JEDDAH, 1 January 2008 — The six-member Gulf Cooperation Council (GCC) with a combined economy of $715 billion makes history today with the launch of a common market, which is expected to draw more foreign investment to the region.
GCC Secretary-General Abdul Rahman Al-Attiyah described the launch of the Gulf Common Market on Jan. 1 as “historic”, adding that it would ensure “economic equality” among GCC citizens.
The GCC, which was formed in 1981, groups Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the United Arab Emirates.
The decision to launch the common market was taken by the group’s leaders at their last summit, which was held in Doha on Dec. 3 and 4. They also announced plans to achieve a currency union by 2010.
“The Gulf Common Market aims to create one market... raising production efficiency and optimum usage of available resources and improving the GCC’s negotiating position in international economic forums,” said a final communiqué issued at the end of the two-day summit.
The market offers equal opportunities for all GCC citizens including the right to work in all government and private institutions in member states, buy and sell real estate and make other investments, move freely between the countries, and receive education and health benefits, the communiqué said.
GCC economic chief Mohammad Al-Mazroui said the common market would increase investments and trade between member countries. “It will also strengthen the position of member states in free-trade talks,” mainly with the European Union, Agence France Presse quoted Mazroui as saying.
Some 35.1 million people live in the GCC, although citizens of the member states represent around only 60 percent of the total population, the remainder being guest workers.
In addition to allowing the free flow of capital, the common market gives GCC nationals freedom of movement, residency and employment — in both private and public sectors — in all six countries, Attiyah said.
“The common market... will allow the citizens of GCC member states to benefit from opportunities offered by the Gulf economy and will open important areas to GCC and foreign investments,” he said in a statement.
The GCC states also represent more than half of the oil reserves of the Organization of Petroleum Exporting Countries (484 billion barrels).
Trade between GCC member states currently account for just around 10 percent of overall foreign trade. But this should increase to 25 percent in the next two years, said Issam Fakhrou, president of Bahrain’s Chamber of Commerce and Industry.
According to statistics on the organization’s website, GCC foreign trade was $282.8 billion in 2005, a figure which predates the sharp surge in oil prices which boosted revenues for the six countries. “The launch of the market will mark an important step in GCC economic integration,” said Eckart Woertz, program manager in economics at the Dubai-based Gulf Research Center.
He said the new move demands opening of GCC markets and harmonization of regulations, ranging from labor laws to pension schemes and social security entitlements.