Although Oman’s lack of enthusiasm for a GCC Union hardly came as a surprise to any of the attendees of the IISS Manama Dialogue, the panel containing the Gulf Cooperation Council (GCC) Secretary-General, the Saudi Minister of State for Foreign Affairs and the Qatari Foreign Minister, seemed rather unaccustomed to the candor with which Omani Foreign Minister Yousuf Bin Alawi — oozing with confidence after the Sultanate’s success in brokering US-Iran nuclear talks — stated his country’s position.

The comments of Bin Alawi come as a sobering breath of fresh air in a debate that has largely been driven by geopolitical anxiety and fear. When King Abdullah of Saudi Arabia launched the call for a formal Gulf Union in December 2011, the Arab revolutions of Tunisia, Egypt and Libya had already overthrown Saudi Arabia’s old friend Hosni Mubarak and come eerily close to the kingdom’s own backyard in Bahrain and in the Eastern Province. Two years later, however, the Gulf states have largely weathered the Arab Spring and despite some hesitation, their American and British allies have gone back to making more vocal statements to restate their commitment to Gulf security.

Which brings us to the Omani view on the project of a Gulf Union, with which I cannot help sympathise: Rather than succumb to their existential fear of some geopolitical or internal threat — be it Iran or the Arab Spring — and focus on formally declaring a potentially problematic political union, member states of the GCC will benefit from shifting their attention back to substantive economic integration and development and — I would add — strengthening military interoperability on the ground. In a sense, we are before an ironic situation where effective unity may very well be hindered by superfluous talk of a formal union.

The Omanis have rightly emphasised the topic of economic integration, arguably the most substantive aspect of the GCC which remains incomplete. As I have attempted to argue more elaborately in the past (‘Three fallacies surrounding Gulf union’, open Democracy, February 4, 2013), the GCC has largely evaded addressing some of the most consequential issues on the economic agenda since its 2003 customs union agreement. Among them are the topics of intra-GCC labour mobility (or the ability of the citizens of one GCC state to freely work in another), actual implementation of national treatment for GCC investors and the harmonisation of beyond-border regulations. These are key steps towards tearing down barriers and putting in place a single market with the potential to address many of the Gulf’s labour skills-gaps and unemployment problems.

On the bright side, GCC leaders are beginning to send signals of commitment to strengthen joint defence efforts after decades of an unshakeable preference for bilateral arrangements with western powers. In doing so, they are encouraged by a debt-ridden, war-weary US that will like to see the Gulf states bear a greater share of the burden of preserving their own security. The closing statement of the GCC summit optimistically announced the creation of a joint defence command that could help pool together member states’ missile defence and early warning systems. Hopefully, the GCC states will put their money where their mouth is.

By contrast, GCC member states rarely see eye to eye on the issues of national political sovereignty and foreign policy, both of which are ironically central to the question of a formal Gulf Union. In his speech at the Manama Dialogue, Saudi Minister of State for Foreign Affairs, Dr Nizar Bin Obaid Madani, proclaimed that GCC states would eventually have to forego ‘traditional’ notions of sovereignty in order to proceed towards a formal political union. His comments visibly did anything but assuage the concerns of the smaller states like Oman, the UAE, Kuwait and Qatar fearful of handing their national sovereignty over to Saudi Arabia.

To illustrate, both Oman’s and the UAE’s resistance to the single currency project should be interpreted in this light. The debate is hardly an economic one: The economic consequences of the single currency will probably be minute, since GCC currencies are pegged to the US dollar (with the partial exception of Kuwait). As it stands, GCC central banks exercise very little control over national interest rates. Instead, the resistance is better understood as a struggle to preserve national currency — usually decorated with portraits of the country’s ruler — in as much as it represents a symbol of national sovereignty.

The divergences in the approaches to foreign policy adopted by different GCC states are all too well known, with Qatar, Saudi Arabia and the UAE often backing rival groups in Syria and Egypt. For its part, Oman has drawn its own course over the years: Following the Camp David accords, it remained the only Arab country besides Sudan not to suspend ties with Egypt and remains unique among its Gulf counterparts in maintaining cordial ties with Iran.

Tensions between Gulf states over the issues of sovereignty and foreign policy — central to any discussion on a formal political union — are alive and well. Very much contrary to the remarks of Saudi Prince Turki Al Faisal, who proclaimed “Gulf Union with or without Oman”, I believe the GCC will be better off preserving its cohesion and focusing on topics both achievable and significant — namely, a deepening of economic integration and military interoperability, which it has long neglected.

Hasan Tariq Alhasan a Bahrain-based economic and political analyst, writes regularly on Bahraini and Arab affairs.