GCC: Rocky the road to economic integration


MAY 25th, 1981 marks the date on which the Gulf Cooperation Council (GCC) was established, and this year, the anniversary of that date coincided with a continuing unrest across the region that has persisted since 2011. Thirty-seven years of cooperation has not passed without incident and there have been many challenges to the accomplishment of numerous joint ventures. However, this article focuses only on the economic aspect of the GCC’s difficult journey; in particular how it has contributed to the achievement of advanced economic integration between GCC member states, and how it directly benefits GCC nationals.

Economic integration between GCC member states has gone through many stages, the first of which lasted from 1983 to 2002. In 1983, the GCC member states established a Free Trade Area, which came into effect with the signing of a unified economic agreement. The agreement eliminated all tariffs on goods and services between the GCC member states. Establishment of the GCC Customs Union in early 2003 marked the end of the first stage (the Free Trade Area stage) in which the volume of trade between GCC member states trebled, from $5 billion in 1983 to $15 billion in 2002.

The second stage extended from the establishment of the GCC Customs Union in 2003 up to the establishment of the GCC Common Market in 2008. The GCC Customs Union allowed custom-free transportation of national products and other commodities between GCC member states. In January 2008, the GCC Common Market was declared. This is an important tributary to economic integration between GCC member states as it is the pathway towards economic citizenship, which gives GCC nationals many advantages in terms of movement, residence, ownership, education, work and trade.

Within a year of the GCC Common Market being declared, around twenty-six million GCC nationals enjoyed free movement between GCC states. Twenty-six thousand GCC nationals work in other member states, both in the public and private sectors and they are accorded equal treatment to nationals of the member state in which they are employed. Moreover, nearly eighty-three thousand GCC nationals have obtained commercial licenses to engage in economic, investment, and service activities. In addition, about 198 thousand citizens of the GCC member states enjoy the right to own property in other member states. Twenty-seven thousand GCC nationals currently enjoy social insurance coverage and pensions in the member states in which they worked. Furthermore, there are no restrictions on the movement of capital between GCC member states making financial, investment, and commercial transactions smooth and easy, and national banks of GCC member states are allowed to have branches in all other member states. Currently, there are about 25 GCC national banks that have their branches in other member states. On the question of stock ownership and formation of corporations, some 430 thousand GCC nationals own shares in 665 joint-stock companies in other member states with a capital of $259 billion. Finally, concerning education, health and social services, nearly forty-three thousand male and female students GCC attended public schools and 135 thousand GCC nationals benefited from government health services in other member states in a year.

Thus, true advantages for GCC nationals have been achieved as a result of the relentless and continuous work of the GCC committees in order to bear the fruits of the GCC joint action. We are talking about forty-six ministerial committees, 350 working committees, and seven hundred meetings a year, i.e. two meetings a day, with the participation of thirteen thousand GCC officials from various sectors.

In short, the 25th of May is an unforgettable date in the minds of GCC nationals, and the epic journey undertaken by the GCC is a memorable part of the region’s history despite all its challenges and obstacles.

— Dr. Ibrahim Al-Othaimin is a Middle East affairs specialist and security analyst based in Riyadh. He can be contacted at Ibrahim.othaimin@gmail.com. Follow him on Twitter @Alothaimin