Saudi, UAE, may have indirectly announced the end of the GCC as we know it
The United Arab Emirates and Saudi Arabia have formed a new military and trade partnership separate from the Gulf Cooperation Council (GCC), back in December 2017, following a failed GCC summit.
On June 6, 2018, the UAE and Saudi declared a joint vision for economic, developmental and military integration through 44 joint strategic projects, according to UAE national news agency WAM.
This was not in coordination of the GCC, nor does the agreement mention the bloc in any of its bulletined points.
THE GCC Decline
The Cooperation Council for the Arab States of the Gulf known as the Gulf Cooperation Council is a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf, except for Iraq. Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
The Charter of the Gulf Cooperation Council was signed on 25 May 1981, formally establishing the institution.[The Gulf Cooperation Council (GCC) region witnessed another year of disappointing economic performance in 2017 but growth should improve in 2018 and 2019, according to the World Bank.
The region eked out growth of just 0.5% in 2017 – the weakest since 2009 and down from 2.5% the previous year. The GCC region’s economies experienced flat or declining growth as lower oil production and tighter fiscal policy took a toll on activity in the non-oil sector.
In 2017, the GCC’s total GDP reached $3.46 trn.
Timeline and size of projects
“A total of 350 government officials from different fields prepared “The Strategy of Resolve” within 12 months. The Strategy outlines three main axes: the economic axis, the human and knowledge axis, and the political, security and military axis,” said WAM.The leaders of the two countries have set a timeframe of 5 years to implement the strategic projects.
During the meeting, a number of joint projects were announced, including a unified strategy for food security, a unified plan for medical stocks, a common supply security system and joint investment in oil, gas and petrochemicals.
“The Strategy of Resolve also includes a plan to establish an agricultural investment company with a capital of $1.36 billion, a joint venture fund for renewable energy and a third investment fund for small and medium enterprises,” WAM reported.
The economies of Saudi and the UAE represent a GDP of $1trn dollars, with combined exports ranking fourth globally and amount to $750 bn, plus $40.9bn annually invested in infrastructure projects, which generates huge opportunities for bilateral cooperation.
The volume of non-oil trade between the two countries is worth $24 billion, while imports totaled nearly $550 billion.
Joint economic projects
The economic axis outlines a number of joint projects between the two countries, including:
– Launching the policy of empowering the banking sectors.
– Exchange of experiences in the field of modern financial technology.
– Sharing experiences in the insurance sector.
– Sharing experiences in infrastructure management.
– Sharing experiences in the field of safety and road maintenance.
– Establishment of a joint investment fund to invest in SMEssmall and medium-sized enterprises of the emerging industrial sectors in partnership with the private sector.
– Joint cooperation in the field of taxation.
– Facilitate the exercise of economic activities and exchange of investment opportunities through the establishment of a dedicated office to facilitate the economic activities, and the establishment of a unified electronic portal linking the two countries.
– Establishment of the Saudi-Emirati Investment Fund for Renewable Energy to attract large and start-up companies and support them in funding research and development projects.
– Implementation of the Gulf electrical interconnection system, in order to benefit from the productive capacity of energy to both countries.
– Exchange of experiences in the nuclear energy sector.
– The launch of a common vision and identity of tourism and national heritage of the two countries, in order to attract more tourists to the region and to develop programs to optimize the potential of tourism and heritage of both countries.
– Launching the innovative housing solutions program to reduce/ eliminate restrictions (legislative, financing and procedural) that slow down the development of housing services and reduce the challenges facing the sector.
– International joint investment in the oil, gas and petrochemical sector.
– Cooperate in applications to convert carbon dioxide into petroleum products.
– Cooperation in the research and development of various applications related to the oil, gas and petrochemical sector.