008, yet there are innumerable border obstacles for truckers.

 

Aimed at countering the spreading influence of Iran in the region, as well as potential contagion from the Arab Spring uprising, the latest attempt at GCC unity has also stumbled. Fearing domination by Riyadh and loss of sovereignty, GCC leaders at their summit in May postponed the issue to allow further study by a commission.

 

Regardless of how the matter is decided, the GCC remains an important and influential force, regionally and globally. Intra-GCC trade now tops $100 billion a year and is expanding at a 20% rate. GCC secretary general Abdullateef al-Zayani says all six members will sign a common defense policy when they meet in Manama, Bahrain in December.

 

Meanwhile, the GCC countries­­–individually and collectively–are attempting to create more jobs for their citizens and to adjust to a changing world. Increasingly, they are looking to the East for economic partners. The energy-rich states of the Gulf remain vulnerable to shifts in the price of oil, but they are shaping their future with their own hands and minds.

 

Gordon Platt

Contributing Writer

GPlatt@GFMag.com

 

alt GCC regional report:
 

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