Naharnet

The Gulf Cooperation Council: An Alliance in Crisis

The Gulf Cooperation Council (GCC), which holds its annual summit Sunday in Riyadh amid a deep crisis, groups Sunni Muslim-led monarchies sitting on a third of the world's oil reserves.

The political and economic grouping -- a regional counterweight to Shiite Iran -- comprises Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.

But it has been in crisis since June 5, 2017 when Saudi Arabia, the United Arab Emirates and Bahrain, along with non-GCC member Egypt, severed diplomatic ties with Qatar.

They accused Qatar of supporting "terrorists" and being too close to Iran, something Doha denies.

Kuwait and Oman did not sever links with Qatar. Kuwait has tried unsuccessfully to mediate in the crisis.

- Born in 1981 -

The GCC was formed in May 1981, at the height of the Iraq-Iran war, and two years after the Islamic revolution in Iran sent tremors across the Sunni-led Gulf states, many of which have sizable Shiite populations.

The mostly desert GCC has a population of some 50 million, half of whom are expatriates.

Only Kuwait and Bahrain have elected chambers with legislative powers.

The six nations are ruled by family dynasties and ban political parties.

In 1984 the GCC formed a joint military ground force dubbed Peninsula Shield, but it was not able to prevent the invasion of Kuwait by Iraq in 1990.

Since US-led forces drove Saddam Hussein's army from Kuwait in 1991, GCC members have individually signed major defence pacts with Washington.

GCC states managed to dodge the pro-democracy protests unleashed by the 2011 Arab Spring, except for Bahrain, where authorities crushed Shiite-led protests demanding a constitutional monarchy and an elected prime minister.

At the height of the unrest -- in which dozens of people were killed and hundreds of mainly Shiite activists were detained -- the Gulf force rolled into Bahrain in March 2011 to back up the kingdom's security forces

The GCC has sought to deepen economic links among members by approving a common market, customs union, a shared currency and central bank, but most of the decisions have not been put into practice.

The GCC allows for the free movement of citizens and capital, but restrictions on hundreds of economic activities remain.

- Oil dependent -

Despite long-running projects aimed at diversification, the economies of the member countries are heavily dependent on oil, which make up around 90 percent of total public revenues.

The six countries currently pump more than 17 million barrels of oil per day, amounting to around 18 percent of world production.

Saudi Arabia and the United Arab Emirates, which account for 75 percent of the GCC's $1.4 trillion economy and four fifths of its population, have already adopted austerity measures.

On January 1, 2018, the two countries introduced a five percent value-added tax, a first for the Gulf, on most goods and services. Bahrain, Kuwait, Oman and Qatar have put off the introduction of VAT to 2019.

Average per capita income across the six countries is around $27,400.

The International Monetary Fund (IMF) said in November 2018 that growth in the Gulf will pick up in 2018 but will remain vulnerable due to volatile oil prices.

The economies of the GCC countries should grow by 2.4 percent in 2018 and three percent in 2019, after a contraction of 0.4 percent in 2017, the IMF forecast.

Source: Agence France Presse


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