GCC Accelerates Pace of

Progress Toward Unity

            Among the many regional and international organizations that exist in the world today, the Gulf Cooperation Council (GCC) stands out as a grouping of countries that beyond sharing economic and political goals boasts a unique commonality of heritage, religion, values, language, traditions, customs and aspirations.

            The GCC brings together six nations — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — bordering the Arabian Gulf. Although these countries have always enjoyed exceptionally close cooperation, the creation of the bloc nearly 20 years ago unified them more than ever, allowing for more comprehensive economic, commercial, social, political and security ties.

 

            The latest Summit of the Gulf Cooperation Council (GCC) was held in Riyadh in November, 1999

            The GCC’s roots go back to a historic meeting on February 4, 1981, when the foreign ministers of the six nations met in Riyadh and agreed to set up a council, form a secretariat general and hold periodic meetings at both ministerial and summit levels. In Abu Dhabi, on May 26 of that year, the six heads of states signed the charter that gave birth to the regional entity with headquarters in Riyadh. This act represented the leaders’ realization of their common destiny and unity of purpose, and gave expression to their belief that their peoples are better served through further coordination, cooperation and integration in all fields.

            The Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz, then Crown Prince, stated after the founding of the GCC: “As Arab Gulf countries, we have taken the steps which truly reflect what we want, which is the promotion of coordination, integration and cohesion among us to deepen and promote relations in all fields…. We are of the opinion that what we have planned for is conducive to the enhancement of the actual unity that has always existed among the Arab Gulf states and to making it a reality for the well-being of our peoples and for the benefit of all Arab countries.”

The Custodian of the Two Holy Mosques King Fahd bin Abdul Aziz with the President of the United Arab Emirates Shaikh Zayed Bin Sultan Al-Nahyan (left).

            From the outset, the goal behind the creation of the GCC has been to see its member countries develop more diversified economies within the framework of a common market in which new industries can be located in the economically most feasible country, with private citizens as well as governments of the member states free to participate in their ownership. Toward that end, the GCC Charter calls for steps to create a cohesive body in all fields; facilitation of greater contacts among the citizens of these countries; the establishment of parallel regulations in all areas, including in the economic, financial, commercial, customs, transportation, educational, cultural, social, health, media, tourism, legislative and administrative fields; the introduction of steps to promote progress in industry, agriculture and mining; the establishment of think tanks and educational institutions; and, most significant of all, the promotion of the private sector.

            The leaders of the GCC moved rapidly to achieve these ambitious goals. During the council’s second meeting on June 8, 1981, member states signed the Unified Economic Agreement, which set the basic guidelines for their economic integration. It established the framework for a common market where national products can be traded duty-free with a unified external tariff and joint action to promote GCC exports. For commerce, it led to a resolution permitting all GCC citizens to engage in wholesale or retail business in any member state, and, by 1993, GCC citizens were enjoying the same private sector privileges anywhere in the bloc.

            The guidelines on finance encouraged coordination of internal and external investment policies, as well as devising unified monetary regulations and increasing coordination between financial institutions and central banks. Eventually, it is hoped, a unified currency will be created. In 1982, the Khaleej (Gulf) Corporation for Investment was set up in Kuwait with a capital of 22 billion U.S. dollars to serve as a resource for the development of financial and economic projects in the GCC states. By 1987, national banks were able to open branches in other member countries and a network was created for monetary exchanges.

            In the area of human resources, the agreement aimed at offering GCC citizens free movement among the member states, and the ability to work, reside, invest and own property in all six countries. By 1988, all Gulf citizens were able to use health facilities in any of the member states. In 1995, the council passed a resolution facilitating the employment and transfer of GCC nationals among the member states.

            The guidelines on communication and transportation aimed to unify telephone charges and promote transportation links among member states. In 1986 the King Fahd Causeway linking Saudi Arabia with the island of Bahrain became operational, and the impact of the free flow of citizens was tremendous in allowing people to get to  know  each  other  and  in  turn  deepen  their  “Gulf identity.” Another causeway linking Bahrain and Qatar is currently being considered.

            On education, the GCC has taken steps to unify school curricula, especially in the area of math and science, highlighting the shared heritage among their peoples. Today, students at any level can transfer and have their credits accepted anywhere in the six nations.

Riyadh, with the King Abdul Aziz Historic Center in the foreground, is the capital of the Kingdom of Saudi Arabia.

            The Unified Economic Agreement stressed that GCC countries should coordinate their infrastructure projects to be able to have a joint developed economy and to integrate economic activities. During the Kuwait summit in 1997, the first stage of linking the national power networks in the six nations into a GCC-wide grid was taken when Bahrain, Saudi Arabia and Qatar agreed to connect their electricity systems. Coordination in this field includes rationalization of use, unification of power and water specifications, maintenance, training and the exchange of information. In November 1999, the council endorsed the contract for setting up the GCC power grid, its basic statute and the announcement of the formation of the public stock company with headquarters in Dammam, Saudi Arabia. In addition, steps are being taken to link up the six national water networks. A Committee for Rationalization of Water and Power Use was set up, and, at its meeting in Muscat, Oman, this year, discussed a joint working paper on electricity and water tariffs, public awareness, and methods for rationalization of usage.          

            The GCC’s monetary links are also being strengthened. At their meeting in Abha, Saudi Arabia, on June 28, 2000, the heads of monetary agencies and central banks of the member states discussed such things as coordination of exchange rate policies, with all GCC currencies pegged to the U.S. dollar, unified payment systems, and the ATM network. Similarly, telecommunications officials met in June and agreed to link their Internet systems directly with the Internet hub of the United Arab Emirates (UAE). Kuwait and Qatar have already set up this link. At the same meeting, they agreed to unify telephone services and remove roaming charges for cell phone calls within the GCC region.

Abu Dhabi (above) and Dubai along the Arabian Gulf are the two largest urban, commercial and financial centers in the United Arab Emirates.

            Similar achievements can be recorded in many other areas. Due to their geographic proximity and comparable level of development, GCC countries share similar environmental problems and conditions. As a result, in 1985, the GCC countries adopted a strategic framework for environmental work at the local and regional levels. There are now unified regulations to protect and develop wildlife, manage waste and conserve water resources.

            In 1998, as part of the council’s continuing efforts to unify steps toward development among GCC countries and its effort to address the dynamic international economic environment that affects its members, the six countries approved a number of comprehensive strategies to serve as a guideline for their countries.

            In another step to facilitate the realization of its goals, on December 22, 1997, the Supreme Council approved the creation of a Consultative Assembly. The purpose of this assembly is to intensify communication among the member states, to broaden the basis of consultation, and to benefit from qualified citizens of the GCC and give them the opportunity to share their views and concerns. It consists of 30 individuals, five from each member state, with a rotating presidency. The main responsibility of the assembly is to study the issues that are presented to it by the Supreme Council.

Sultan Qaboos Bin Said of Oman (right) and Bahrain's Shaikh Hamad Bin Isa Bin Salman Al-Khalifah.

            In addition to the economic and social fields, the six nations of the GCC have had uncommon unanimity of views and cohesion of action in all other areas, including in the political, security and energy spheres.

            In matters of foreign affairs, the GCC has adopted a clear policy based on the principles of neutrality, respect for international law, non-interference in the domestic affairs of others, and promotion of global peace and justice. An ardent supporter of the League of Arab States, the Organization of the Islamic Conference and the United Nations, the GCC has worked tirelessly to resolve many issues of concern to the region and the world.

            The organization spearheaded the international coalition in 1990-91 to confront Iraqi aggression and liberate Kuwait. It was then at the forefront of the global effort urging Iraq to comply with UN Security Council resolutions pertaining to its aggression against Kuwait, while emphasizing Iraq’s territorial integrity.

Visitors enjoy the Qurum Park in the heart of Muscat, the capital of Oman

            The GCC has repeatedly deplored the phenomenon of terrorism, calling for international cooperation to uproot it. Meeting regularly, the foreign ministers of the GCC have worked to bring about a negotiated settlement of the Arab-Israeli dispute on the basis of UN Security Council resolutions. The organization has also actively supported regional and international efforts to resolve crises in many areas of the world, including in the Balkans and the Horn of Africa.

            Regarding defense, the GCC Charter states that any attack or threat directed to a member of the GCC is considered a threat to all of its members. Thus the GCC is committed to developing a strategy that would best secure and deepen the military cooperation among their countries. The basis of the GCC military cooperation is the development of defensive capabilities of individual states within a joint effort that aims to unify regulations and training, and develop the Jazeerah Shield defensive force. In its meeting in Riyadh in November 1981, the Council agreed to create a joint air defense system and convene regular meetings of GCC defense ministers to supervise further defense cooperation. Joint military exercises continue to take place to further coordinate the defense capabilities. At the Kuwait summit of 1997, the GCC issued a declaration to establish a secure communications network for military purposes, including radar coverage and early warning systems.

Manama, the capital of Bahrain, is one of the Arabian Gulf's major financial centers.

            Cooperation among the GCC member states in the field of security began in December 1981 when GCC interior ministers agreed to cooperate more closely in areas of internal security. Over the years, the GCC states have signed numerous accords, including the Security Agreement reached in November 1994, for joint action on such aspects as narcotics and terrorism.  The organization has also begun work on a program to issue identification cards for all GCC citizens to facilitate travel within the six countries.

            Possessing 45 percent of the world’s oil and 14 percent of its gas reserves, the GCC countries have been at the forefront of international efforts to ensure a stable supply of oil at prices that are beneficial to both producers and consumers. For example, during the price fluctuations of the past two years, the GCC oil ministers met regularly to coordinate the oil policies of the member states and help stabilize prices.

Kuwait's Shaikh Jaber Bin Salem Al-Sabah (right) and Qatar's Shaikh Hamad Bin Khalifah Al-Thani

            Even while achieving success in a wide range of fields, the GCC leaders have been looking to further prepare their grouping for the opportunities and challenges of the 21st century.

            During the 20th summit meeting held in Riyadh in November 1999, the Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz urged member states to continue to exert their utmost efforts toward forging economic unity and striving for an effective joint military force. He stated that “considerable progress has been made toward the establishment of a common Gulf market, especially in the last two years. The rapidity of economic change, however, does not allow us to move at the same old leisurely pace.” He added: “From the two basic pillars of military power and economic unity, backed by full political coordination and joint efforts, we can forge ahead and deal with others without fear and can accomplish for our people the security and prosperity they deserve.”

Kuwait City is the capital of the State of Kuwait

            Deliberation among the GCC leaders resulted in the issuance of the Riyadh Declaration, which  called for acceleration of efforts to achieve economic unity among GCC states and a more active economic policy at the regional and global levels. The statement noted that the trend of globalization necessitates the emergence of strong economic entities that are able to deal with it effectively.

            During that summit meeting, the GCC leaders took a crucial step toward creating a common market by agreeing to have a unified customs tariff system by March 2005. As a result of this agreement, the member states will launch the first customs union in the Middle East.  In addition, the GCC will have a firmer foundation for future economic and commercial ties with the major trading partners of the member countries.         

            This agreement, and its implications, is without precedent in the modern history of the Arab world.  Like nothing before it, the GCC’s unified tariff accord gives concrete meaning and reality to the concept that the six-state grouping is really one market instead of six individual ones. As such, it makes the nations a more attractive economic entity for foreign companies and also makes it much easier for investors from the GCC to do business both within the six-nation bloc and throughout the world.

            The unified customs accord will enhance the GCC’s leverage in negotiating a free trade agreement with other economic blocs, such as the European Union (EU), with which GCC members want duty-free access for their petrochemical and aluminum products.

As do all the capital cities of the GCC member states except Riyadh, Qatar's Capital Doha sits on the coast.

            The products that the GCC economic bloc can offer are not confined to crude oil and natural gas, new reserves of which continue to be found. Industries in the six  states also include petrochemicals, electronics, and foodstuffs. In addition, the industry of tourism has a bright future, since the region is  full of scenic beauty and historical significance.

            Boasting a long list of accomplishments since its establishment, the GCC is entering the 21st century with a stronger determination than ever to unify the economies of the member states at a more rapid pace and to play a more decisive role in the global economy as a means of securing prosperity for all of the citizens of the six member states.

 


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