Politics overshadowed economy in Riyadh GCC Focus

The 27th GCC summit in Saudi capital Riyadh last week succeeded in making little but steady progress regarding the goal of integrating regional economies.

Yet, compared to the 26th summit held in Abu Dhabi in December 2005, the Riyadh edition did not come up with bold economic decisions.

Noticeably, the meeting brought together all serving head of states of the six-nation bloc, a scene not witnessed for a long time. However, the leaders spent a considerable amount of time discussing political challenges facing the region including violence in Iraq, developments in Lebanon, the Palestinian question and Iran's nuclear programme.

During the summit, the GCC leaders could still touch upon the three main economic issues of the bloc, namely the customs union, the common market and the monetary union.

Regarding the customs union, the supreme council adopted a unified guide on imported food goods. This decision is subsequent to the one made in 2005 in Abu Dhabi summit concerning a standard trade policy.

Yet, the final communiqué made no commitment to completing all requirements of the customs union by the end of 2007.

Commenced in 2003, the customs union status was originally scheduled to be completed in 2005. But it was extended during the Abu Dhabi summit for another four years.

It is not entirely clear whether there will be a further delay in meeting all the conditions.

Progress

The summit made progress on establishing the common market, which requires free movement of production components amongst the GCC member states.

In this respect, the supreme council supported the decision made by the economic and financial committee to expand the economic scope of activities granted to the GCC to include three subjects, namely: insurance, clearance at governmental entities and transport. The Abu Dhabi summit had acknowledged the addition of recruitment offices, car rentals and most cultural activities.

All such efforts are regarded essential for the objective of making member countries ready to implement the common market status by the end of 2007. In fact, this very date should coincide with the end of meeting all conditions of the customs union.

Surprisingly, the summit made no retracting on the ambitious goal of achieving a monetary union amongst member states by 2010. Thus, the leaders called on the concerned committees to continue developing the criteria, which then must be presented to the next summit in Oman.

Ironically, Oman has gone public in announcing its inability to meet monetary union conditions by the target date. In fact, Omani authorities had indicated their views in previous occasions.

It is plausible that the GCC countries would not be ready to implement the monetary union details by the agreed date since they have not completely met all requirements related to common market.

The Riyadh meeting would most likely be accredited for adopting a unified guide on imported food goods. However, the summit did not comment on the lack of progress on the common market.

Clearly, regional political issues allowed GCC leaders meeting in the Saudi capital only tight room to realise a progress on economic matters.

Undoubtedly, the heads of states could not overlook acute challenges encountering the entire Middle East region. It remains to be seen if conditions would improve during the next summit in Muscat.

- The writer is Member of Parliament, Bahrain.