The GCC Looks Beyond the Gulf

The Gulf Cooperation Council (GCC) has attracted considerable attention of late, both due to expectations regarding its regional role during the wave of unrest in the Middle East but also thanks to renewed efforts to drive forward landmark regional integration projects.

The most concrete commitment in this regard is the recent decision to belatedly complete the regional customs union by 2015. The project was originally initiated in 2003 but has been held back by technical issues and disagreements on the distribution of customs duties. The movement of goods within the block currently involves multiple customs duty payments instead of the intended 5 per cent. Its completion would naturally boost the regional single market and enhance the bargaining power of the Gulf region in international trade negotiations.

Also the regional turmoil, while fueling criticism of the GCC as overly passive, has forced policy-makers to rise to the occasion in important and potentially path-breaking ways. $20bn has been committed to support Bahrain and Oman, an important initiative in view of the fact that an economic block can only attain true cohesion if it has mechanisms in place for addressing its weak points.

A friend in need is a friend indeed and now is a time when intra-regional assistance can be used to relieve stress points, foster continuity, and minimise the disruptions caused by temporary factors. The GCC is also working to address the political stalemate in Yemen, the only country in the immediate neighbourhood which is not currently a member. However, Yemen’s stability and prosperity are clearly essentially for ensuring the stability and security of the broader peninsula. In that sense, efforts to bring Yemen into the GCC by 2016 are welcome.

The GCC has now also captured headlines due to its possible expansion beyond the current group of six countries. The likeliest candidate is Jordan but also Morocco – somewhat to its seeming bewilderment – has received an invitation. In Jordan’s case this move would cap years of effort to establish closer ties with the Hashemite Kingdom’s more prosperous southern neighbours. Such integration clearly has the potential to give a major impetus to Jordan’s economic development while opening up the GCC to new qualified human capital resources. Jordan also stands to benefit from access to the GCC’s financial and energy resources. In spite of the differences in the structure and level of development of the economy, a Jordan-GCC has the makings of a win-win situation for both sides if it is properly managed.

The inclusion of Jordan can provide a positive model for broader economic collaboration in the Middle East, echoing the success of the EU enlargement in Europe. The GCC has a special role to play in this regard in as much as Jordan’s interest in the block highlights the lack of concrete progress towards economic integration in the Middle East outside of the GCC.

As legitimate as the widespread criticism of delayed projects and grandiose pronouncements that take years to turn into action are, the GCC is without a doubt the greatest – arguably the only – success story of economic and political integration in the Arab World. It represents the best currently existing mechanism for seeking political consensus and economic and regulatory harmonisation in the Middle East. Even with its shortcomings, it has produced results for the GCC and – let us not forget – even the European integration story built momentum over decades. So why not apply a successful recipe into new challenges, especially in the absence of obvious alternatives?

Criticism of the latest enlargement plans has focused above all on the risks they pose for deepening integration among the existing members. Is there a risk that geographic expansion beyond the core countries will result in delays to furthering current integration projects as energy is diverted to absorbing new members? Of course there is. But does enlargement have to happen at the expense of deeper ties among the existing members? Not necessarily. The old adage about too many chefs spoiling the broth does hold considerable truth. The European Union has shown how serious and persistent the challenges of bringing together countries with different traditions, cultures, and languages can be. Even the troubles of the Euro-zone are to a large extent due to a lack of proper integration, of ambition failing to match the reality.

But the historic challenges and opportunities foisted upon us are not always of our own choosing. The integration drive, as important as it is, cannot ensure true prosperity and security if it is carried out in isolation of other priorities. Europe rose to the historic occasional of bringing its relatively impoverished ex-communist eastern members into the fold. By doing so, it likely prevented the possibility of political radicalisation in these countries by giving them West European prosperity and stability as concrete, attainable goal to aspire to. It also created the prospect of significant economic gains through gradual integration even before full membership. New opportunities for trade, investment, and jobs went hand in hand with regulatory, policy, and institutional harmonisation. Within two decades, Eastern Europe became a lot like the West, not to mention one of the brightest economic success stories on the continent.

Also the Middle East needs positive role models and mechanisms for producing concrete economic gains for regional economies and citizens. The GCC deserves praise and support for its preparedness to apply its own model of economic success to other regional economies. After all, no one else is rushing – or really in a position – to do this.

But the GCC leadership will then have to redouble its efforts to make sure that the regional integration agenda also remains on track. For that, ultimately, is the true source of the eagerly awaited economic gains. This may well necessitate the emergence of a ‘dual-track Arabia,’ just as it has of different speeds of integration in Europe. A solid core of converging economies can drive harmonisation and integration sustainably while creating concrete goals for others to aspire to. For all its numerous challenges – which realistically even include the break-up of the Euro-zone – the history of European integration is a story of vision and inspiration, turned into higher standards of living and a greater sense of cultural togetherness for millions of people. The same thing is possible in the Middle East. As great as the challenges will be, this drive is likely also a necessary precondition for this part of the world truly pulling its weight in the emerging global economic order.

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