As the GCC shows new unity, oil prices expose a new vulnerability

The Gulf Cooperation Council (GCC) has faced a few bumps along the road and recently succeeded in overcoming its latest crisis, thus opening a new page in its history at its 35th annual summit in Doha.

“The Riyadh Agreement marks the beginning of a new era in relations between GCC countries,” wrote Ayesha Al Merri in Al Ittihad, the Arabic-language sister newspaper of The National.

“Previous political developments that followed Arab Spring uprisings in the region revealed different political concepts in relationships between the six GCC member countries and external parties, particularly Egypt and Iran,” she said.

“The Doha summit was not filled with surprises. The mere fact that it took place was an achievement in itself. The summit proved that the Gulf Cooperation Council is here to stay,” she wrote.

In the pan-Arab daily Al Hayat, columnist Abdullah Nasser Al Otaibi observed that “it would be madness if the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman continued to modernise and urbanise their countries and acquire wealth without thinking of building great armies to protect their national accomplishments”.

He explained that it is unreasonable to pursue economic growth without a military equivalent to ensure each country’s life and survival.

“The construction of a GCC-wide army to defend its member countries has become an imperative and not a choice subject to the prevalence of ‘serenity’ between Gulf countries,” he wrote.

“The six Gulf countries united over 30 years ago to face a specific regional threat. They kept spinning the webs of this union and singing its praise in their songs and literary gatherings but never have they gone beyond this preliminary stage.

“They did not build a solid unitary reality that would protect them from internal political instabilities – for the simple reason that such a union occurred under urgent circumstances external to the Gulf. No sooner had the danger vanished than it left the GCC empty in its core.

“Today, the Gulf returns to its political unity in the face of a new impending danger: ISIL. True unity lies in having a joint economy protected by a strong GCC army and strengthened further by a unequivocal political will,” he concluded.

However while all eyes were on the summit, oil prices have dropped dramatically, affecting regional economies that rely heavily on oil and gas.

Salman Al Dossari, editor in chief of the pan-Arab daily Asharq Al Awsat, looked at the huge drop in oil prices that have lost around half their value compared to five months ago.

“Such decline in the price of a commodity that is vital to these [Gulf] countries is no doubt reminiscent of previous collapses of oil prices that caused great suffering for their people,” he wrote.

“The decline (if not collapse) of oil prices has overshadowed other political matters. Energy consumers who have long suffered from high oil prices are now gaining, while oil-producing countries are seeing their prospective revenues decline day after day.

“Certainly, no one expects oil prices to soar indefinitely. Whether we like it or not, price cycles must play themselves out. The current decline is therefore inevitable. If it were not happening today, there would have been a more serious drop in the near future,” he explained.

“Saudi Arabia and other Gulf countries are lagging in creating their own economic models to shift their economies away from oil dependence.

“Despite all the assurances and promises of five-year plans, oil remains the cornerstone for state revenues. The private sector remains underdeveloped while governments remain the primary source of economic activity,” he concluded.

Translated by Carla Mirza

cmirza@thenational.ae

Published: December 15, 2014 04:00 AM

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