GCC plays long game to increase influence

Economic policy and infrastructure now top priority after solid record of forging mutual protection and common agenda.

The Gulf Co-operation Council was created in 1981 as a purely defensive group. The Soviet Union had invaded Afghanistan to support the communist government, the Iranian revolution installed a fundamentalist Shia regime across the Gulf and Saddam Hussein was planning his war with the ayatollahs. The new Iranian regime questioned the Gulf states' Islamic credentials, criticised their moderate stance and links to western countries, and aimed to export its revolution to the rest of the region.

Against such a background and with the Iran-Iraq war beginning to rage, the UAE, Saudi Arabia, Oman, Qatar, Bahrain and Kuwait felt compelled to bond together for mutual protection. Initially, the GCC's chief achievement was its own survival as an institution, with summits taking place every year, headquarters in Riyadh and a host of satellite agencies. It outlasted the devastating eight-year Iran-Iraq war but suffered a serious blow to its credibility when Saddam's Iraq invaded Kuwait in 1990, showing that the GCC had little ability to protect its members and leaving the six member states increasingly dependent on foreign relations.

Its attempt at military co-operation, the Peninsula Shield, has failed so far to build a credible force and the region still lacks integrated radar and early warning systems. Economic integration has suffered from divergent modernisation agendas. Today, however, 28 years after its founding and following a decade of economic growth in its member countries, the GCC has an opportunity to become a voice for the region's growing global interests.

So far, its greatest achievement has been to link the individual states' electricity grids. The project is 90 per cent complete and allows the states to buy or sell surplus electricity depending on their needs. Discussions are under way on a raft of shared economic and infrastructure projects, such as a central Gulf bank and a common currency, widely touted as a possible bulwark against future upheavals in the global economy, and a Gulf-wide high-speed rail network that could boost trade and cut the journey time between Abu Dhabi and Doha to 90 minutes.

"The most important sphere for the GCC is economic co-operation. The material is what touches the lives of the Gulf's people the most," said John Duke Anthony, founder of the National Council on US-Arab Relations and a regular at GCC summits. "People watching from outside the GCC often assume the GCC should be talking more about the security situation because it is a tense region and there are conflicts, including powers with expansionist ambitions, but the Gulf states are too small to have any kind of military impact.

"So, like the EU did, they are playing the long game. There will be difficult times but you just have to keep going with your aims through periods of uncertainty and that is what they are doing." Meanwhile, the global financial crisis is expected to feature heavily in the discussion at this year's summit, with the Gulf countries facing pressure from across the world to inject large sums of money into the frail world economy - pressure they should resist according to Mustafa Alani, an analyst at the Dubai-based Gulf Research Centre.

Once they have spent about a third of the summit discussing the GCC's 2008 performance, the heads of the Gulf states will look at the deteriorating security situations in Iraq, the Palestinian Territories, Pakistan and Afghanistan. Issues closer to home will also be on the table, including the UAE's claim to the Iranian-occupied Tunbs islands and Abu Musa. The first remarks traditionally go to Kuwait, the only Gulf country to have been invaded and which is still owed billions of dollars in reparations from Iraq.

Kuwait is under pressure to cancel Iraq's debt as a positive political gesture toward Baghdad and as a way to increase Arab leverage in the Iraqi capital, which GCC states fear is succumbing to Iranian influence. "It always surprises people that the Palestinians are not the main topic at the GCC but the GCC is not a reactive body and it doesn't exist to comment on what happened last month, last week or even on the day of the summit," said Mr Anthony.

However, the carnage in Gaza has pushed the Palestinian question to the top of this year's agenda, the Saudi foreign minister, Saud al Faisal, said this week. "Part of the Gulf state rulers' legitimacy in the eyes of their people is based on how they support their Arab brothers and sisters and how much they protect and embody the values of Islam. It is a religion of justice and the injustice visited by Israel upon the Palestinians is exhibit A," said Mr Anthony.