Evaluation of the Gulf Cooperation Council
Shannon Sibel
4/21/15
INR 5012-01
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Regional organizations are intergovernmental organizations created through
regionalism. They are often formed as a result of shared identities and ideologies, a
shared sense of threats, and economic interdependence (Karns & Mingst, 2010, p. 145152). The three main schools of thought in international relations (realism, liberalism,
and constructivism) each view the roles of IGOs and regional organizations in
international politics differently. Realism is based on the assumption that individuals act
rationally to protect their own interests. States are primary actors and they coexist in an
anarchic international system. For realists, international law and government are, for the
most part, weak and ineffective. International organizations are tools for states to use
when it suits them and they are no more than the sum of their member states.
International organizations have no independent effect on state behavior and will not
change the system itself (Karns & Mingst, 2010, p. 45-50).
Liberalism is based on the ideas that human nature is basically good and human
behavior can be changed and perfected through collective action and institutional
reform. Liberals also believe that cooperation between actors is possible and will grow
over time. They see international organizations as playing positive roles in facilitating
cooperation (Karns & Mingst, 2010, p. 35-45). Constructivism is concerned with the
identities and interests of actors and how these can change. Constructivists believe that
behavior is shaped by these identities and interests. They place a lot of importance on
institutions. In regards to international organizations, constructivists believe that they
have great power and that they “construct the social world in which cooperation and
choice take place” (Karns & Mingst, 2010, p. 50-51). International organizations have
independent effects on international relations and have been important in the processes
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of changing understandings and behaviors with various international problems (Karns &
Mingst, 2010, p.52).
The Gulf Cooperation Council is a political and economic alliance located in the
Persian Gulf. It was established in 1981 (“GCC: History”, 2015). The organization was
created as a reaction to various economic and security threats occurring in the region at
the time. These threats include the Iranian Revolution and the Iran-Iraq War (“Profile:
Gulf Co-operation Council”, 2012). With an absence of a comparable organization, the
GCC was created as a practical solution to these economic and security concerns in the
region (Anthony, 1986, p. 41-42).
The original members of the GCC include the United Arab Emirates, Bahrain,
Saudi Arabia, Oman, Qatar, and Kuwait. 1 These countries share similar political
systems and a common cultural outlook (“Profile: Gulf Co-operation Council, 2012).
Membership of the GCC has not changed but there have been talks about admitting
Yemen as a member. There are plans to have Yemen join by 2016 but there are some
challenges to its inclusion, including objections from Kuwait and Yemen’s economic and
security problems (Sharp, 2014).
The original objectives of the Gulf Cooperation Council are laid out in the
organization’s charter. Some of their objectives are very broad, including “achieving
cooperation among the member states” and “strengthening the links of cooperation
among the peoples of the member states in different fields” (Nakhleh, 1986, p. 8). Other
objectives are more specific, such as cooperation and establishing similar systems in
fields including economics, trade, and commerce; education and culture; and social
1
For a map of the GCC countries, see Appendix.
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welfare and health. Stimulating scientific and technological progress is the final
objective listed in the GCC charter. Security is not listed as one of the objectives in the
GCC charter. However, it has been a major focus of the organization since its creation
(Nakhleh, 1986, p. 8).
The structure of the GCC has remained the same since the organization’s
creation. It consists of the Supreme Council, the Commission for Settlement of
Disputes, the Ministerial Council, and the Secretariat General. The Supreme Council
consists of the heads of state and is responsible for determining major political and
economic decisions. It is the only body of the organization that can hand down binding
decisions. Two-thirds of the member states must be present to vote on resolutions.
Unanimous decisions are required for approval on substantive matters. A majority vote
is required for all procedural issues (Peterson, 1988, p. 107-110).
The Commission for Settlement Dispute is attached to the Supreme Council and
its function is to provide recommendations to the Supreme Council in cases of
disagreement or disputes between member states (Peterson, 1988, p. 109). The
function of the Ministerial Council is to develop and propose to the Supreme Council
various means to promote further cooperation between member countries. The voting
procedures of the Ministerial Council are the same as the Supreme Council (Peterson,
1988, p. 109). The Secretariat General carries out the day-to-day functions of the
organization (Nakhleh, 1986, p. 11).
The Gulf Cooperation Council has had most of its success when dealing with
economic and security issues but it has had little success in achieving its other
objectives. This can be explained by the realists’ perspective that international
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organizations are tools for the member states to use for their benefit when it suits them.
The states clearly view economic and security issues as their main concerns and it is
evident in the policy making if the GCC. This paper will show this by focusing on specific
programs and initiatives related to each objective and determining the success of each
program, as well as showing the variety of programs related to each objective. The
success of the programs will be determined by whether or not they achieved what they
were set up to achieve. Although security is not an official objective listed in the GCC
charter, it will be considered an objective of the organization for the purposes of this
paper because it has been a major focus of the organization since its creation.
Economics
Economic issues are a major concern for the GCC countries. One of the
organization’s first courses of action after its creation was the signing of the Unified
Economic Agreement by each of the member states (“GCC: History”, 2015). Economic
issues that the Gulf Cooperation Council has dealt with include its reliance on oil, the
GCC common market, the GCC monetary union, the adoption of a single currency, and
the GCC customs union.
Role of Oil in GCC Member States
The oil reserves of the GCC member countries account for 43 percent of the
world’s oil reserves (Story, 1988, p. 112). The economies of the GCC are very
dependent on their oil revenues, as they are the single most important source of income
and foreign exchange for these countries (Ramazani, 1988, p. 96). Early on in the
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GCC’s existence, the leadership of the organization recognized the need to reduce their
countries’ reliance on oil. However, policies were still created to expand GCC activities
in international oil operations. This can been seen in a resolution, passed during the
organization’s first summit meeting, that calls for “joint cooperation for the establishment
of an integrated oil industry including exploration, refining, marketing, industrialization,
pricing, transport, utilization of gas and development of energy sources” (Anthony,
1986, p. 392).
Development of non-oil industries began in 1982 with the creation of the Gulf
Investment Corporation. The early plans for the GIC were to invest in petrochemical,
industrial, and livestock projects (Ramazani, 1988, p. 100). By 1986, there were five
main projects underway, most of which were related to aluminum. It was believed that
the GIC could be an effective vehicle for economic diversification in the GCC (Peterson,
1988, p. 152). However, this has not been the case. Although the GIC has been making
profits and the economies of the Gulf Cooperation Council member states have been
growing rapidly, there is still a reliance on oil exports. The productivity of the
organization overall fell between the years 2000 and 2007 when the oil and gas sector
is excluded. When comparing the smaller diversified economies with the more resource
dependent ones, the diversified economies performed better in the selected years
(Sarieddine, 2008).
The GCC member states have been fairly successful in integrating their oil
industries but overall they have failed to expand their economies beyond the oil
industry. This lack of diversification will hurt these countries in the long run because of
falling oil prices and the finite amount of oil reserves available (Gally, 2015).
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GCC Common Market
The Gulf Cooperation Council has been trying to create a common market since
the creation of the organization. Shortly after the creation of the GCC, a free-trade area
was established between the member states. Since the goods of the member countries
are essentially competitive and not complementary, this was more of a symbolic
achievement than a functional achievement. Although it was not very advantageous
immediately, the free-trade area was seen as something that could be advantageous in
the futures once the member countries diversified their economies (Ramazani, 1988, p.
102).
The GCC common market was finally created in 2008. The goal of the GCC
common market is to “remove all barriers to cross country investments and services
trade by granting national treatment to all GCC firms and citizens in any other GCC
country” (“GCC: History, 2015). Along with equal economic opportunities, such as
setting up companies, and buying and selling properties, the common market also
permits equal rights of citizens in all six countries in areas such as education,
healthcare, and employment (Bowman, 2008).
Although the GCC common market was created in 2008, the implementation is
not yet complete. This is due to competing national interests and a lack of bureaucratic
capacity. This has lead to a delay in enactments of “various national statutes necessary
to allow the truly uninhibited movement of goods, services, capital, and labor (Takagi,
2012, p. 17). Even with this delay in necessary enactments, there has still been an
increase in inter-GCC trade activities that can, at least in part, be attributed to the
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implementation of the GCC common market. With a properly functioning common
market, the results could be even better (Ali, 2014).
GCC Monetary Union and Single Currency
Following the implementation of the GCC common market in 2008, the
organization set a goal to create a monetary union and a common currency by 2010
(Bowman, 2008). The deadline that the GCC had set for the creation of a monetary
union was originally 2005 and the original deadline for a common currency was 2010
(“Gulf States Push for Single Currency”, 2002). The change in the deadline is largely
attributed to the delay in implementing the customs union, which is believed to be
necessary to have in order to create the monetary union (Dash, 2015). The Monetary
Union Agreement was finally signed in June 2009 along with the Basic Statute of the
Monetary Council. The Monetary Council was intended to be a precursor to a GCC
central bank. The agreement “calls for the development of the requisite financial
infrastructure, including payment and settlement systems, statistical systems, and the
adoption of uniform banking regulation and supervisory rules” (Takagi, 2012, p. 13). The
role of the Monetary Council is to prepare this infrastructure, develop rules and policies,
and recommend legislation for the establishment of a central bank and the introduction
of bank notes and coins (Takagi, 2012, p. 13).
The creation of a unified currency has been a goal of the Gulf Cooperation
Council since the signing of the Unified Economic Agreement in 1982. By creating a
common currency, the GCC member states will no longer have to worry about bilateral
exchange rates. This will increase the efficiency of GCC economies and broaden their
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degree of economic integration (Jadresic, 2002, p. 6). A common currency has not yet
been created but the idea has not been abandoned. In 2007 the GCC member
countries agreed on five convergence criteria. These criteria include limits on inflation,
limits on interest rates, the amount of foreign reserves needed, limits on public debtGDP ratio, and limits to the public budget deficit-GDP ratio (Takagi, 2012, p. 12-13).
One of the challenges to the creation of a monetary union and a common
currency is the issue of sovereignty. Each country will have to give up the possibility of
unilaterally changing the value of the currency they use (Jadresic, 2002, p. 11). The
likelihood of a common currency being adopted has been lowering as more members
pull out of negotiations (Wigglesworth, 2009). Oman opted out of the union in 2006.
Then the United Arab Emirates dropped the plans to join the union in response to the
GCC’s decision to locate the Monetary Council in Saudi Arabia (Khan, 2014). The
common market was supposed to pave the way for a monetary union but, as mentioned
earlier, there have been delays in the implementation of the GCC common market
(Takagi, 2012, p. 12).
GCC Customs Union
As stated earlier, the GCC created a free trade area between the member states
shortly after the establishment of the organization (Ramazani, 1988, p. 102). A customs
union was created in 2003 but very little progress had been made up until recently
(“Profile: Gulf Co-operation Council”, 2012). This was due mainly to differences on the
distribution in tax revenue and barriers facing local exporters at border customs points
in the region (“GCC: History”, 2012). The purpose of the customs union is to create a
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territory where customs duties and regulations restricting trade among member states is
abolished. Uniform customs duties and regulations for trade with non-member states
are also implemented. Customs are inspected and customs duties are paid at the first
point of entry to the union (Gulf Cooperation Council, 2003). Tariff and non-tariff barriers
to trade between member states are eliminated. Goods produced in any member state
are given the same treatment as national products (GCC, 2001).
Up until 2015 there was only a partial implementation of the customs union.
During this time, trade between GCC member states increased significantly. However,
intra-GCC trade has only grown to about 10 percent of GDP during partial
implementation. This is very small compared to intra-EU trade accounting for 60 percent
of the EU’s GDP and intra-Asean trade accounting for 25 percent during the same time
period (Al Asoomi, 2014).
The GCC customs union became fully operational in January 2015. Intra-GCC
trade is expected to continue to increase (GCC Customs Union Fully Operational,
2015). The customs union will facilitate the smooth movement of goods and
investments, which can contribute to commodity diversification. This makes the customs
union essential to the GCC’s efforts to diversify sources of income and reduce their
dependence on oil revenues. It will inevitably lead to accelerated growth in non-oil
sectors in the GCC economies (Al Asoomi, 2014).
Security
Although collective security of the region is not an official objective listed in the
Gulf Cooperation Council’s charter, security is a major concern for the organization. The
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GCC was established in a time with great regional security threats and was created as a
reaction to these threats. These threats include the Iran-Iraq War, the Iranian
Revolution, the Soviet invasion of Afghanistan, and the Arab-Israeli Conflict (Peterson,
1988, p. 179). The GCC has taken steps to ensure the security of the Persian Gulf
region. These steps include the Internal Security Agreement, the Comprehensive
Security Strategy, the Peninsula Shield Force and Joint Defense Agreement, and the
Unified Military Command.
Internal Security Agreement
The Internal Security Agreement consists of legal articles that deal with matters
of security cooperation among the GCC member states (GCC, 2012). The Security
Agreement was first proposed in 1982. Because of Kuwaiti objections to the language of
the treaty, the GCC failed to ratify the agreement (Gold, 1986, p. 392). The agreement
was amended in 1994 but Kuwait was still opposed to various amendments. The latest
amended version was introduced in 2012. This was finally the version that was
approved by the GCC leaders (Kechichian, 2014).
The initial Security Agreement and the subsequent amended versions were
responses to security concerns in the region. These concerns include the seizure of the
Grand Mosque in Mecca in 1980, a failed coup attempt in Bahrain in 1981, the Iran-Iraq
War, and the invasion of Kuwait in 1991 (Kechichian, 2014). The articles of the Security
Agreement prior to the 2012 version require member states to “cooperate with each
other to hunt down those who are outside law or the system, or who are wanted by
states, whatever their nationality, and to take necessary action against them.” (al-Saadi,
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2014). It also allows for states to take legal action against citizens of any of the member
states in regards to crime. It also requires states to share personal information of
citizens with other member states. It allows security forces to enter into the territory of
another member state during pursuits of wanted individuals and requires the immediate
extradition of wanted individuals. It was language like this that the leaders of Kuwait
objected to because it goes against their constitution (al-Saadi, 2014). The leaders of
Kuwait finally approved the 2012 version because it did not include language that
contradicted the Kuwaiti constitution. However, even with the removal of this language,
there were still members of the Kuwaiti parliament who believed that the agreement
threatened the sovereignty of the state (Kechichian, 2014).
Comprehensive Security Strategy
The GCC Comprehensive Security Strategy was adopted in 1987. The strategy
is a general framework for security cooperation among member states (GCC, 2012). It
consists of cooperation in multiple aspects of defense and security (Christman & Moore,
2015, p. 5). It outlines the general objectives as well as the tools of implementation of
the strategy (GCC, 2012). The strategy focuses on illicit trafficking, immigration, airport
security, drug fighting, weapons, border guards, and civil defense (Christman & Moore,
2015, p. 5). Because this agreement also had language in regards to extraditions and
hot pursuits that contradict Kuwait’s constitution, there was an initial difficulty in the
ratification of this document, just as there was a difficulty with the Internal Security
Agreement. However, the Comprehensive Security Strategy was much more quickly
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amended than the Internal Security Agreement and was approved in much less time
(Peterson, 1988, p. 208).
Peninsula Shield Force and the Unified Military Command
In 1984, the GCC created a collective security force called the Peninsula Shield
Force (“Profile: The Gulf Co-operation Council”, 2012). It currently consists of a Saudi
brigade and a composite brigade made up of about 10,000 personnel contributed by
other GCC member states. Its mission is not defined publicly but it has been deployed
in times of threat to territorial integrity of GCC member states and it has the authority to
intervene in cases of internal unrest (Saidy, 2014, p. 18). The Peninsula Shield Force is
a defensive military force, as implied by its name. Defense of the GCC is considered a
collective effort and an attack on one member is considered an attack on all (Nakhleh,
1986, p. 54).
The Peninsula Shield Force has faced two major challenges in its existence. The
first was the invasion of Kuwait by Iraqi forces in 1990. The force failed and was
inadequate against any serious Iraqi aggression. The GCC acknowledged the
inadequacy of the force and the need to establish new mechanisms for ensuring the
security of its member states. Oman recommended an expansion of the Peninsula
Shield Force but the proposal failed due to problems of cost sharing and command and
control (Saidy, 2014, p. 18-19).
The second major challenge that the Peninsula Shield Force has faced was the
popular uprising in Bahrain during the Arab Spring in 2011. The force provided limited
assistance to the Bahrain Defense Force in securing key infrastructures in the state. Its
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goal was to guarantee the regime’s survival and its monarchical character. The
Peninsula Shield Force was not engaged in direct confrontation with Bahraini civilians.
This deployment was more of a symbolic achievement in the field of defense integration
than a major one (Saidy, 2014, p. 19).
The Peninsula Shield Force is not a true army. There have been discussions of
establishing a GCC army. However, there is no consensus on the issue. This is due to
the priority given by each state to the development of its own army (Saidy, 2014, p. 19).
In 2013 a unified military command was established for the GCC countries. It is a joint
military force used for quick intervention to address security threats (Mustafa, 2013).
Joint Defense Agreement
The GCC Joint Defense Agreement was ratified in 2000. It sets out several
pillars, principles, and priorities of military cooperation (GCC, 2012). It created a
framework for collective defense based on the idea that any attack on one state would
be an attack on them all. It mandates that all six states must provide military assistance
to help each other. The agreement also established a Joint Defense Council and a
Military Committee to supervise cooperation and promote collaboration in joint military
exercises (Saidy, 2014, p. 20).
Education and Culture
Much of the GCC’s actions in regards to education and culture are just plans to
improve education. The GCC has five specific education objectives: providing a
minimum level of education for all; nurturing intellectual independence and developing
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creative abilities; strengthening values and productive tendencies; linking secondary
and university education to development requirements and the labor market; and
developing scientific research and establishing a technological base (Nakhleh, 1986, p.
73). The GCC adopted the Joint Plan for the Improvement of Public Curricula in 2000
(GCC, 2012). The Economic Agreement adopted in 2001 sets out some standards for
the member states in regards to education. It states that member states must adopt the
required programs necessary to completely eradicate illiteracy and they must adopt a
timetable for the implementation of compulsory primary education (GCC, 2001, p. 10).
Social Welfare and Health
There has not been a large focus on social welfare and health issues in the Gulf
Cooperation Council. Citizens of one GCC member state are given the same treatment
as a national in regards to public hospitals and health centers (GCC, 2012). One of the
newest programs initiated in regards to social welfare and health is the Food Safety
Committee. It is a permanent committee composed of representatives of the food
control bodies of each member state. The committee ensures the safety and quality of
all consumer foodstuffs. It also ensures that all imported foodstuffs meet the safety and
quality requirements of the GCC standards (GCC, 2012).
Science and Technology
As with education and health, most of the Gulf Cooperation Council’s actions in
regards to science and technology are just mandating that the member states adopt
policies that foster growth in scientific research and technological development. There
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are not a lot of policies that lay out concrete actions that the states can take to achieve
these goals. The Economic Agreement adopted in 2001 mandates that member states
adopt policies that support joint scientific and technological research. It states that
members must increase their funding for scientific and technological research and they
must encourage and provide incentives to the private sector to contribute to the funding
of specialized scientific and technical research (GCC, 2001, p. 11).
Conclusion
The Gulf Cooperation Council has had most of its success when dealing with
economic and security issues. The organization has not had much success in regards
to its other objectives simply because it has not focused on them. The GCC has not
taken much action to achieve its other objectives. This behavior can be best explained
by the realist perspective. The sole decision making body of the GCC consists of the
heads of state of the six member states. These leaders lead governments where the
power is concentrated in the hands of the heads of state. Because of this, the Supreme
Council is not accountable to anyone. The six heads of state will make decisions based
on their best interests, which will be to protect the stability of their regimes and ensure
that they are receiving some kind of economic benefit. This can be best exemplified by
their failure to break their reliance on oil. The leaders recognize the need to diversify
their economies but they have not done much to achieve it.
Even though most of the GCC’s success is in issues related to economics and
security, not all of their economic and security policies have been successful. One
possible explanation for this is the lack of economic leaders in the decision-making
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councils. It is also possible that the GCC’s programs have not been in place long
enough to succeed. The GCC has very lofty economic goals. They are trying to
establish a monetary union and a single currency. The European Union, a similar
organization that is about twice as old as the GCC, did not implement a common
currency until just before the GCC planned to implement one. The success of the GCC
is also impeded by the unanimous voting rule in the Supreme Council. Even though
there are only six member states, it is still difficult to get every state to agree on things.
The best example of this is the Internal Security Agreement that was repeatedly put to a
vote for two decades before Kuwait finally agreed to it.
Overall, the Gulf Cooperation Council has been fairly unsuccessful. The
organization’s success has only been with certain specific programs and policies. It has
yet to achieve any of its objectives. However, this does not mean that the GCC will
never be successful. It is still a young organization and may need some more time to
develop policies that will help it achieve its objectives.
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Appendix
Map of Gulf Cooperation Council
SOSUAE
[cartographer].
(2012).
http://www.sosuae.com/map.php?sid=2
GCC
[map].
Retrieved
from