There can be no doubting the fundamental importance of yesterday’s launch of the GCC Common Market. For the first time, reality has been given to the aspirations and vision of those who recognize that only by forming a viable and vibrant economic bloc can the six member states look forward to a prosperous, industrially diversified future.
The free movement of goods, capital and nationals within the GCC will steer the direction of investment and skills to where they are most needed at any given time. A single market with a combined economy of $715 billion represents a considerable economic power. This will only increase as the amount of internal trade grows from the present ten percent to 25 percent of foreign trade over the next two years. GCC countries will be able to direct their wealth into creating a wider range of local economic activities, diversifying the hydrocarbon base of their economies.
The new year thus begins with many alluring opportunities. As other free-trade areas have discovered, not least the European Union, it will take time to realize the potential of the GCC market. While the legal, economic and regulatory framework may be in place, it will require trial and error to establish the best practices as well as accepted standards and norms. The inevitable disputes will, at times, seem to threaten to derail the whole project. There will be losers as well as winners. Local businesses, not least here in the Kingdom, that have become used to working in protected markets will sometimes find themselves challenged by better businesses from elsewhere in the GCC. There will be protests and requests for exceptions and renewed favored status. But except in very special circumstances, the call for such protection must be resisted.
Indeed, all these future challenges must be seen as part of the process of tempering and strengthening the regional economy, enabling it to compete not only locally but in the wider world outside the region. In time, in a range of sectors where there is currently widespread duplication, there will be rationalization and consolidation of enterprises. The short-term cost, sometimes in jobs, will surely be outweighed in the long term by increased efficiency and profits. This will in turn generate more economic activity and more jobs. Unlike the EU, citizens of the GCC share a common language, culture and tradition which give it an immediate advantage in making the common market work. Not for the GCC the need, as in Europe, to translate every single document into 27 different languages.
The governments of the GCC have given businesses in the Gulf the tools for creating a prosperous and effective free-trade zone. It is now up to investors and businessmen working in a benign and encouraging regulatory environment to use these tools effectively in order to build a powerful economic community where the long-held dream of monetary union can inevitably become a reality. They are on a shared mission.
