Why Gulf Union? Why now?

When the GCC heads of state meet on Monday (May 14), the transformation of the GCC into a union is expected to top their discussions. The idea of a Gulf Union was already endorsed in principle in the last summit, held on Dec. 19-20, 2011. Among the issues that are likely to come up during this week’s summit are the shape of the union, its institutions and mechanisms, and the timetable for completing it.
When the GCC was established in 1981, its Charter explicitly stated that unity was one of its main goals, but many outsiders believed that unity was a farfetched dream.
While the six countries shared very close historical and cultural ties, it was argued then that for a union you needed more than that to build on. In particular a shared strategic vision of the future was needed and agreement on how to get there. Such strategic vision would include common approaches to defense, security, political and economic long-term interests. In addition, GCC countries were then short of experience in building a union structure. Keep in mind that there were no models to emulate at that time for such a union, as the European Union was still an idea.
Keep in mind also that in those days, most GCC countries had only recently gained their full independence after British withdrawal from the region. As a result, there were only nascent government structures that were just enough to build those new states, but not enough to also build a region-wide union.
However, much has changed since the GCC was established in 1981.
Take the economic side first. In those days, GCC economies were small, around $200 billion in total in 1981, dipping to below $130 in 1986. Today, the combined GCC GDP is around $1.5 trillion dollars and expected to surpass $3 trillion mark before the end of the decade.
Just 10 years ago, GCC economies were still relatively small and the GCC as a group did not have a customs union or a common market. GCC total goods and services were valued at less than $350 billion, compared to $1500 billion today. Trade between GCC countries was still below $20 billion annually.
The GCC Customs Union was established in 2003 and, as a result, intra-GCC trade today escalated to around $100 billion a year, and growing rapidly, at a rate exceeding 20 percent annually.
Intra-GCC investment was almost non-existent just two decades ago. Today, especially after the launch of the GCC Common Market in 2008, it is a major growth area. There are hundreds of thousands of GCC citizens and companies investing in other GCC economies, owning property, working or going to school. Growth of these cross-border activities is impressive at rates between 28 percent and 50 percent annually. People-to-people to contacts have become an almost daily fact of life. About 20 million tourists travel annually between the GCC countries.
It is hard to believe today, but 30 years ago, university graduates numbered only in the hundreds in some GCC states. The then-new GCC Secretariat was unable to find qualified candidates to staff its bureaucracy and run the early, modest, phases of the GCC integration process. Today they are millions of university graduates in the region, with tens of thousands graduating every year.
At the political and security levels, the region was in turmoil 30 years ago, and is still facing difficult threats and challenges. While the main antagonists have remained more or less the same, the nature of threats has changed to include nuclear and ballistic threats. Defense against nuclear proliferation and ballistic threats has by necessity to be organized in a collective manner. At the same time, safeguarding maritime trade has also become a more difficult challenge, because threats to navigation have multiplied and intensified, with increased piracy, terrorism and foreign intervention and arms smuggling.
Threats to the region’s environment have also multiplied. With the Iranian nuclear reactor coming on line last September, Gulf waters have become under serious threat of contamination should a nuclear accident take place, similar to Chernobyl or Fukushima. Most GCC countries get their desalinated water from the Gulf, which could become unusable for that purpose in case of a nuclear accident.
Lending a hand to the pro-union arguments, unintentionally of course, Iran’s President Mahmoud Ahmadinejad last month provocatively visited the occupied Abu Musa Island declaring it Iranian territory forever. Adding insult to injury, he declared the supremacy of Iranian culture in the region, now and since forever, according to a speech he gave during his visit to the island, the first ever by an Iranian president.
With such developed economies and complicated intra-GCC links, and with such heightened threats to the region, the tools needed to manage such an enterprise should also be changed, overhauled and upgraded. For GCC citizens to benefit from the collective power of their economies and strategic power, those countries need to enter into a more cohesive structure that could translate their countries’ natural assets into a powerful strategic weight, to negotiate on equal footing with other key players in the world stage, and to take full charge of their future.
The Gulf Union may just be that structure. For it to be effective, the union has to have a clear statement of purpose as well as the right institutions to run such a project. Without infringing on member states’ sovereignty, the union has to vest those institutions with enough mandate and authority to fulfill its member states’ goals and meet the challenges, both old and new, that the region faces.

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