Missed Opportunities and Failed Integration in the GCC

The crisis that erupted on June 5, 2017, when three members of the Gulf Cooperation Council (GCC) turned on a fourth—for the second time in three years—has highlighted the limitation of integrative institutionalization in the 36-year-old GCC. At every stage in the Qatar standoff, the GCC as an institution has been absent from policy debate and formulation. It has not been used as an avenue for voicing initial grievances by Saudi Arabia, Bahrain, and the United Arab Emirates (UAE) against Qatar, or as a mechanism for conveying the conditions the three states (plus Egypt) wished to form the basis for negotiation, or as a venue for the subsequent—failed— attempts to mediate an end to the crisis. While the GCC summit took place in Kuwait in December 2017, against the expectations of many, the two-day event broke up in acrimony and was overshadowed by the announcement of a wide-ranging cooperative partnership between Saudi Arabia and the UAE. As the center of gravity in Gulf politics refocuses on a hawkish security-centric and regionally interventionist axis running between Riyadh and Abu Dhabi, the GCC will struggle to regain its relevance and repair the damage done to ties of trust and confidence by the crisis.

This paper begins by outlining the factors that undermined attempts to create and strengthen integrative mechanisms in the GCC since its formation in 1981. These include the power imbalance between Saudi Arabia and the five smaller GCC states, the tension between personalization and institutionalization in decision-making structures in individual Gulf capitals, and the lack of consensus on “big ticket” foreign and security affairs or willingness to pool sovereignty where necessary. The second section examines specific examples of missed opportunities in integration that meant that, in practice, the GCC functioned best as a loose collection of relatively like-minded states.To the degree that a shared interest existed, it was based on a limited set of common threat perceptions—but even those broke down after 2011 amid the sharp divergence in regional approaches toward the Arab Spring and its aftermath. The final section of the paper analyzes the implications of the blockade of Qatar for the future of the GCC and the realignment of policy-making around far more assertive leaderships in Saudi Arabia and the United Arab Emirates.

GCC Genesis and Inherent Conditions

The GCC came together in a matter of months in early 1981 after several years of inconclusive talks and competing visions of what form a regional organization should take. Foreign ministers of all eight Gulf states (the six future GCC states plus Iraq and Iran) first met in Jeddah in July 1975 to discuss a Saudi proposal for a collective security agreement in the Gulf, and a further meeting of the eight countries took place in Muscat in November 1976 where regional security arrangements were again discussed. Both meetings broke up without agreement and served more to highlight the lack of consensus among the eight littoral states when it came to sensitive issues of defense, security, and foreign policy.1 Even after the Iranian revolution of 1978-79 and the Iraqi invasion of Iran in 1980 removed Iraq and Iran from consideration in the proposed regional arrangement, differences among the six Arab Gulf states remained. When representatives of the six states met in Kuwait in February 1981, they had before them three very different proposals from Kuwait, Oman, and Saudi Arabia that emphasized, respectively, economic integration, military cooperation, and collective security.2

A little more than three months after the initial meeting in Kuwait on February 4, 1981, the GCC was formally launched at a summit in Abu Dhabi on May 25. The speed with which the new organization was drawn up—along with the compromises between the three competing visions of coordination—meant that key issues of institutional design were left unaddressed. The GCC was neither a political nor a military alliance; it lacked an integrative decision-making institution, akin to the European Commission, or any treaty-based foreign policy-making power. The six member states have been reluctant to grant supranational powers to the General Secretariat based in Riyadh, and the requirement for unanimity—rather than majority voting—on substantive matters at the Supreme Council (of heads of state) and the Ministerial Council (foreign ministers) has meant that individual countries and their rulers, in practice, have had veto power over policies they did not approve.3

Two further impediments to the accrual and consolidation of authority at the regionwide GCC-level were the imbalance in size and power between Saudi Arabia and its five smaller neighbors and the nature of decision-making in all six of the monarchies that made up the GCC. At various times in the twentieth century, Saudi leaders exhibited expansionist designs in the Arabian Peninsula: against Kuwait in the 1920s, Qatar in the 1930s, and Oman and Abu Dhabi in the 1950s.4 Although the majority of border and trans-boundary disputes were resolved prior to the formation of the GCC, they had left a legacy of residual wariness in other Gulf capitals over expressions of Saudi power and influence within the organization. In 2009, Saudi officials placed restrictions on Emirati citizens entering the kingdom whose UAE identification cards featured a map that included territory designated as Emirati, although it was contentious territory claimed by both sides.5 Several months later, in March 2010, a short yet sharp naval clash was reported to have occurred as the UAE Navy opened fire on a Saudi patrol vessel and forced its surrender after it strayed into disputed waters.6

The personalization of policy-making in each Gulf capital has also militated against the institutionalization of authority within the GCC. Decision-making responsibility is concentrated among small circles of senior members of the ruling families in each GCC state, especially in the sensitive “sovereign ministry” fields of internal affairs, defense and security, and foreign policy.7 To varying degrees, the reluctance of ruling establishments to delegate power across domestic political structures also makes it unlikely they would agree to pool sovereignty with each other. Broader influence on policy-making is often informal, takes place “outside of the procedural framework of government,” and builds on preexisting mechanisms that seek consensus through consultation.8

The impact of greatly personal decisions on GCC developments has become manifest on several high-profile occasions. One came in 1995 when the Qatari delegation withdrew from the final session of the annual GCC Summit and began a partial boycott of GCC meetings to protest the appointment of a Saudi diplomat, Jamil al-Hejailan, as the new GCC secretary-general.9 This came at a delicate moment in Saudi-Qatari relations as Saudi Arabia was widely believed to be behind an attempt to restore ousted Emir Khalifa bin Hamad Al Thani to leadership in Qatar. Both the UAE and Bahrain responded to Qatar’s walkout from the GCC Summit by welcoming Khalifa bin Hamad on a regional tour, during which he met with UAE President Sheikh Zayed bin Sultan Al Nahyan and was provocatively escorted by Bahrain’s Crown Prince Hamad bin Isa Al Khalifa in a Bahraini naval vessel within sight of the Qatari coastline.10

In May 2009, years of preparation for a GCC currency and monetary union collapsed when the UAE withdrew suddenly and without warning from the project less than a year before it was due to launch in 2010. Emirati officials had campaigned vigorously to host the GCC Central Bank in Abu Dhabi and reacted with visceral anger to the decision to locate the bank in Riyadh instead.11 Four years later, in December 2013, expectations that the GCC summit in Kuwait would hold discussions of Saudibacked proposals for a deeper Gulf union in response to the Arab Spring uprisings were punctured comprehensively when Oman’s Minister of State Responsible for Foreign Affairs, Yusuf bin Alawi, chose the annual Manama Dialogue in Bahrain to state publicly that, “We are against a union. We will not prevent a union, but if it happens we will not be part of it.”12

Importantly, the GCC suffers from an inability to reach consensus on “big ticket” issues, especially if they relate to defense, security, or foreign policy. The late King Abdullah of Saudi Arabia surprised fellow Gulf rulers in May 2011 when he called for Morocco and Jordan to apply for associate GCC membership, as the matter had not been discussed beforehand.13 When King Abdullah’s suggestion to broaden the GCC failed to gain traction, he proposed to deepen the GCC into more of a full-fledged union at the December 2011 GCC summit in Riyadh. However, a subsequent midyear “consultative summit” in Riyadh, in May 2012, ended without agreement as the most the six states could agree on was to refer the issue of union to a committee for further consideration. The outcome was a blow to the Saudis, who had played up the talk of (and prospects for) union in the runup to the meeting, just as they would do 18 months later before the December 2013 summit in Kuwait.14

Missed Opportunities for Integration

The GCC made the most progress in technocratic and more apolitical areas. An array of technical committees has worked painstakingly and outside the public gaze to standardize regulations in economic and industrial sectors across the six member states. These committees, grouped under the GCC Standardization Organization, have provided the most tangible and effective example of coordination detailed in the Unified Economic Agreement signed shortly after the GCC was formed. The Unified Economic Agreement envisaged the harmonization of oil and industrial policy across GCC states, the creation of a uniform system of tariffs, and the free flow of labor and capital across a common internal border.15 It incorporated the Gulf Organization for Industrial Consulting (originally established in 197616) and the Gulf Investment Corporation in 1982 to oversee and support collaborative industrial and investment policies.17

Progress toward the goals outlined in the Unified Economic Agreement was slow and halting, as illustrated by the aforementioned failure of the single currency and monetary union. Nevertheless, a customs union was launched in 2003 and was followed five years later by a common market that became operational on January 1, 2008.18 In theory, the common market extended equal rights to citizens of GCC states to take up employment and residence, access education and healthcare, and establish companies and buy or sell shares in each member state. In practice, however, the segmented nature of individual labor markets and comparatively low cross-border trade flows among the six GCC states meant the impact of the common market was less pronounced than might otherwise have been expected. Moreover, GCC finance ministers took more than a decade from the launch of the customs union (in 2003) to reach agreement on the imposition of a common external tariff (in 2014). In November 2016, a Commission of Economic and Developmental Affairs was formed at the GCC Secretariat in Riyadh as a springboard for further integration, but it was overtaken just seven months later by the rupture within the GCC over the standoff with Qatar.19

Several examples, in addition to the currency and monetary union, highlight the missed opportunities that held back attempts to foster greater cooperation, leading to less integration in major policy areas. Although the instances of technocratic cooperation listed above were impressive, they were not immune to geopolitical rivalry or tension among member states. At the GCC Summit in November 1989, Qatar proposed a GCC pipeline to export gas from its soon-to-be-developed North Field to Kuwait, Saudi Arabia, Bahrain, and the UAE. As energy analyst Justin Dargin noted in 2007, Qatari officials “initially thought the GCC pipeline to be a more pragmatic financial venture than the construction of a capital-intensive LNG facility.”20 Bahrain, however, withdrew from the project due to an ongoing territorial dispute (at the time) with Qatar over the Hawar Islands, while Saudi Arabia backed out to protect its own gas initiatives and withdrew a preliminary grant of transit rights that blocked the plan to include Kuwait in the pipeline.21 As a result, when the Dolphin Gas Project became operational in 2008 it consisted only of a subsea pipeline from Ras Laffan in Qatar to Taweelah in Abu Dhabi, with overland onward transmission of gas throughout the UAE and to Oman. Even this limited cooperation was a red flag for the Saudi government, which attempted to halt the construction of the pipeline from Qatar to Abu Dhabi by claiming—as it did with Kuwait—that the pipeline crossed Saudi territory and thus required Saudi consent.22

Friction between Saudi Arabia and the UAE in the mid-2000s contributed also to the failure of another planned GCC energy initiative. In December 2006, the GCC Supreme Council, which comprises leaders of member states, passed a resolution to launch a joint Arab nuclear program that would be implemented by the six GCC states. The secretary-general of the GCC at the time, Abdulrahman bin Hamad Al Attiyah, briefed the director-general of the International Atomic Energy Agency (IAEA), Mohammed El Baradei, on the GCC-led Arab nuclear proposal in early 2007, and the GCC and IAEA agreed to cooperate on a feasibility study for a regional nuclear power and desalination program.23 Just as the idea was gaining traction, however, GCC officials were blindsided in April 2008 when the UAE published its own independent policy plan for nuclear energy, established the Emirates Nuclear Energy Corporation as an Abu Dhabi-based public entity, and invited bids in 2009 for construction of its first nuclear power plant at Ruwais, which is set to begin operation in 2018.24

Other GCC-wide plans have been affected initially by the impact of the post-2014 oil price slump and associated economic slowdown and later by the fracturing of the GCC over the current GCC crisis. The planned GCC Railway was suspended for economic reasons after sliding government revenues made the regionwide rail-link unfeasible. The project highlighted the challenge of aligning policy across the six Gulf governments as each member state had individually awarded contracts for its own sector of the line and based decisions on whether to continue or cancel the project on national, rather than GCC, interests.25 Meanwhile, the Qatar row erupted just as the GCC was preparing to implement a shared Value Added Tax (VAT) that was set to come into operation on January 1, 2018. In the event, only Saudi Arabia and the UAE went ahead with the introduction of VAT (and, even then, in a far from uniform manner), while the deep cracks the crisis exposed in the GCC made it harder to envisage the creation of new integrative mechanisms to share information and collect data across the political divide.26

The varying examples of workable and unworkable cooperation illustrate the missed opportunities for further integration during both the decade-long era of high oil prices and record budget surpluses after 2003 as well as the political and security pressures for closer coordination after 2011. Intra-GCC trade increased significantly in the nine years between the launch of the common market in 2008 and the Gulf crisis in 2017, even as the single currency foundered and the customs union remained incomplete.27 In the security realm, the failure to reach agreement on closer political union in 2012 and 2013 did not impede the ratification of the GCC Internal Security Pact in 2013 or the creation of a unified terror “blacklist” by the ministers of interior of the six GCC states in 2015.28 Ironically, given the accusations later made by Saudi Arabia and the UAE, Qatar was the first GCC state to ratify the internal security pact in August 2013 in one of the first moves Qatari Emir Sheikh Tamim bin Hamad Al Thani made after assuming power.29

The GCC Crisis

The implementation of the internal security agreement showed that member states were prepared to share information and act collectively if they perceived a common threat. Developments since 2011 have gravely weakened, if not shattered, the notion of collective self-interest that underlay the decision to establish the GCC back in 1981 and provided a baseline of cooperation ever since. The regional upheaval of the Arab Spring and the role of Islamist groups in political transitions in North Africa underscored the dramatic divergence in threat perceptions that conditioned policy responses in Doha and the new Abu Dhabi-Riyadh-Manama axis. Indeed, the triumvirate of Saudi Arabia, Bahrain, and the UAE came to view Qatar as hostile to regional security not once but twice. For Qatar, the diplomatic row of 2014 and wide-ranging blockade that began in June 2017 meant that officials in Doha recast the Saudis and Emiratis as a real threat to their national sovereignty and physical security.

Much has been said and written about the current iteration of the Gulf crisis, which began on May 23, 2017 with the hack of the Qatar News Agency and implantation of false statements attributed to Sheikh Tamim that formed the basis for a subsequent media onslaught by Saudi and Emirati outlets. Two weeks later, on June 5, 2017, Saudi Arabia and the UAE joined with Bahrain and Egypt to sever diplomatic ties with Doha and impose a comprehensive land, air, and sea blockade of Qatar. The abrupt closure of Qatar’s only land boundary had an immediate, if only temporary, impact on the movement of necessities such as food and medicine into Qatar. Many of these had been trucked in from Saudi Arabia (and farther afield from Jordan and Lebanon) or brought by ships that docked at ports in the UAE for onward transmission of their cargoes, again by truck, to Qatar. A December 2017 report on the crisis by the Office of the United Nations High Commissioner for Human Rights (OHCHR) estimated that Qatar had imported 93 percent of its construction material, 76 percent of its sugar, and 59 percent of its dairy products from its three Gulf neighbors that made up, with Egypt, the so-called Anti-Terror Quartet.30

The GCC crisis has also exposed the absence of the GCC from virtually every stage of the current crisis, which rendered it marginalized and irrelevant to further developments that are realigning the centers of gravity in Gulf politics. The GCC was chosen neither as the mechanism to communicate the initial grievances against Qatar nor as a facilitator of dialogue or mediation between the disputing parties. It could not even be involved in preventing potential military escalation, which was a possibility—as stated by Kuwaiti Emir Sabah al-Ahmad al-Jaber Al Sabah during a September 2017 press conference at the White House with US President Donald Trump.31

The irrelevance of the GCC and its potential death knell as a fully functioning organization of six members became evident during its annual summit in Kuwait City on December 5, 2017. Qatar was the only state that sent its ruler to Kuwait to attend the summit, which many felt was taking place only out of respect to its host Emir Sabah, a former foreign minister of 40 years’ standing who, at 88, is regarded as the elder statesman of the Gulf. A meeting of foreign ministers the day before the summit broke up in acrimony and the summit itself lasted for less than a session of the planned two-day meeting as it, too, descended into recrimination and finger-pointing by representatives of the three blockading Gulf nations.32 Officials in Abu Dhabi, moreover, chose the morning of the GCC Summit to announce details of a far-reaching partnership with Saudi Arabia to cover “all military, political, economic, trade and cultural fields.”33

Even accounting for the many examples of tension between Saudi Arabia and the UAE documented in this paper, it is this new alignment that looks set to shape policy-making in the Gulf in a “post-GCC era,” both in terms of its protagonists’ actions and the counterreactions of other Gulf states. As an institution, the GCC is likely to endure rather than be formally terminated or dissolved, but experience elsewhere in the Gulf suggests that it will simply become ever more marginal to the point where it effectively disappears from the policy-making landscape altogether— the same fate as that of Saudi Arabia’s old Petromin oil company, which was left to wither away as ARAMCO became the premier entity in the field.34 For their part, it is hard to see how Qataris could ever again trust an organization that manifestly failed to prevent three of its members from turning against them twice in three years. At the same time, officials and publics in Kuwait and Oman have watched with wariness and a sense that they, too, could be vulnerable to Saudi or Emirati pressure to follow a particular line in regional policy-making, especially if and when they undergo their eventual transition to new leadership.

Kristian Coates Ulrichsen is a Non-resident Senior Fellow at Arab Center Washington DC (ACW), and a Baker Institute Fellow for the Middle East at Rice University. To learn more about Dr. Ulrichsen and read his previous publications Click here

1 Jeremy Jones and Nicholas Ridout, A History of Modern Oman (Cambridge: Cambridge University Press, 2015), pp. 185-186.
2 Abdulkhaleq Abdulla, “The Gulf Cooperation Council: Nature, Origin, and Process” in Michael Hudson (ed.), Middle East Dilemma: The Politics and Economics of Arab Integration (New York: Columbia University Press, 1999), pp. 154-155.
3 Matteo Legrenzi, The GCC and the International Relations of the Gulf: Diplomacy, Security and Economic Coordination in a Changing Middle East (London: I.B. Tauris, 2011), p. 35
4 For a good overview of mid-twentieth century territorial claims and counterclaims, see Michael Quentin Morton, Buraimi: The Struggle for Power, Influence and Oil in Arabia (London: I.B. Tauris, 2013).
5 “FACTBOX: Rivalry and Differences between Saudi and UAE,” Reuters, April 6, 2010, https://reut.rs/2uNVDkf.
6 Richard Spencer, “Naval Battle between UAE and Saudi Arabia Raises Fears for Gulf Security,” The Daily Telegraph, March 26, 2010, https://bit.ly/2b0cEv8.
7 Anoushiravan Ehteshami, “Reform from Above: The Politics of Participation in the Oil Monarchies,” International Affairs, 79(1), 2003, p. 55.
8 Hiba Khodr, “A Preliminary Comparative Study of Policy Making in two GCC Countries – Qatar and Kuwait: Processes, Politics, and Participants,” Politics & Policy, 42(2), 2014, p. 272.
9 Kristian Coates Ulrichsen, “Qatar: The Gulf’s Problem Child,” The Atlantic, June 5, 2017, https://theatln.tc/2rEWJtD.
10 “Khalifah’s Comeback?” Gulf States Newsletter, Volume 21, Issue 528, January 29, 1996, p. 2.
11 “UAE’s Withdrawal from Monetary Union is Justified,” Gulf News, May 21, 2009, https://bit.ly/2GAXEBN.
12 “Oman opposes Gulf union,” Arab News, December 8, 2013, https://bit.ly/2ElAsFK.
13 Sara Hamdan, “Gulf Council Reaches Out to Morocco and Jordan,” The New York Times, May 25, 2011, https://nyti.ms/2uSYAjM.
14 Kristian Coates Ulrichsen, The Gulf States in International Political Economy (Basingstoke: Palgrave Macmillan, 2015), p. 202.
15 Fred Lawson, “Transformation of Regional Economic Governance in the Gulf Cooperation Council,” Center for International and Regional Studies, Georgetown University School of Foreign Service in Qatar, Occasional Paper No. 10, 2012, p. 6, https://bit.ly/2uRjPSS.
16 See Gulf Organization for Industrial Consulting, https://www.goic.org.qa/GOICCMS/About_EN.html.
17 Ibid., p. 7.
18 Dylan Bowman, “GCC Common Market Comes into Effect,” Reuters, January 1, 2008, https://bit.ly/2GzH3T0.
19 Rory Miller, “GCC Meeting in Riyadh Points the Way Forward,” The National, November 22, 2016, https://bit.ly/2JkunNs.
20 Justin Dargin, “Qatar’s Natural Gas: The Foreign-Policy Driver,” Middle East Policy, 14(3), 2007, p. 139, https://bit.ly/2GzZt67.
21 Justin Dargin, “The Dolphin Project: The Development of a Gulf Gas Initiative,” Oxford Institute for Energy Studies, NG 22, 2008, pp. 23-24, https://bit.ly/2GAIi06.
22 Andy Critchlow, “Saudis Demand Say in Emirates Pipeline,” International Herald Tribune, July 12, 2006, https://nyti.ms/2q9Flxp.
23 Newton Howard, “Nuclear Power for the Gulf States,” Center for Advanced Defense Studies, Defense Concepts Series, April 2007, https://bit.ly/2JjC3Qh.
24 Mari Luomi, “Abu Dhabi’s Alternative-Energy Initiatives: Seizing Climate-Change Opportunities,” Middle East Policy, 16(4), 2009, p. 109, https://bit.ly/2Em8c5Y.
25 “GCC Rail Project Delayed over ‘Technical Problems’,” Trade Arabia, March 30, 2017, https://bit.ly/2GyBFzj.
26 “Gulf States Prepare for VAT in Time of Crisis,” AFP, June 21, 2017, https://bit.ly/2IuSkQR.
27 Karen Young, “Self-Imposed Barriers to Economic Integration in the GCC,” Arab Gulf States Institute in Washington, Market Watch blog, August 4, 2017, https://bit.ly/2GYOlz6.
28 “GCC to Have Unified Terror Blacklist; KSA Efforts Hailed,” Arab News, May 2, 2015, https://bit.ly/2Em0Dfi.
29 Jumana Al Tamimi, “GCC Security Pact Divides Kuwait,” Gulf News, March 2, 2014, https://bit.ly/2HagMYp.
30 OHCHR, “OHCHR Technical Mission to the State of Qatar, 17-24 November 2017: Report on the Impact of the Gulf Crisis on Human Rights,” December 2017, p. 11, https://bit.ly/2q9KNj5.
31 “Remarks by President Trump and Emir Sabah al-Ahmed al-Jaber Al-Sabah of Kuwait in Joint Press Conference,” The White House, September 7, 2017, https://bit.ly/2Fexkkg.
32 Khalid Al-Jaber and Giorgio Cafiero, “The GCC’s Worst Summit,” Al Jazeera Online, December 9, 2017, https://bit.ly/2GRU3mr.
33 James Langton, “Sheikh Khalifa forms joint military alliance between UAE and Saudi Arabia,” The National, December 5, 2017, https://bit.ly/2AFjhi3.
34 For more details, see Steffen Hertog, “Petromin: The Slow Death of Statist Oil Development in Saudi Arabia,” Business History, 50(5), 2008, pp. 645-667, https://bit.ly/1RAshZ8.