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6 - Challenges in GCC Integration

from The Gulf Cooperation Council: A Rising Power and Lessons for ASEAN

Published online by Cambridge University Press:  21 October 2015

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Summary

• Complementation or Competition?

Since 1981, the Gulf Cooperation Council has progressed a great deal towards economic integration, despite the gradual process of establishing a free trade area, a customs union, and a common market. Much of the GCC member states' achievements, while driven by hydrocarbon resources, can be attributed to the Council's success as a group because it provides economic and political stability for the region. However, it remains to be seen if country-driven competition will preclude complementarity.

The key challenge for the GCC is to remain true to the original premise of integration. For economies of scale and scope to succeed, a complementary production export platform is necessary. In practice, it is hard to coordinate national plans so they balance with GCC-centric pursuits in cooperative competition for efficiency, productivity, and effectiveness. The GCC has a responsibility, given its hydrocarbon resources and monetized wealth, to finesse and help resolve internal Arab conflicts so as to contribute to regional and global stability. It is in a unique position to play this role as it straddles the East- West and North-South divides and because of its wealth and Arab Muslim identity.

• Human Resources Development and Jobs

The GCC's weakest link is Human Resource Development (HRD), as sustainable economic growth needs sustainable progress in this area. Kuwaiti, Qatari, and Emirati nationals are minorities in their own countries and are reliant on immigrants for their labour. The UAE retains the sponsorship system, categorizing foreigners as temporary migrants. Bahrain removed its sponsorship system in 2009, but urges a five-year GCC policy cap. In addition, women compose half of the GCC population. However, only 20 per cent of the region's female population are in the labour force due to cultural sensitivities, traditions, and values. Other challenges include nationals' preference for already highly saturated public sector jobs and mismatches in education, skills, and work attitude. This has resulted in GCC nationals' high, voluntary unemployment rates.

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The Gulf Cooperation Council
A Rising Power and Lessons for ASEAN
, pp. 28 - 36
Publisher: ISEAS–Yusof Ishak Institute
Print publication year: 2010

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