Common market has many more hurdles to scale

The Gulf Common Market (GCM) stands to strengthen economic integration, notably trade, within the Gulf Cooperation Council (GCC). GCM came into being at the start of January 2008.

Leaders of Saudi Arabia, the UAE, Kuwait, Oman, and Bahrain and the host Qatar decided to implement the GCM during the 28th summit held in Doha in December 2007.

The common market project could have far- reaching implications for the six-nation GCC if and when applied.

The GCM covers a wide range of issues, namely, 1) relocating and residency; 2) working in public and private sector firms; 3) pensions and retirement; 4) practising all sorts of professions; 5) getting involved in economic and investment activities; 6) property ownership; 7) movement of funds; 8) access to similar taxation code; 9) dealing in the stock market and setting up of companies and 10) having access to similar educational, health and social services. On the other hand, GCM has a negative list that consists of four main activities, namely, 1) Haj and Umrah; 2) recruitment of foreign workers; 3) distribution of magazines and newspapers and 4) commercial agencies.

Chances are that the ban on commercial agencies be removed, as member states open up their economies with regards to importation of branded products for means of fostering rivalry. Yet, it is unlikely that Saudi authorities would allow competition from fellow GCC establishments to provide services to Makkah and Madinah partly for security and management reasons.

Still, ending the ban on manpower service requires coordinating policies concerning working conditions and compensation of foreign workers. Also, allowing for distribution of magazines and newspapers requires change of socio-political policies in member states, something not easily attainable.

The main challenge lies in member states developing and implementing the required legislative pieces and applying them. This is notably true in some areas such as trading of stocks and setting up of companies. Implementation of certain aspects of the common market should prove to be faster than other areas. This is particularly true with regards to movement of funds. In reality, movement of funds is a common phenomenon, as regional investors drum up funds for projects in different activities. Many new financial institutions being set up in GCC countries have regional investors.

Property ownership is one such area that is likely to prove difficult to implement and somehow infamous for local communities. Bahrain is witnessing calls for placing restrictions on ownership of GCC subjects of property in residential districts, as part of moves to fight a rise in prices. Authorities in Bahrain removed all restrictions on property ownership in order to develop a competitive edge over rivals in the region. Officials viewed the lack of a ban as an opportunity to bring funds into the country.

By some accounts, trade level within the six-nation ranges between 20 and 25 per cent of worldwide trade of GCC countries. Share of regional trade as of global trade has declined over the past few years due to sharp rise in exports on the back of firm oil prices.

Latest statistics suggest that total GCC trade amounts to $720 billion divided between exports of $470 billion and imports of $250 billion. Petroleum products account for the majority of exports in all GCC countries. The hydrocarbons sector accounts for more than 90 per cent of exports of Kuwait.

The common market represents a milestone in the GCC's history ever since its inception in 1981. The time is ripe for GCC subjects to enjoy the economic benefits of a framework that unites them. There is so much prosperity around that ought to be shared.

- The writer is a Member of Parliament in Bahrain.