Seminar| The Evolving Role of the GCC in the Middle East and North Africa

On June 11, 2015, OxGAPS hosted a seminar delivered by Dr. Ashraf Mishrif (Senior Lecturer in Political Economy, King’s College London) on “The Evolving Role of the Gulf Cooperation Council in the Middle East and North Africa.” The seminar was chaired by Dr. Dennis Sammut who introduced the topic by asserting that the GCC states today are active players, involved in many initiatives particularly in the Arab world. This is in sharp contrast to the previous generation when other countries were seeking to influence the GCC region.

Dr. Mishrif started the talk by pointing out that what is of interest in the Gulf is the fact that it has managed to establish itself as a strategic region. Moreover, the six member states of the GCC have moved beyond their dependence on European powers and in the past few years have tried to position themselves as an active organization that can develop its own security strategy.

Dr. Mishrif discussed three aspects of the GCC: economic dimensions; political coherence; and its security capabilities as summarized below.

Economic dimensions

On economics, the strength of the GCC began in the 1970s with the oil crisis. With the accumulated wealth, countries started to look for ways to invest in capital surplus. Each individual country started to develop its own development strategy. Kuwait was a pioneer, and as early as 1964 started to develop its sovereign wealth fund. It looked to the international market for its investing—mostly in the US and Europe. During the early 1980s, GCC countries started to realize that increased oil production and oil export has made other countries interested in the region. In order to protect their interests, they needed to formulate a regional body to act collectively in the international system. At first it was an economic initiative but with eruption of the Iranian revolution the initiative also incorporated a political and security dimension—that was the birth of the GCC.

A free trade area helped the GCC eliminate barriers to trade, and the customs union was an even more serious effort. By 2008, the common market introduced was set to pave the way for a monetary union and single currency. However this step proved highly ambitious as only two countries were ready to meet the criteria. Moreover, they did not agree on fundamental principles to integration which led to the postponement of the initiative. Differences included where the headquarters will be based and compliance over the budget deficit. The differences ultimately lead to the question of political will on behalf of the rulers.

Despite this, the GCC managed to play a greater role in the past few years. As a result of the financial crisis, GCC countries acquired a great number of shares from failing companies. The opportunity was well seized, influencing the flow of capital from west to east. The Middle East also benefitted from this, such as with Tunis and Egypt where large investments were being made by gulf countries.

Although the GCC states have established themselves as financiers and donors in the region, the have failed to create an economic structure to sustain their growth as an organization.

Political coherence

On the political front, there has been a sustained degree of political coherence as an organization. This was in part due to flexibility, as the organization is not supranational and each country can voice its difference, allowing them to more effectively coordinate crises. This was clear when supporting Iraq during the Iran-Iraq war in the 1980s, and is also clear in modern times with a common stance against ISIS and the Houthis in Yemen—even when they lobby at the UN, they do so as a collective body.

Security capabilities

On the security front, the GCC is militarily very vulnerable and weak, located in between two large powers. They are also vulnerable internally due to historical territorial disputes. There are also important threats based on sunni-shia and tribal divisions.

While internal security threats are easier to deal with, supported by an effective security apparatus, the external threat is much more difficult. The GCC perceives Iran as an existential threat, especially after more recent warnings over the closure of the Strait of Hormuz—a lifeline to some countries when it comes to connecting with the international market. From a security perspective, they don’t have the manpower to deal with an Iranian army almost twice the size of all the GCC in terms of soldiers on the ground.

In the past few months, the example of Operation Decisive Storm is proof of growing GCC capability to act through military means with tangible results. They managed to do this without the US, while other western powers were not invited to take part of the effort.

This shows that the Saudis are keen to establish themselves as a more active regional power which is evident in in Yemen. The UAE also had an active role in Libya and its disputes, supporting a no fly zone. The recent Camp David conference was also a clear indication that the GCC is starting to shift away from their US ally due to vast differences and did not agree to formulate a coherent strategy.

Dr. Mishrif concluded by stating that whether they will be able to rely on themselves or not, what is interesting is that the role of the GCC in the Middle East is changing and will continue to grow and strengthen in light of growing economic and military powers such as Saudi Arabia and the UAE.  The GCC as an organization is having difficulties but learning to be more pragmatic.

The case of Egypt

Dr. Mishrif also turned to the case of GCC-Egyptian relations. When it comes to Egypt, the GCC has a pragmatic approach and Egypt has a pragmatic approach to the GCC. When you look at how Egypt looks at the GCC, it is a huge labor market. With about 9 million Egyptians working abroad, two-thirds are in the GCC. This for Egypt is a very important market which brings around $18 billion dollar to the Egyptian economy on an annual basis—a major economic interest. Furthermore, most Egyptian exports go to the GCC and Libya. In light of the collapse of Libya, their export interests to the GCC have become even more important. Hence a substantial amount of financial resources for Egypt are dependent on the stability of the GCC market.

For the GCC, there is also a preference to import from Egypt as the quality of Egyptian products are viable to the GCC markets, which they value. Furthermore, Egypt is very important as it is more willing than any other country in the Arab world to support the GCC in times of crisis—such as in the case of Kuwait during the Gulf War. Therefore in conclusion, the dependency between Egypt and the GCC is mutual.