Arabia’s Future EU

Europe is now united in an ever-expanding union that shares common borders, a single currency, and an increasingly unified political economy. It has been so successful (at least so far) that many regions of the world are trying to copy the system — in East Asia, Africa, and South America. Yet perhaps the most successful version is along the coast of the Persian Gulf, the Gulf Cooperative Council (GCC).

Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain, and Oman.

Formed in 1981 in response to prevent disorder spreading with the outbreak of the Iran-Iraq War, for years the GCC operated as a mere council of cooperation. In 1982 it established the Gulf Standards Organization and in 1984 set up the Gulf Investment Corporation.

Beyond that, little happened until the mid-1990s, from which time the countries slowly set things in motion to unify many bureaucratic and administrative agencies and procedures between countries. In 1992, the GCC Patent Office was approved and established. It has quickly become very easy for nationals (although not all residents) of GCC countries to move and work between other GCC countries. In 1999, they set to establish a Custom’s Union (although this is still not finalized). Most recently, as of 2009, a universal driver license is issued in all states of the GCC, a key factor in a region where automobiles are the primary, if not only, form of transnational transit for most people.

The GCC was even scheduled to set up a single currency next year, but that has been delayed due to Oman’s reluctance to join, Qatar’s disagreement with the policy, and the UAE’s frustration that a GCC Central Bank would be in Riyadh, not in Abu Dhabi or Dubai. On that note, one barrier to further unity is the Saudi-centric nature of the GCC — Saudi Arabia has the largest economy in the region and has great influence over its smaller, poorer neighbors, and the GCC headquarters is already in Riyadh. To put a GCC Central Bank in Riyadh would only further institutionalize the de facto dominance of Saudi Arabia in the region and in the council. (If the EU experience is any guide, keeping most institutions of the government in Brussels, in tiny Belgium, is the best way to avoid large countries lording it over smaller countries. Perhaps GCC institutions should be estabilshed in tiny Bahrain?)

A single currency seems a long way off, but open borders are probably just around the corner. While it might seem strange to have open borders in relatively backwards countries, the fact of the matter is that the wide open desert borders mean that anyone who wants to illegally cross over the border can without too much hassle. Opening borders would give that freedom, and convenience, to ordinary people and promote cross-border business. For example, the UAE is separated from Qatar but a stretch of Saudi land. If the borders were open, cars and buses could travel between Abu Dhabi/Dubai and Doha, two major hubs of regional activity, and further promote regional economic growth.

The GCC is not in expansion mode. The only candidate scheduled to join in 2016 is Yemen, to which there has long been suspicion because of its republican, not hereditary, government. There have been friendly moves towards Iraq, but not consideration of it joining. Jordan, despite being a fellow Arab monarchy, is not even on the GCC radar.