The success of Gulf states’ economic integration relies on several crucial factors, with the presence of a well-developed infrastructure being paramount. Without it, challenges to GCC-wide cooperation will persist, something we are witnessing.
Addressing the long-standing issues and slow progress in the development of common Gulf infrastructure underscores their profound impact on greater economic integration, particularly that of the common market. A pan-Gulf transportation network, which encompasses commercial, tourist, and environmental facets, remains largely underdeveloped in most of the GCC countries.
This is despite more than five years having passed since the initially specified completion date, which was based on the strategic importance of water connections for economic activity and the preservation of the abundant marine wealth in the Arabian Gulf threatened by increasing salinity.
Alarming reports from the UN indicate that if immediate measures are not taken to combat pollution and the salinity, the region’s abundant marine wealth may disappear within the next 40 years.
The same holds for the Gulf’s gas network, an essential component not yet included in the agenda despite its significant role in the development of all GCC countries. There are several stalled projects related to bridges and roads, indicating a missed opportunity to learn from the successful King Fahd Causeway between Saudi Arabia and Bahrain. This causeway yielded invaluable commercial and economic benefits for both and significantly eased the movement of citizens and residents throughout the GCC.
These examples suffice to underscore the critical importance of infrastructure projects for the economies and their closer integration. Overcoming the state of stagnation and taking concrete steps towards completing collaborative projects is essential to providing that substantial boost. This is more crucial than ever, given the global context and the pressing need for enhanced cooperation regionally.
A common fund?
On extra scrutiny, several compelling reasons are there leading to halting various projects, but we will focus primarily on financial constraints—a pivotal issue that can be addressed through creating a ‘Gulf Fund for Infrastructure’.
Such a fund is not only feasible but readily available. It should be entrusted with the responsibility of overseeing the execution of all delayed/suspended infrastructure projects. It should be granted full authority to operate professionally and with the active participation of all GCC countries.
The favourable state of oil prices at present enables GCC nations to endow the fund with ample capital, ensuring it can fulfil its tasks without undue obstacles. Should the establishment of this new fund prove impractical, an alternative solution would involve repurposing the Gulf Investment Corporation, which was established four decades ago and whose work was limited to the acquisition or participation in some projects in the GCC.
This under-utilization of its significant financial capacity does not correspond with the scale of projects it funds, necessitating the activation and maximization of this entity’s financial capabilities.
Such options are practical, with neither imposing additional financial burdens on the GCC countries in the long run. The new fund could impose fees on services rendered by new infrastructure projects and operate them commercially. This approach not only makes the fund self-sustaining over time but potentially profitable for the contributing GCC countries, aiding in the diversification of revenue streams.
The King Fahd Causeway exemplifies this lucrative strategy effectively. While the idea was first proposed in 1966 and took two decades to materialize, some of the currently delayed projects have languished for over 30 years. This underscores the urgency of taking decisive action to complete the critical elements of joint Gulf infrastructure.
Achieving progress necessitates moving past superficial decision-making and concentrating on making significant, impactful resolutions essential for establishing a common market. For instance, the 120th meeting of the GCC Financial and Economic Cooperation Committee, recently held in Muscat, approved controls for exempting industry inputs.
While these steps are crucial, their success hinges on the development of advanced infrastructure and a unified Gulf common market.