trade agreement
Some of the recent UAE-Oman deals like the one on rail can easily slot into the wider GCC network. Image Credit: Pixabay

Apart from the longstanding cooperation between Gulf states, the bilateral alliances between GCC nations have gained great momentum since the second-half of the last decade, helped along by bilateral cooperation committees and which led to implementing significant projects.

The recent visit by UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan to Oman last week adds significantly to this, and expected to gain more significance as a result of the common strategies and policies adopted. Because the implementation of projects at the bilateral level involves fewer formalities, the process can move more quickly.

Backing Oman’s renewable energy ambitions

The GCC countries have a history of mutually beneficial collaborations that have led to significant initiatives, which have in turn contributed to the development of infrastructure, joint investments and trade, thus boosting growth and living standards. One of these is the Ibri solar power plant, which cost $403 million and is being built with Emirati support. The project will help reduce the country's reliance on natural gas for the generation of electricity and supply 50,000 homes with electricity while surplus gas will be exported.

Additionally, the Dhofar Wind Power Plant, being built with support from Abu Dhabi Fund for Development, is crucial for the development of renewable energy sources as it would supply electricity to 16,000 houses, or 7 per cent of the demand in the Dhofar Governorate.

The trade exchange between the UAE and Oman is particularly significant as the volume has increased by Dh6.1 billion in joint investments and by Dh50 billion over the last 10 years. Additionally, among GCC nations, Oman is the UAE's second-largest commercial partner.

Old and new industry

Given the scope of the projects announced during the President’s visit, there will be a qualitative shift in cooperation between the countries. But it will be different from earlier due to the type of projects and the number of joint investments, especially as greater emphasis has been made on implementing projects that depend on clean energy and sophisticated technology.

In total, 16 agreements and MoUs were signed between the UAE and Oman, covering energy, industry, research, innovation, IT, AI, and vocational training. They also included traditional industries that will help create jobs, like transportation, agriculture, livestock, fisheries, and financial services.

Gulf-wide collaboration, whether bilateral or multilateral, is really seen as supportive of and adding to the GCC's overall cooperation. Interestingly, one of the agreements between the UAE and Oman paves the way for collaboration between Oman Railways and Etihad Rail. This would surely help Oman's railway network improve and speed up the process of joining the Gulf rail network.

This highlights that the momentous visit will significantly advance bilateral ties as well as regional cooperation in the Gulf.