Why the GCC trading bloc isn’t living up to its name

When the annual Gulf Cooperation Council (GCC) summit in Kuwait ended abruptly this week, so too, did hopes of a breakthrough in the bloc’s biggest crisis in decades.

The meeting was the first since Saudi Arabia, Bahrain, the UAE and Egypt cut trade and diplomatic ties with Qatar in June, after accusing it of supporting “terrorism”, allegations that Qatar denies.

The GCC summit concluded abruptly on Tuesday instead of Wednesday, with delegates leaving Kuwait after a closed session.

But even before the summit officially kicked off, divisions were very much on display.

The UAE announced it had formed a new economic and military partnership with Saudi Arabia that would be separate from the GCC. And Saudi Arabia, the UAE and Bahrain decided not to send their respective leaders to Kuwait.

So is the GCC trading bloc still living up to its name? And how is pressing the pause button on economic cooperation affecting the oil-rich region?

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really has created the first step towards partial disintegration of the union…I don’t think you’re going to hear any headlines on cooperation or any strategy from the GCC anymore.”]

According to Ayham Kamel, head of MENA at the Eurasia Group, the GCC bloc operates in name only now.

“Virtually, we have an organisation that is able to do very little. There’s no consensus on the major issues – not on foreign policy, economics, so I think it will remain there in name, but the effectiveness has gone down to almost zero.”

The Gulf crisis “really has created the first step towards partial disentigration of the union … I don’t think you’re going to hear any headlines on cooperation or any strategy from the GCC any more,” says Kamel.

On whether the GGC is committed to diversifying their economies away from oil dependency, he says, “there was serious committment towards having some sort of fiscal rebalancing process across the GCC that maintained the balance between the Gulf economies.”

However, Kamel believes that “you have to expect some delays, some structural problems because these states have not really introduced any complicated form of taxation at anytime. At this stage, we get a state-centric approach and some states move forward quite quick, but others feel compelled to put them on the sidelines. I think in the Qatar case, we’ll probably see some delays because of the economic and political crisis with the GCC, so it would be more prudent to delay that and its a likely direction.”

Also on this episode of Counting the Cost:

The plastic economy: This week, the world’s top decision-making body on the environment, the UN Environment Assembly, passed a resolution on zero tolerance to plastic pollution in the ocean. But it’s non-binding, so the onus falls on individual citizens across the globe to make it happen. Catherine Soi reports from the summit in Nairobi.

SMS anniversary: It has been 25 years since the world’s first text message was sent. And that’s something to talk about, given the way the humble SMS has evolved into an entire messaging industry, as Paul Brennan explains.

Peace diamonds: The diamond trade currently still relies on paper-based certification, but that’s changing. De Beers, the world’s largest supplier of diamonds, says it wants to use something called ‘blockchain technology’ to provide a traceable record for its gemstones. The platform will trace the diamonds’ route through the value chain, from mine to consumer. Gabriel Elizondo reports from New York.