Profile: What is the GCC?

#GCC

The Gulf Cooperation Council is a political and economic alliance of six Gulf states

The GCC headquarters in Riyadh
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Thursday 12 February 2015 8:15 UTC
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The Gulf Cooperation Council (GCC) is a regional political organisation comprising the energy rich Gulf monarchies – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

When and why was it founded?

Since its establishment in Abu Dhabi in 1981, the GCC has promised to achieve ever closer union between the energy rich Gulf countries.

Western analysts originally attributed its foundation to security concerns, which have always plagued the Gulf monarchies, but the founding charter focused more on issues of social and cultural cohesion, environmental and scientific coordination and economic cooperation.

Demographics

The GCC countries tend to have young and relatively fast-growing populations, although the circumstances differ from member to member. All states rely on large expatriate communities that have swelled in recent decades as the GCC economies have grown, an influx that is causing internal tensions in some GCC states.

The majority of expats are low level workers but significant minorities of white collar workers also exist, with the ratio differing from country to country. 



Where are we now?

Once thought of as a stale but stable regional organisation, in recent months the GCC has become the main forum for a feud between the dominant member Saudi Arabia and its small but wealthy neighbour, Qatar.

In March, Saudi Arabia, the United Arab Emirates and Bahrain made the shock decision to withdraw their ambassadors from Qatar, accusing Doha of meddling in the internal affairs of other GCC countries, a reference widely interpreted as a reference to Qatar’s backing of the Muslim Brotherhood, which Saudi Arabia classifies as a terrorist organisation.

Oman chose to stay neutral while Kuwait has attempted to mediate, but the incident is the most open and likely the biggest ever GCC rift. Previously most disputes have been resolved behind closed doors.

In spite of the rise in tensions, Saudi Arabia is pushing ahead with its 2011 plan to form a GCC confederation, although this project is seeing resistance most recently from Kuwait.

Security and Intervention

The internal cohesion of the GCC has been coming under pressure for some time. Rifts occurred back in 2011, when Saudi Arabia and the United Arab Emirates sent troops to suppress protests in Bahrain. Kuwait, Oman and Qatar refused to intervene.  

Since 1984, the GCC has operated a loose joint security strategy, epitomised in the Peninsula Shield Force, a small joint fighting force stationed in Saudi, on the Kuwait border. The force did not intervene in the 1991 Iraqi invasion of Kuwait, although reinforcements were sent to protect Kuwait against any fallout from the 2003 US-led Iraq invasion. Today the force has about 40,000 troops, of which around 10 percent were deployed to Bahrain in 2011.

Following decades of exceedingly close security ties with the US, in recent years the GCC has been striving to shore up its own defences, resulting in a massive jump in arms spending, which is projected to rise by 20 percent to $83bn by next year.

External Influence and expansion

As the collection of the Arab World’s wealthiest states, the GCC has always tried to influence the region and take a lead in forums like the Arab League. Since the Arab Spring, however, clear moves have been made to expand the GCC net.

In 2011, Morocco and Jordan applied to join the GCC. The proposed union would have seen the GCC transformed more from a regional organisation to one based on joint value systems of autocratic monarchies. For now, a full on union is on the backburner, although ample GCC money continues to flow to support infrastructure projects and security spending in these states.

Yemen has also long lobbied to join the GCC, but the only time the grouping seemed to seriously consider allowing in its poorer, parliamentary neighbour was in 2011 when it tried to broker a peace deal and power transition in the country.

Economics

The GCC’s vast energy reserves and subsequent wealth have always been a key bargaining chip with the outside world, and the grouping regularly uses these to co-opt varying internal pressure groups. 

Over the last decade, however, a rapid depletion of oil and gas reserves and big rises in populations for many GCC countries has seen the latter attempt to diversify away from energy into sectors such as tourism, construction and finance. These efforts have only been partially successful and certain GCC members were hit hard by the 2008 financial crisis.

There have been various attempts to further align the GCC economies, with a customs union being implemented in 2003 and a common market coming into force in 2008 aimed at encouraging cross-boundary investment.

In 2009 Saudi Arabia, Kuwait and Qatar went a step further and announced the formation of a Monetary Council, designed to be a precursor for a common GCC currency although little progress has since been made.

Despite the heel dragging, GCC countries do tend to stick together on economic matters and the wealthier states have proven very willing to bail out their poorer GCC neighbours. Saudi and UAE cash is for now propping up Bahrain and to a lesser extent Oman, while internally Abu Dhabi is the wealthiest emirate and has provided a series of cash injections to its poorer peers like Dubai.