Oman: No Gulf-wide union for us

Leaders from the six oil-rich states that make up the Gulf Cooperation Council (GCC) agreed in their annual meeting last week to take it slow regarding a proposal on becoming a union.

The proposal, first put forth two years ago by Saudi Arabia’s King Abdullah, comes as Iran’s President Hassan Rouhani, pursues a more moderate foreign policy and detente with the West.

Yet the plan for a union – and the degree of political, economic or military integration it would entail – remains vague. When GCC General Secretary Abdellatif al-Zayani was asked for more details, he responded that “it is all still under discussion”.

The proposal to form a union, presented as a key topic at the GCC summit in Kuwait, lost steam after a blunt rejection by Oman. Nevertheless, according to the final communique put together by the GCC’s six member countries – Kuwait, Saudi Arabia, Oman, Bahrain, Qatar and the United Arab Emirates – it was agreed that “the ministerial council resume deliberations about the Saudi proposal”. Saudi Arabia’s former intelligence chief, Prince Turki bin Faisal, said Oman’s position would not stop the union from being formed.

While some observers have deemed the summit a failure – noting that no major decisions were made – others say it was successful given the absence of a bigger fight between Saudi Arabia, the GCC’s biggest economy, and the much less influential Oman.

A few days before the summit, Omani Foreign Minister Youssef bin Alawi bin Abdullah said his country opposes establishing a union and would pull out of the bloc if other members went ahead with the proposal. Speaking at a conference in Bahrain, Abdullah’s comments came shortly after Saudi Foreign Minister Nizar Madani described the union as “no longer a luxury” but a strategic necessity.

Union in trouble

“The GCC union may be in trouble,” said Theodore Karasik, a security and political affairs analyst at the Dubai-based Institute for Near East and Gulf Military Analysis. “The union is being threatened by Iran’s proactive policy towards several GCC states and such moves harm the basis of the union’s evolving foundation.”

The GCC was established in 1981 to face the threat of a rising Shiite republic in nearby Iran. Similarly, the idea of a Gulf union was formulated as a way to counter risks threatening the GCC’s mostly Sunni monarchies, such as the Arab Spring uprisings and al-Qaeda’s infiltration in neighbouring countries such as Iraq and Yemen.

But the chessboard has changed since 1981, putting King Abdullah’s dream in jeopardy. While Saudi Arabia remains the powerhouse, its smaller sisters have adopted diverging foreign policies, some of which have outraged the kingdom.

For instance, while Saudi Arabia, Kuwait and the United Arab Emirates refrained from backing Egypt until its Islamist president, Mohamed Morsi, was ousted, Qatar was a staunch backer of Morsi and his Muslim Brotherhood-dominated government. And while Saudi Arabia and Bahrain have accused Iran of inciting unrest among Shia Muslims in the Gulf, and the UAE claims Iran is occupying three islands that it owns, Kuwait, Qatar and Oman have maintained amiable ties with Tehran.

“In a regional political environment that is shifting quickly, the UAE, Qatar, Kuwait and Oman are keen to retain as much flexibility as possible without undermining core alliances within the GCC,” said James Fallon, a Dubai-based analyst at Control Risks.

But although Kuwait and the UAE share concerns about Saudi Arabia’s dominance in the region, quiet Oman was the most forceful opponent of the union.

Outlier

“Oman has always been an outlier of the organisation due to the sultanate’s geographical position on the Arabian Peninsula, history, the views of the sultan himself and religion,” said Karasik, referring to the predominant Ibadi form of Islam practiced in Oman, which is neither Sunni nor Shia.

Karasik added that Oman, which hosted talks between US and Iranian diplomats leading to the November 24 pact in Geneva, did not want to join a union in order “to remain independent from a fracturing GCC as a result of Iran’s new prowess”.

The United Arab Emirates, where about 400,000 Iranians live; and Kuwait, where about 30 pecent of its population is Shia, have previously voiced similar reservations on joining a union with Saudi Arabia, possibly in fear of being dominated by the bigger kingdom.

“Differences of opinion exist but this flexibility is built into the GCC structure,” said Abdulaziz Sager, the chairman of the Gulf Research Centre. “While there are objections even to further integration, no one has called for the GCC to be disbanded.”

The six nations – which control about 40 percent of the world’s oil reserves – have previously failed to reach consensus on a unified currency. Progress on a customs union, common market, and railway networks linking member states have also been slow.

Accordingly, trade ties between the Gulf states are fairly weak. Although intra-GCC trade has grown tenfold since the organisation’s establishment, according to a 2011 report by consulting firm Booz and Company, it has never exceeded 10 percent of the region’s total trade.

This is less than blocs like ASEAN and EU-15 which generate 23 percent and 57 percent, respectively, of their overall trade from within the region.

Aside from aiming to preserve their autonomy, Gulf states opposed to the union may also be hoping to “benefit economically from a resurgence of Iran’s participation in global markets”, Fallon said.

Unified military command

Although participants at the summit failed to agree on several points, they did agree to form a unified military command to further bolster the Peninsula Shield, a joint GCC military force that was used to stifle the uprising in Bahrain in 2011.

“The only rudimentary basis of the union can be found in the military sphere,” said Karasik. “But even in this sector challenges remain in interoperability of forces in complex multilateral air operations. Sensitive military information sharing remains elusive.”

The monarchies have historically relied on the US for their broader security. Chuck Hagel, the US defence secretary, has toured the region seeking to reassure allies that increasing US domestic oil production and the detente with Iran will not harm their interests. 

With little known about Saudi’s vision for the union, it is unclear how it would propel economic, military and social integration. Some analysts think Oman may reconsider when more details become known.

“At this stage, the exact aspects of the union project remain to be discussed, so it is too early to suggest that we will have a GCC of different speeds,” said Sager, who mentioned the United Arab Emirates as an example of a union – the country is composed of seven emirates each with their own ruler – whose members did not all join at once.

Karasik proposed a different scenario. Suggesting that Iran may be using its warming ties with the West to “exploit cleavages in and between the GCC states”. He said he expected the union discussion to reemerge in a few months if Iran fails to adhere to the interim agreement.

Follow Dahlia Kholaif on Twitter: @Dee_Kholaif