Gulf states' cooperation quest falters
The GCC will struggle in 2019 to resolve the many issues that divide it and threaten its survival
Nothing points up the frailty of the Gulf Cooperation Council (GCC) more than the Qatar crisis. When Saudi Arabia, the UAE and Bahrain imposed an economic and diplomatic blockade on Qatar in June 2017 — accusing it, among other things, of supporting terrorism — they undermined the foundations of the regional grouping. For not only did three Gulf states turn on a fourth, but the other two GCC members, Kuwait and Oman, declined to support the action against Qatar. The fault lines ran in differing directions.
Getting all six leaders together in one room is proving impossible. At the 2017 summit in Kuwait, the host, Shaikh Sabah al-Ahmad al-Sabah, and the Emir of Qatar, Shaikh Tamim bin Hamad Al Thani, were the only two heads of state in attendance. The meeting was cut short by a day. The most recent summit, in Riyadh in December 2018, went ahead with Shaikh Tamim absent and with the Qatar crisis not even appearing on the agenda.
The Qatari ruler paid a brief visit to Kuwait in February this year — ostensibly to present a national football team shirt to Shaikh Sabah to thank him for congratulating the team on its success in the Asian Cup. Qatar put the UAE's nose out of joint by winning the final against Japan — in Abu Dhabi, of all places. It had previously knocked the Emiratis out of the tournament in the semi-finals. But the two emirs also discussed the crisis that is tearing the GCC apart. Kuwait has tried on several occasions to mediate in the dispute.
But Kuwait is having to tread delicately in this mission. For, along with Oman, it has incurred the displeasure of Saudi Arabia and the UAE by failing to support the policy of isolating Qatar. After the departure of Shaikh Tamim from Kuwait, the emir sent a personal envoy to Saudi Arabia with a message for King Salman — no doubt to reassure him that Kuwait is still stopping short of taking Qatar's side in the dispute. Kuwait and Oman are aware that they could become targets of a Saudi-UAE blockade if they show too much sympathy for Qatar.
500,000bl/d —potential Neutral Zone output
As if to underline their annoyance with the Kuwaitis and Omanis, Saudi Arabia and the UAE in December 2017 announced the formation of a joint political and military alliance. This created yet another axis that flouts the spirit of the GCC charter.
All the while, the GCC as an institution has done nothing to try to end the Qatar crisis, damaging its credibility and proving yet again that individual Gulf states are more powerful than the organisation created to bind them. Under the founding charter, a commission for settling disputes was supposed to have been attached to the supreme council (composed of the six heads of state). But no such body is seeking to bring the opposing parties together.
Nor is there a sign that either party in the dispute is ready to compromise. The Saudis and their allies continue to accuse Qatar of supporting terrorism, while the Qataris retort that their sovereignty is under attack. The two sides are engaged in a squalid and personalised media campaign of mutual accusations. Finding a way out has never looked harder. Anwar Gargash, the UAE's minister of state for foreign affairs, tweeted in January that "the boycott of Qatar is continuing in 2019 because it is linked to changes that are necessary in Doha's destructive orientations".
"The prospects for resolving the Gulf dispute any time soon seem fairly poor," says Ian Black, visiting fellow at the London School of Economics (LSE) Middle East Centre. "Qatari officials sound pretty confident that they can continue to withstand the blockade, while there is little sign of movement from the Emiratis or the Saudis. The Qataris continue to emphasise their wish for strong links with Turkey and Iran — which is not acceptable to the Saudis and their allies," he adds.
Intra-Gulf tensions also spill over into the energy sector. Since mid-2015, Saudi Arabia and Kuwait have received no oil from the offshore Khafji field and onshore Wafra. Both are located in the Neutral Zone between the two countries where sovereignty and oil production are shared evenly. Wafra is operated jointly by the Kuwait Gulf Oil Company and Saudi Arabian Chevron. The Saudis cited environmental concerns for the shut-down of Khafji.
Kuwait then objected to Saudi Arabia unilaterally renewing the Chevron licence. In response, it refused to allow Chevron access to the field through Kuwait, forcing the company to stop production. The issue has appeared close to resolution on several occasions. But the dispute remains unresolved, with potential production of 500,000bl/d — divided evenly between Kuwait and Saudi Arabia — shut in. With Saudi Arabia leading OPEC+ efforts to reduce output to bolster oil prices, the kingdom appears to be in no hurry to see the Khafji and Wafra taps reopened.
Crown Prince Mohammed bin Salman visited Kuwait in September 2018 but talks on the issue ended acrimoniously. While energy officials on both sides insist that the dispute is in no way influenced by the Qatar crisis, differences between Saudi Arabia and Kuwait over the blockade are not conducive to negotiations over the Neutral Zone fields.
Differences among GCC member states are also hampering joint cooperation over a range of energy issues. Qatar, in late 2018, announced its intention to leave Opec. It insisted that its decision was not related to the blockade but to a desire to focus maximum attention on its gas output. But few were convinced by this explanation. Qatar plans to raise LNG output from the current 77mn t/yr to 110mn t/yr by 2024.
At the same time, Saudi Arabia is seeking to invest in major upstream gas projects outside the kingdom, with the aim eventually of importing LNG. How much more logical it would be for Saudi Arabia and Qatar to cooperate over gas supply. Clearly this is not going to happen.
On the other hand, counter-intuitively, despite the bad atmosphere between Qatar and the UAE, the Dolphin pipeline continues to carry Qatari gas to the Emirates and Oman.
The scope for further cooperation, if the political atmosphere was better, is enormous. For example, most of the Gulf states are moving towards a greater use of renewables, with considerable progress made in the UAE and Oman. Yet all the initiatives are country-focussed, rather benefitting from the regional exchange of ideas and information.
Cross-border electricity supply is another example. Laura el-Katiri, in an Insight Research and Analysis report for the Emirates Diplomatic Academy, points out that the idea of an "interconnected grid across the GCC emerged as a concept as early as 1981" when the organisation was first set up. While studies were undertaken, "attention and politico-economic priorities shifted away from electricity trade during the 1980s and 1990s, but the idea of systematic cooperation over electricity resurfaced during the 2000s".
Getting all six leaders together in one room is proving impossible
Katiri makes the point, too, that "intensifying electricity trade between GCC members remains a potent tool in fostering regional peace and collaboration". As with so many issues relating to the GCC, the theory is good, but putting it into practice is another matter. In the current climate, it is hard to see much scope for expanded cross-border cooperation on anything.
The focus of Saudi Arabia and the UAE is on containing Iran's regional ambitions, whether it be in Yemen or elsewhere, and defeating political Islam in the form of the Muslim Brotherhood. Qatar was seen as standing in the way of these ambitions and, with the support of President Donald Trump, was made to pay by being isolated from the other states in the GCC. The decision of Kuwait and Oman to distance themselves from Qatar's policy and the war in Yemen undermined the credibility of the GCC still more.
Against this background it is hard to see the GCC regaining the cohesive feel it appeared to have in those optimistic days back in the early 1980s. In the view of Rai al-Youm editor Abdel-Bari Atwan, the GCC is going the same way as the Arab League, formed with high hopes, but made powerless by endless internal squabbles.
"The future of the GCC looks pretty bleak, to judge by its last two summits in Kuwait and Riyadh," says the LSE's Black. "On the one hand you have the Saudis, the UAE and Bahrain, with Kuwait and Oman ostensibly neutral, but clearly bracketed with the Qataris by the other three."
Black adds that one should manage expectations when it comes to speculating whether or not the GCC can ride the current series of crises. A body that was set up "to promote regional unity, economic integration and collective security seems to have been virtually destroyed by the increasingly divergent interests and orientations of its own members".
With Saudi Arabia and the UAE coordinating bilaterally, "the role of the GCC has diminished to the point of irrelevance, whether it survives formally or not", says Black. The 1981 charter looks more like a museum item than a working document.
A three-decades journey
The GCC's foundations were laid in 1981. A decade earlier, the Arab Gulf states lost the UK's military protection when British forces withdrew. In the wake of the 1979 overthrow of the shah of Iran and the promise of the country's new leaders to export the Islamic revolution to neighbouring countries, the six Arab Gulf states decided that agreement on formal cooperation was in their best interests.
With a strong incentive to make it work, the signs looked promising. The founding charter pointed to "the ties of special relations, common characteristics and similar systems founded on the creed of Islam" binding the six countries. It then stated the GCC's principle goal: to "effect coordination, integration and inter-connection between member states in all fields in order to achieve unity between them".
In the wider Middle East, the creation of the GCC was applauded. The promotion of coordination and unity among Arab states had hitherto met with scant success. A union between Egypt and Syria in 1958 ended in mutual acrimony in 1961. Efforts to achieve unity among the Arab North African states never even reached the start line. "The GCC appeared to be a cohesive grouping, certainly the most cohesive that the Arab world had seen. Things looked hopeful in the early days," says Abdel-Bari Atwan, editor of London-based Arab news service Rai al-Youm.
Elusive monetary union
Coordination eventually netted some significant successes, notably the creation of a customs union and a joint GCC market. But the goal of monetary union, a step that would have bound the six economies together like no other, has remained beyond reach. Oman announced in 2007 that its own economy would not be able to meet the required targets and withdrew from the scheme. Two years later the UAE also pulled out, unhappy at the rejection of its demand that Abu Dhabi should be the location of the GCC's central bank, rather than the Saudi capital, Riyadh.
The failure to achieve monetary union pointed to an underlying flaw in the GCC. Despite declarations of solidarity and promises to achieve greater integration, the desire to maintain the sovereignty of individual states outweighs their commitment to the central project. This became clear in the aftermath of a GCC summit in Riyadh in December 2011. King Abdullah of Saudi Arabia had urged all members to "move from a phase of cooperation to a phase of union within a single entity". His suggestion was received politely, but without great enthusiasm. No one responded with suggestions of direct action to achieve this goal, and Oman said openly that it wanted no part in it.
Such differences over the years tended to be papered over by the pomp and ceremony of GCC summits, high in rhetoric but low in agreement on concrete measures to achieve the goals set out in the 1981 charter. But the Qatar crisis means that no amount of verbal camouflage can hide fundamental differences in outlook within the GCC.