The integration of the Gulf Co-Operation Council (GCC): problems and prospects
Abstract
The formation of the Gulf Co-operation Council (GCC) in
1981 was perceived by most observers to be a collective security response to
the Iran-Iraq war. Despite this view, the group has endured ten years of
integration in a turbulent region and has survived: external threats to its
sovereignty, Islamic fundamentalism, the decline of oil prices, internal
unrest, attempted coups, and the invasion and occupation of a constituent
member. This poses the question: has the integration of these countries
proved to be a success? This thesis attempts to answer this question with
the aid of a three dimensional analysis.
The first dimension examines the theory and practice of
integration. Its primary objective is to provide an insight into integration.
As the GCC can, at best, be categorised as a Customs Union, this chapter
concentrates on Free Trade Areas and Customs Union theories and
explores their relationships with tariffs, protectionism, developing
countries, and politics. A review of the empirical analyses in the field is
essential due to the fact that a mathematical technique is applied to GCC
trade in the latter part of this thesis. The existence of political, economic
and manpower factors are found to be more detrimental to the GCC's
interests than its adherence or convergence to the theory and practice of
integration.
An analysis of these three factors constitutes the second
dimension of the thesis. This commences by examining the Islamic
antecedents of the member countries, pan-Islamism and nationalism in
the 19th century, and Middle Eastern efforts at integration from the
decline of the Ottoman Empire to the present. The establishment of the
existing GCC nations and an examination of their natural resources,
demography, industry, infrastructure, agriculture, and fisheries is covered,
as is the impact of the 1990-91 occupation of Kuwait and the BCCI
liquidation. A review of manpower factors includes an examination of
the labour market in the pre and post 1973 period with emphasis given to
the role of expatriate and indigenous labour. In addition, the influence of
education, women in the workforce, nationality, and residence policies on
indigenous labour is discussed.
The third dimension reviews the prospects of the GCC. This
is performed through the construction and utilisation of matrices which
examine the similarity or dissimilarity of GCC trade to the World,
Developed and Developing Countries. United Nations Standard
Industrial Trade Category (SITC) data up to 3-digits, has been used to
construct twenty seven 22 x 22 matrices. Nine of these matrices indicate
GCC trade with the Rest of the World and are linked to economic and
financial literature on the Gulf in order to examine their credibility.
Eighteen matrices which indicate trade with the Developing and
Developed World indentify potential trade creation, trade diversion and
prospects.
It is the conclusion of the thesis that the GCC has not
succeeded in its integration efforts. The lack of co-ordination to perform
as a single unit in economic, political, and military areas, the
undemocratic political systems, the exploitation of expatriate labour, the
segregation of indigenous labour, and most importantly, the wasted
opportunities indicated by the matrices of greater trade creation with the
Developed and Developing Countries contribute significantly to the
ineffectiveness of the group.
Type
Thesis, PhD Doctor of Philosophy
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