It is possibly fair to term the 28th summit of Gulf Cooperation Council (GCC) held in the Qatari capital of Doha on December 3-4 as a big success on the economic front.
Amongst others, GCC head of states agreed to implement the Gulf Common Market (GCM) from January 2008. The Doha Declaration stated that the GCM aims at finding a unified market through which nationals will benefit from available opportunities. It will open wide avenues for inter-GCC activities and foreign investments.
The ambitious project covers all economic and investment services, dealings in the stock market and setting up of companies in the public and private sectors besides social insurance among GCC citizens.
The GCM allows for free movement of factors of production amongst member states.
Over the past two years, member states have agreed to widen the scope of activities granted to GCC subjects. In 2006 alone, three activities were added to the list, namely engaging in insurance, clearance of official documents in governmental departments and transport. Also in 2005, three other activities were included, namely recruitment offices, car rentals and most cultural activities. The GCC states have earned the common market status.
The most important announcement came from Saudi Arabia with authorities declaring that GCC citizens have the right to trade in shares listed on its stock exchange. This marked a major step forward, as traditionally Saudi Arabia tends to be the most conservative country within the GCC. What makes Saudi Arabia so special is the size of its gross domestic product (GDP). Its real GDP amounts to more than $300 billion, the biggest in the region.
Dubai and Bahrain have been largely practising common market principles for some time. It is possible that GCM could prove to be more useful to traditionally less open economies, notably Saudi Arabia.
On another economic front, the leaders made no retracting on the ambitious goal of achieving a monetary union amongst member states by 2010. It is not easy for the General Secretariat to clearly announce delay of the most ambitious project for the GCC. This was not surprising at all given the conservative nature of regional governments. Ironically, Oman has gone public in announcing its intention of not joining the monetary union by target date.
The leaders called on the committees to continue developing the criteria, which then must be presented at the next summit in Oman. The elements concern ratios regarding inflation, fiscal deficit, debt and reserves.
Saudi Arabia remains committed to implementing the project by 2010. It is believed that Riyadh, which hosts the GCC's General Secretariat, has insisted that progress must be made towards carrying out the monetary union. The argument goes that no single GCC project should stop merely because one or more members could not meet the requirements. Accordingly, similar lines are being drawn from the European Union experience. The EU comprises 27 member states, but not all including the UK, are members of the Euro zone.
The summit proved to be extraordinary on the political front as well. Iranian President Mahmoud Ahmadinejad addressed the annual gathering for the first time ever since GCC's establishment some three decades ago. The Iranian leader proposed a 12-point cooperation plan that entailed free trade and joint investments in oil and gas with GCC countries.
Clearly, the summit will go down in history as one of the most accomplishing ones. It is time for GCC subjects to enjoy the benefits of their grouping.
- The writer is a Member of Parliament, Bahrain.
