Recently, I have been reading news stories that ministers in the GCC region are looking to adopt a system that allows their nationals and residents to move jobs and work freely without the need for extensive approvals or entry permits at the borders. While this might not look like a big deal at first glance, I have no doubt that in the final analysis it will be considered one of the most landmark achievements to be secured by our six-member bloc since it was created in 1981.
One of the chief concerns that policymakers in the Gulf are wrestling with is the question of how free movement of migrant workers across the GCC borders will adversely impact the nationalisation efforts of member states. The concern is entirely valid. However, it can easily be resolved by implementing a system of legislations and checks designed to actively counter any misuse of privileges.
When all is said and done, I believe that unhindered travel of both citizens and residents within the GCC region will be in complete harmony with the vision of the GCC’s founders. Since its establishment, the council has launched several significant initiatives and achieved political and military milestones, such as the Peninsula Shield Force, in addition to economic achievements that have strengthened the area’s commercial status.
Despite all these efforts, the economic cooperation and integration of the GCC has been fairly limited. This is partly because all six GCC states have economies that are predominantly based, not on trade with each other, but on trade with the rest of the world. International trade in the GCC’s key assets – oil and gas - have led to the dilution of strong ties between the neighbours, with each trying to compete with the others for international business.
The example of the European Union, the politico-economic combine of 28 member states, has often been upheld as a good model for the GCC countries to follow. The European Union has worked cohesively to enhance the status and performance of many vital sectors, including tourism, commerce, industry, and agriculture. These sectors have flourished and developed to become globally competitive. We can also draw lessons from other case studies such as the Association of South East Asian Nations (Asean), the East African Community, and the Union of South American Nations in order to facilitate the implementation and establishment of a tangible economic union.
When comparing the economic landscapes of the GCC and Europe, we find that the European market has primarily been successful because it was built on economic pillars rather than on political ones. The EU has managed to fairly advance the integration of economic activity between member states, while ensuring full sovereignty for the states to implement their own decisions and initiatives at a national level. The foundation of the GCC, on the other hand, rests mainly on political pillars, and the achievement of economic goals is relegated to second place. This strategy has, to date, made it more difficult for member states to reach their goal of economic integration.
Within the region, there has been little progress in creating laws that would give all citizens the right to own land and equity in the GCC market. Similarly, no consensus has been reached over a GCC customs union, which continues to affect the smooth flow of commercial goods across our borders, resulting in delays and substantial losses of revenue. On an international level, the GCC has no unified economic strategy in place. Each member state has enacted free trade agreements with other countries that have hindered rather than helped the GCC agenda to form an integrated commercial policy.
In addition, the unavailability of a unified visa system that eases the movement of businessmen and foreign investors, as well as the failure to develop a unified labour market and concurrently an integrated financial and banking system, have proven to be large obstacles that affect the progress of the GCC common market and limit its development.
While progress on such key fronts has not been very encouraging, some member states have adopted a radical approach. For example, in 2009, Bahrain implemented a first-of-its-kind decision when it opted to eliminate restrictions on the movement of migrant workers as specified in the sponsorship system (kafala). Foreign workers are now able to move jobs without the approval of the earlier employer. The step strengthened Bahrain’s status internationally and has been welcomed by human rights organisations, which have consistently encouraged other countries to eliminate similar restrictions and make opportunities available to all.
The GCC has been blessed with steady economic progress all through the 21st century and has been largely shielded from the tumult rocking much of the wider region. Such progress can be jeopardised if any of the six member states drops its guard at this juncture. The region is beset by serious challenges of an extraordinary nature and promoting measures that bring the GCC countries closer is the need of the hour. Given this challenge, the council should work urgently at boosting business and trade between member states, and implementing measures such as the unified visa system with immediate effect.
Mohammed Mahfoodh Al Ardhi is chairman of National Bank of Oman
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