GCC: United we stand?

The GCC states have demonstrated greater unity in response to the Arab Spring, but potential trouble may lie ahead. Published in Emerging Markets, 23 September 2011

When a convoy of army vehicles drove across the King Fahd causeway from Saudi Arabia to Bahrain on March 14 to help quell pro-democracy protests, it seemed the six countries of the Gulf Cooperation Council (GCC) had found a new sense of purpose.

The GCC was created in 1981; the joint military force, known as the Peninsular Shield, followed three years later, and this was the first time it had ever been deployed in this way. But for all the cooperation such a move called for, it does not necessarily herald a more unified future for the bloc. The experiences of this year, which have tested the resolve of the region’s autocrats more than ever before, have shown that the GCC states are willing to coordinate their activity – but only when it suits them.

Indeed it wasn’t long before a familiar source of disagreement emerged between Bahrain and its near neighbour Qatar.

In early August, Al Jazeera’s English language station aired a documentary, Shouting in the dark, which cast a deeply unflattering light on the brutal repression used by Bahrain to tackle the pro-democracy demonstrators. Reacting via his official Twitter account, Khalid Al Khalifa, Bahrain’s foreign minister, said, “It’s clear that in Qatar there are those who don’t want anything good for Bahrain. And this film on Al Jazeera English is the best example of this inexplicable hostility.”

Analysts in the region were not surprised by the episode. Al Jazeera has often been a thorn in the side of Middle East regimes more used to uncritical coverage by compliant media, although it is notable that the documentary was not run on the broadcaster’s Arabic language service.

“The initial period after the entry of forces into Bahrain saw a circling of the wagons, with Saudi Arabia leading the way,” says David Roberts, deputy director of the Qatar office of the Royal United Services Institute, a defence think-tank. “It was never going to last. The GCC is a famously fractious club, and things like the spat between Bahrain and Qatar over Al Jazeera come up every now and again, so it is to some degree just reverting to the norm.”

NO BLANKET APPROACH

In general, though, the GCC states have been willing to act with greater unity than normal this year, particularly when the problems have been close to home. The military aid for the ruling Al Khalifa family in Bahrain was backed up by a $10 billion, 10-year aid package from the GCC states. The same financial boost was given to Oman which, like Bahrain, has relatively meagre oil reserves and is generally seen as more vulnerable than most to an uprising.

But the GCC states have not always shown the same consistency when dealing with the other revolutions and uprisings which have convulsed the Arab world this year.

In Yemen, for example, the GCC has been the most important outside actor in trying to bring about a peaceful resolution there. As was the case with Bahrain, Saudi Arabia has taken the lead. Riyadh’s leverage has been helped by the fact that it has been hosting President Ali Abdullah Salah since he fled his country in June for medical treatment, following an assassination attempt which left him badly injured. However, Qatar withdrew from the GCC effort to resolve the crisis in May, blaming the continual delays in finalizing an agreement.

Differences have also emerged in the case of Syria and how best to deal with President Bashar al Assad, who is viewed with suspicion in GCC capitals because of his close links to Iran.

On August 6 the GCC secretariat issued a statement calling for an “immediate cessation of violence and... an end to the bloodshed”. Then, in what appeared to be a carefully coordinated series of actions, Saudi Arabia’s King Abdullah Bin Abdulaziz Al Saud gave a speech on August 8 in which he said: “What is happening in Syria is unacceptable... The future of Syria is between only two options: either it chooses wisdom willingly, or drifts into the depths of chaos and loss.”

King Abdullah then announced that he was withdrawing his ambassador from Damascus, a move quickly followed by Bahrain and Kuwait. But it was just as notable that Qatar, the UAE and Oman did not withdraw their envoys.

The countries can generally find common cause in their attitudes towards Iran. The Sunni elites of the GCC states are, on the whole, deeply suspicious of the Shia leaders of Iran – both in terms of their territorial ambitions and the perceived risk of divided loyalties among their own Shia populations.

But again, there is no blanket approach. While Saudi Arabia, Bahrain and the UAE take a very hard line and at times appear to see the hand of Iran in every suspicious event, Qatar has a more moderate approach.

“There is potentially trouble down the road,” says Roberts. “When it comes to Iran, Saudi Arabia and the Emirates have an extremely strong, conservative, harsh line. This rejects Qatar’s way of getting on with Iran, which is a lot more laissez faire. If this more assertive Saudi Arabia line continues then it seems it’s a matter of time before there’s a spat with Qatar.”

ECONOMIC ALIGNMENTS

Further afield in North Africa, the tone has been more varied still. There was little love lost between any of the Gulf states and Libyan leader Muammar Gaddafi, but Qatar has been particularly forthright in its support of the rebels, sending fighter jets to help enforce the no-fly zone and helping the National Transitional Council (NTC) with oil sales. The UAE has also contributed some jets, while Kuwait has donated money to the NTC. Bahrain, however, only recognized the NTC as the legitimate authority in Libya on August 23.

Despite the variety of approaches, one thing which all this shows is that all the GCC states are now, tosome extent or other, more willing to take a stronger role on the regional stage. And in cases where they can agree, they are likely to do this in a coordinated fashion.

“In terms of foreign policy they certainly have common interests,” says Eckart Woertz, visiting fellow at Princeton University and a former director of economic studies at the Gulf Research Council. “The original idea of the GCC was as a foreign policy cooperation body, and it developed more impact in the economic field. Now, with this upheaval, this idea has been reinvigorated. Definitely we’ll see a more cohesive and coordinated approach in this area.”

Future cooperation may also take the form of a closer alignment of their economic policies. The financial muscle of the oil-rich GCC states means they are well placed to invest heavily in North Africa and the Levant, which have seen the worst of the turmoil – something which could play a critical role in ensuring economic, and by extension, political, stability there in the future.

“These events over the past year are going to be very beneficial for regional economic integration,” says Nasser Saidi, chief economist of the Dubai International Financial Centre Authority. “Out of what is happening in the Arab Spring – or the Arab Firestorm as I prefer to call it – we’ll see greater economic cooperation at a regional level.

“It is not in the GCC’s interests to have instability in other countries in the region. They have every incentive to make sure that the transition is as short and smooth as possible, to whatever the new political outcome is that results.”

Arguably it is in areas such as economic and trade relations where the GCC has been most successful. It has created a customs union and is developing a regional electricity grid allowing countries to trade excess power – something which has reduced the incidences of blackouts during the summer months when demand is at its highest.

A regional rail network is also moving forward, albeit at different paces in the different countries. And GCC citizens can travel, live and work freely in the other member countries. Such achievements have helped to create a nascent sense of GCC citizenship around the Gulf.

“If you want to develop genuine popular support for economic integration, you need to produce concrete results that bring tangible benefits to the citizens and businesses,” says Jarmo Kotilaine, chief economist at National Commercial Bank in Riyadh. “The awareness of this in the GCC has grown, and this is why the customs union and these grids and transportation networks are being taken more seriously.”

SINGLE CURRENCY ON HOLD

However, the biggest economic project the GCC has planned is, for now, on hold: a single currency was meant to be in place in 2010, but the project has suffered a series of setbacks. Oman pulled out of the scheme in 2006. That was followed by the withdrawal of the UAE in 2009 after Saudi Arabia won the right to host the GCC central bank that would take charge of the currency.

Since then, the remaining Gulf countries have been keeping a careful eye on the turmoil in European economies, which has put the future of the euro currency in some doubt. As a result, there is little appetite at the moment to push ahead with their own version.

“The issue of the single currency is out of the window for now,” says Ibrahim Saif, resident scholar at the Carnegie Middle East Centre in Beirut. “The GCC was considering steps towards a currency union, but I think this will be forestalled for now. They are watching closely what is happening in Europe and how the behaviour of one country is affecting the performance of the other countries.”

GCC-wide free-trade deals with other countries or blocs have also failed to make much progress in recent years, despite the potential benefits on offer. A long-discussed deal with the EU has repeatedly foundered over Europe’s human rights concerns. In other cases, the GCC has simply appeared to lack much commitment to the process.

In one US diplomatic cable released by the whistle blowing website Wikileaks, US diplomats in Riyadh reported the frustration of their Australian and New Zealand counterparts when it came to negotiating a free trade deal with the GCC. “They don’t talk to each other between rounds of meetings,” the cable cited one negotiator as saying. “They just return to their capitals until the next round.”

What all of this highlights is that, for all the many interests they may share, the GCC remains a fairly loose association of countries, with little inclination to act together unless there is a pressing need to do so.

Bahrain was one such case, when there was the danger that a regime might ultimately be forced from power unless action was taken. The willingness of the GCC states to support each other in such circumstances may be as much to do with the fact that they are all absolutist monarchies as the fact that they are close neighbours.

This impression was reinforced by the surprise announcement in May that the GCC was to open negotiations with Jordan and Morocco to join the group. There is little the two countries have in common with the Gulf states other than their systems of government, particularly Morocco, which lies some 3,500km to the west. But creating the perception of unity among the monarchs is seen as particularly relevant when it comes to foreign relations.

“Saudi Arabia is taking the leading role in the GCC, but they don’t want to appear as such and they are not acting alone,” says Saif. “On the contrary, they are trying to take collective action because they want to maintain unity within the GCC countries. It is easy to break this unity and then they will be somehow weaker. Making compromises within the GCC and having unity sends the right signals to Turkey, Iran and other regional rivals.”

Beyond this foreign policy sphere, it seems unlikely that the unrest this year will do much to draw the countries any closer together, but there is no inclination to disband the coalition either.

“It’s not particularly broken, but it’s not doing particularly brilliantly either,” says Roberts. “Personal politics and gripes and domestic issues will probably trump any of the changes of the past few months, whether for greater integration or less. These events won’t knock the ship off course.”