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Volume 35, Number 1January/February 1984

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A Preliminary Report

Written by John Christie
Photographed by Burnett H. Moody
Additional illustrations by Norman MacDonald

Last November, the heads of state of six of the ArabianGulf countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - met in Qatar to review the progress and plans of the Gulf Cooperation Council (GCC), an organization that bids fair to transform the political and economic face of one of the most important regions in the world

At the gathering, the fourth such summit meeting, Kuwait's Abdullah Bishara, the GCC secretary general, capsuled the organization's potential in his answer to a reporter's question on how the GCC would settle disputes. Happily, he said, that matter is entirely academic - since it has no serious disputes either tabled or expected.

No one would suggest that this level of agreement is likely to be permanent - especially in the troubled Middle East - but some observers believe that hopes for GCC unity are grounded in reality. One, Dr. John Duke Anthony, of the National Council on U.S.-Arab Relations, firmly believes in the future prospects of the council. "Unlike, say, the short-lived United Arab Republic, formed by Egypt and Syria in 1958, or the 1971 effort by Libya, Egypt and Syria to form the Confederation of Arab Republics, the GCC is not based on any ideology"

Another promising element in the GCC approach, Dr. Anthony says, is its pragmatic style. "Unlike some of the previous movements towards Arab unity, the GCC approach is less ambitious, less elaborate. Members have deliberately adopted a conservative and consultative style, and that could make the difference. You can, in fact, discern a pattern in their approach already: first deliberate, then ameliorate."

Dr. Anthony, who has attended all of the four GCC summit conferences, thinks the GCC countries have a "commonality of needs and a homogeneity of experience" which "makes cooperation not just possible but probable."

The GCC, of course, has a long way to go before it catches up with its European counterpart the EEC -European Economic Community or Common Market. Nevertheless, the Gulf Arabs, as this preliminary report suggests, have achieved more - in terms of political, economic and social integration - in their first two-and-a-half years of cooperation than the western Europeans achieved in their first 10. That, perhaps, is the fact to focus on.  —The Editors

A Bridge to Bahrain

Following the 1982 Gulf Cooperation Council (GCC) summit in Bahrain, heads of state of the six member countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - drove in a cavalcade from the capital, Manama, along roads lined with cheering and waving people, to the unveiling of a marble plaque mounted on a massive 25-ton limestone boulder.

Although a simple ceremony, there was no mistaking its historic significance when King Fahd ibn 'Abd al-'Aziz of Saudi Arabia and Shaikh Isa ibn Salman al-Khalifah, the ruler of Bahrain stepped forward to release the black drapes: Bahrain, at least in theory, was no longer an island. The plaque formally commemorated the start of construction of a 25-kilometer causeway (15.5 miles) linking Bahrain to the mainland Arabian Peninsula.

A huge hydraulic engineering project - all work is carried out in the open sea - the causeway, when completed, will consist of five bridge sections, with a combined length of 12.5 kilometers (7.75 miles), andseven embankments, also with a total length of 12.5 kilometers, and carry a four-lane highway between al-Khobar, Saudi Arabia and Bahrain. Although not strictly a GCC project - it is a bilateral Saudi-Bahrain project - the causeway typifies the unifying spirit of the GCC, and was an appropriate climax to the council's third summit.

The first job of the contractors - Ballast Nedam of The Netherlands - was to construct an extension to an island called Umm Nasan, located just off the coast of Bahrain; the extension serves as the site of camps for the 1,500-man workforce, workshops, offices and plants to make 325,000 cubic meters of concrete and shape it into box girders and other elements of construction. Next they built a second, larger island - by dumping rocks in a ring from barges and then filling in the circle with sand sucked up from the seabed by dredgers. This island, located at the mid-point of the causeway, will be the loca tion of the border-posts for immigration and customs.

A total of 552 piles will support the causeway bridges, of which the largest, 40 meters long, 3.5 meters wide (131 feet long and 11 feet wide), will weigh 384 tons. A special pontoon crane transports the piles to various points - where they are positioned in holes up to 16 metres deep (52 feet) drilled into the solid rock layers of the seabed by a unique drill with a bit four meters (12 feet) in diameter. Laser beams and other measuring apparatus aboard a survey platform are used to determine the exact location of the piles. Once a pile has been put in position, the annular space between pile and hole is filled under pressure with thin mortar to anchor it securely.

Because of the presence beneath that part of the Arabian Gulf of a subterranean freshwater reservoir, from which the Bahrainis draw much of their water, pile driving for one of the five bridge sections is not allowed. This bridge section, 934 meters long, (3,064 feet), will rest on 18 caissons, each weighing nearly 1,000 tons; the caissons are sunk into the seabed to a depth of about 10 meters (33 feet).

Causeway work is scheduled for completion by the end of 1985.

The First Steps Forward
Written by John Christie
Illustrated by Norman MacDonald

Some weeks ago in London, Abdullah Bishara, secretary general of the Gulf Cooperation Council (GCC), predicted that "by 1990 a Gulf Common Market will be functioning." This new Common Market - linking GCC members Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), plus, possibly, other neighboring Arab nations - will be based, Bishara said, on economic integration but will also work toward political coordination, defense cooperation, collaboration on internal security, and shared social, cultural and educational programs.

laled to ancient Egyptians tree-year old Mariam Shahla suffered an eye injury as she and her motherAt first blush, the GCC may seem to be just one of 60 official inter-Arab organizations, of every conceivable form and size and involved in nearly every kind of operation and endeavor. Some function under the auspices of the Arab League, others report to several governments. There are regional organizations, bilateral and multilateral groups, professional associations and technical assemblies. Together, their acronyms denote a bewildering array of diverse concerns.

But the GCC, formed in 1981, and a comparative newcomer, already seems different. The council has emerged as possibly the most important, the most significant and the most exciting inter-Arab combination in recent years. "The GCC," says Lord Jelico, chairman of the British Overseas Trade Board, "represents a new and potentially very powerful trading block."

Just how powerful may be seen in some recent figures quoted by Saudi Arabia's Minister of Finance and National Economy at a December seminar at King Sa'ud University in Riyadh. The volume of the Gross Domestic Product (GDP) in the GCC states, he said, has risen to $187 billion, and their total oil reserves are now estimated at 274 billion barrels - 52 percent of the world's oil reserves. Furthermore, he said, the volume of trade in 1981 reached $201 billion - $148 billion for exports, $53 billion for imports.

In just the two-and-a-half years since its formation, the GCC has taken preliminary steps toward eventual removal of all trade barriers among members, and has set up a $2.1 billion fund to finance joint investments. And although most other GCC schemes are what Bishara describes as "still on the drawing board," the recent GCC summit in Doha gave the go-ahead for feasibility studies on several major projects. One is for a Trans-Gulf Railroad running from Kuwait to Muscat and a second is for a gas pipeline network linking GCC states.

The council has agreed - subject to a marketing study proving its viability - to construct an export oil refinery on the Indian Ocean in Oman. It is also actively considering laying a crude oil pipeline outside the Strait of Hormuz, and establishing a Gulf electricity grid. One GCC-related project is the construction of a Gulf University for up to 5,000 students - some of whom have already started their studies in temporary facilities in Bahrain. Still other GCC-related projects include a $101 million aluminum rolling mill, also in Bahrain, and a 25-kilometer causeway (15.5 miles) linking Bahrain island with Saudi Arabia (See page 28).

Long before the GCC was established, its six member countries had already begun to cooperate in many fields, and formal and informal contacts between them were close and constant. Furthermore, various joint bodies had been set up: the Gulf Television Authority, the Arab Gulf News Agency, the Arab Gulf Labor Organisation and the Gulf Organization for Industrial Consulting. But there was no overall coordination of these efforts, and no regional master plan existed. As in the rest of the world, each country tended to formulate and implement its national program and policies on an individual basis with only minor attention given to questions of a wider regional coherence.

The beginnings of cooperation, however, were present and there was a growing recognition of the common interests and shared similarities among the people and states: a common religion and language, systems of government that are largely the same, standards of economic development roughly alike and similar social structures. Most important of all, perhaps, there was a sense of a common culture, mutual values, and a matching outlook. The prime requirement of homogeneity and community already existed.

Not all the considerations that brought the GCC into being were based on the simple premises of kinship and fellow-feeling, of course; such inescapable imperatives as politics and the stern dictates of economics played a large part in its genesis. With the 1971 withdrawal of Britain from the area, for example, some of the newly independent" states realized that, singly, their defensive capacity against external threats was uncomfortably slight. And though the region's oil resources had brought immense wealth to most of the Gulf countries - and enabled an astonishing rate of development to take place - it also brought new pressures and problems to the area, ranging from altered life-styles for the inhabitants to a massive influx of foreign workers. Interstate machinery to deal with these concerns was not merely desired; it was becoming a necessity.

Although it was not so regarded at the time, the first seeds of the GCC were sown in 1967, with what is called the Dubai Agreement, an effort to unite the seven tiny Trucial States with Bahrain and Qatar. And though ultimately Bahrain and Qatar elected to remain outside the proposed union, a new federal state was established as the United Arab Emirates, composed of Abu Dhabi, Dubai, Sharjah, Ajman, Ras al-Khaimah, Fujairah and Umm al-Qaiwain. It was not the first attempt to forge some type of unity among different Arab states, but none had been successful and all were short-lived. The UAE has proved a happy exception and its creation not only set the stage for later developments but also proved that unification need not be a dream.

In 1976, another effort to improve regional coherence was made when Sultan Qaboos bin Sa'id of Oman called together the foreign ministers of the six Arab states of the Gulf-plus Iraq and Iran - to discuss political coordination on regional security matters. The ministers were unable to agree on a common posture and the conference dispersed without further action. But later that same year the Ruler of Kuwait, Shaikl i Jaber al-Ahmad Al Sabah (then prime minister and crown prince) formally proposed establishment of a "Gulf Union," to "realize cooperation in all economic, political, educational and informational fields." As a result, and after exploratory talks with Shaikh Zayed bin Sultan Al Nahyan, president of the UAE, these two countries established a joint "Ministerial Council" of their respective prime ministers, consulted Saudi Arabia, Bahrain, Qatar and Oman - who hailed the idea enthusiastically - and launched a series of meetings and discussions that took place over the following five years.

During this time, conflict in the region lent an added urgency to the deliberations - and to the mutual desire of the six to preserve and ensure the stability of the Arabian Gulf - and so in Riyadh in February, 1981, the foreign ministers of the six countries agreed to the text of the GCC charter. Three months later, on May 25, this was signed by the six heads of state and the Gulf Cooperation Council was born.

Since the terms of the GCC charter are far-reaching and comprehensive, the council faces a formidable program. The council, furthermore, has limited authority since substantative matters require unanimous approval and all the states are on an equal basis. Before the formation of the GCC, most of the member countries were largely, in population and territorial terms, city-states - albeit flourishing and successful ones. Only Saudi Arabia and Oman possess sizeable territories, measured on a world scale, and only Saudi Arabia has a comparatively large population. But, in combination, the six countries add up to a not inconsiderable entity. The GCC states have a land area larger than Europe and a total population of well over 10 million.

Another significant result of the amalgamation is that the GCC stretches the important sea-lanes of the Red Sea - leading to the Suez canal - and the waters of the Gulf, including the vital Strait of Hormuz. The strategic ramifications of this geographical fact are immense, and add a great responsibility as well as advantage to the new council. At peak oil production, more than 40 percent of the non-communist world's oil supplies passes through the Strait of Hormuz. Even today, despite lower production levels, a substantial proportion of world oil trade still passes through the Gulf.

The economic strength of the six, of course, puts them into a financial super-league of their own. All are oil producers, and all have reaped enormous economic rewards from this resource. A large proportion of the income generated by oil production has been plowed back into financing unprecedented development, and each of the countries is being transformed by the building of roads, schools, hospitals, new cities, power networks and new industries (See Aramco World, November-December 1982). Not only is the scale of development astonishing but the pace itself is breathtaking. At the height of the building boom, the merchant ships of the world queued up outside every port on the peninsula, waiting to unload cargoes of cement, steel, timber and machinery for which there was an insatiable demand.

But even with this prodigious spending on development and the cost of the sweeping welfare programs instituted in all the states, the flow of oil income has created huge surpluses for still further investment. Whatever other deficiencies and shortcomings the GCC might have, a shortage of money is not one of them. Possessed of land, population and natural wealth, the six nations indeed seem to lack nothing to make their joint enterprise successful - except, possibly, military strength. Though each of the countries have armed forces, some equipped with advanced weapons, the numbers each stat£ can muster are comparatively small.

The GCC's basic structure consists of a supreme council, a ministerial council and a secretariat. Its highest authority, the Supreme Council, is composed of the heads of state and it lays down guidelines for the higher policy of the GCC. The Ministerial Council, engine room of the GCC, generates proposals, recommendations and projects to further the common aim of cooperation and coordination. The Ministerial Council is made up, usually, of the foreign ministers, although other delegated ministers can be appointed. The Secretariat, headquartered in Riyadh, has, in addition to the expected administrative functions, substantial responsibilities in the GCC scheme of things. It initiates and undertakes studies in fields of actual and potential areas of cooperation and drafts the legislation required to translate the agreed GCC policies into action.

Since its formation, the GCC has established a host of specialized committees which work out the technical details of coordination and integration in different fields. They cover politics, economics, finance, commerce, industry, defense, oil and energy, housing, construction, ports, communications, information, medicine and even sport. This requires access to a vast amount of data and statistics, and the GCC Secretariat is fast becoming the repository of a wealth of detailed economic and social information on the six member states. In the process, and almost in passing, the secretariat is accumulating a store of historial records of inestimable value. The work of these specialized committees, usually at a working level of directors general of, for instance, posts and telegraphs, civil aviation, or labor affairs, is fed into ad hoc meetings of the ministers concerned. There, the suggestions and proposals in the specialized fields are hammered into shape before being channeled to the Ministerial Council.

The first thrust of the GCC has been in the field of economic integration and it is here that the greatest and quickest progress has been made. One of the GCC's basic decisions was to agree on a blue-print for the complete economic integration of the region. The Unified Economic Agreement, approved by the six heads of state in June, 1981, could prove as historic a document as the Treaty of Rome which laid the foundations of the European Economic Community (EEC). The GCC agreement is designed to lead to the establishment of an Arab Gulf Common Market, creating a new - and significant - body in the international economic scene.

The GCC agreement also allows for free trade among the member states, with the right of nationals to live and work anywhere in the region - with complete equality of rights of ownership, movement of capital and freedom to follow any economic activity. Even future development is covered, with stipulations for the member states to coordinate their industrial activities, standardize import and export policies and establish a uniform customs tariff.

Most important of all, perhaps, the six nations have agreed to try and formulate a coordinated oil policy and present a common position on oil to the outside world, including, possibly, some degree of coordination in production through refining to marketing.

Before the sharp 1982 decline in exports began, the figure for the combined oil production of the six countries was close to 14 million barrels a day. Translated into straight economic terms - and crude oil sales account for roughly 90 percent of their revenues - the six countries' exports world-wide amounted to around $148 billion in 1981, while their import bill came to nearly $53 billion in the same year. It is small wonder the GCC's initial emphasis haabeen on the economic front.

Another measure of their mutual financial strength is indicated by the council's decision to establish a Gulf Investment Corporation with an authorized capital of $2.1 billion. Made up with equal contributions by each state, the fund can engage in any financial and economic activity it chooses. Significantly, it's operations are not limited to the region itself but can be undertaken anywhere in the world. Since much of the construction in the member countries is well on the way to completion, it could be difficult for them to absorb all the potential investment the Gulf Investment Corporation represents. It may, therefore, not be long before the corporation makes its investment presence felt on the international scene.

The implementation of the first stage of the Unified Economic Agreement began last March. Now, as a result, all natural, agricultural and industrial resources can be moved freely among the member states, free of customs duties and taxes. Effectively, the national borders of the states have been abolished for industry, agriculture, fishing and a wide range of business ventures. Already, joint business ventures between different nationals are being undertaken; theoretically, lawyers, doctors, engineers and other professionals can practice where they wish in the GCC area.

The next stages in economic unification are already under way and the states are working on the coordination of their financial, monetary and banking practices. The eventual aim is to have a single, common currency for the region. The formal words of the GCC Charter are rapidly being translated into the substance of fact, and the political concept is taking tangible form.

Not all the concerns of the GCC are directed inwardly to the affairs of its component parts. Last year, existing contacts with Europe were expanded and talks were opened with the European Economic Community. So far, discussions have concentrated on ways of developing closer political ties between the two regions. An EEC delegation has visited the GCC's headquarters in Riyadh and Secretary General Bishara toured Europe to explain to European governments and officials the aims and objectives of the GCC. Next, a GCC delegation is to visit ECC headquarters in Brussels to discuss the future of Gulf exports - particularly petrochemicals - to Europe. These contacts are to be followed by negotiations to organize common project financing in developing countries, the initiative towards a joint partnership in project financing came, it may be noted, from the GCC. The Arab oil-states are already a major source of aid to developing countries and a common approach with the EEC, also a key contributor, could transform the nature and scope of international project financing.

In a message marking the second anniversary of the formation of the GCC, Bishara said the council was moving along five tracks. The first is political coordination, from which stem the foreign policies of the organization. By general consensus, the GCC adopts a strictly non-aligned position in international affairs. Together with the Gulf Arab countries' close and intimate involvement in the affairs of the Arab world at large, these are the keystones of the GCC's external outlook. The self-reliant nature of the GCC is emphasized and the responsibility of the member states - to ensure the stability and security of the Gulf, including navigation - is firmly stressed.

The council's second track, said Bishara, is economic integration. He described this as the "backbone" of the GCC's activity and, certainly, this is the fundamental basis of GCC moves in other fields of cooperation. Yousef Shirawi, Bahrain's Minister of Development, has predicted that over the next five years the GCC would unify its economic infrastructure in preparation for the creation of a Gulf Arab Common Market modelled on the European Economic Community.

Defense cooperation, the third track, is, admittedly, one of the more complicated and difficult of the problems with which the GCC has to deal. As Bishara said in his message, "Non-alignment rings hollow if it is not coupled with an instrument for its assurance and protection." The defense ministers of the Six (who meet regularly and frequently), therefore, are introducing various measures of rationalization and coordination in defense matters.

In October last year, the first joint military exercises of the Six were held in Abu Dhabi. Entitled "Peninsula Shield", the manouvers marked the practical beginnings of a regional coordinated defense system. GCC officials admit there is a long road to travel before the Gulf states possess a fully integrated defence capacity, but they are well satisfied with the initial steps.

The fourth track involves internal security and finally, the fifth, is the social, cultural and educational goals. In this, the GCC is careful to talk about "approximation" rather than coordination; the council has no intention of trying to obliterate the individual and different national characteristics among the member states. As the GCC appreciates, distinct local and indigenous qualities must be respected. A Jibali hill-tribesman from Oman is a very different man from his cosmopolitan cousin in an office tower-block in Kuwait, while a Qatari fisherman from Doha has little in common with either. Sensibly, the diversity within the region is regarded as a source of strength and richness: an essential leavening. Nevertheless, substantial cooperation can be achieved, especially in the field of education. Rationalization of administrative and financial matters in education and formulation of compatible - but not identical - curriculi are all being pursued by the GCC. The Arabian Gulf University project in Bahrain, for example, will, when completed, provide a natural focus of higher education in the region. Construction work is due to begin next Spring on this ambitious project.

What, though, is the ultimate objective of the GCC? The charter does not define the precise intended shape of the six nation grouping and, perhaps wisely, has not detailed an eventual limit to the kind or degree of cooperation between them. Yousef Shirawi, of Bahrain, told his London audience a year ago that the GCC is "not open for further membership at the moment." But he did not rule out the possibility that other states could one day be invited to join the GCC, indeed he specifically mentioned Yemen and Iraq as potential candidates.

Bishara thinks the concensus is for a federation - meaning anything from a loose association of countries to a tightly-knit organization.

It is far too early to even guess what form such a confederation might take - if it comes about at all. But the GCC is already a powerful and significant combination and, whatever its destined frame, offers exciting prospects for the future. Already the day of the inconsiderable principality and the minor shaikhdom in the Gulf is past. Indeed the GCC epitomizes the irrevocable changes that have shaken the region and demonstrates not only the countries' willingness to embrace an ambitious vision, but also the ability to transform the vision into reality.

A Summit in Doha
Photographed by Burnett H. Moody

At the summit: In Qatar last fall the heads of state of the six GCC members met to assess the organization's progress and plans. Among them ... King Fahd of Saudi Arabia. Foreign Minister Prince Sa'ud al-Faisal and Minister of Petroleum and Mineral Resources Shaikh Zaki Yamani.

A Trans-Gulf Railroad?

Among the decisions taken at the fourth Gulf Cooperation Council (GCC) summit meeting in Doha, in November, was approval for the GCC to go ahead with detailed feasibility studies on a project which could have far reaching effects and implications for the whole Gulf region: construction of a railway network to link the GCC's six member states.

Though their air transport is highly advanced, and their roads and highways stand comparison with any country's, most Gulf states skipped the railroad era entirely. But now that the GCC countries have set out on the path to industrial integration and rationalization, a GCC railway network has some obvious attractions. As the industrial sector expands, an efficient and cost-effective bulk transportation system could be a key element in the economics of development - a crucial link between raw materials, production and markets - and railway enthusiasts maintain that a network of railroads is the best system possible.

As long ago as 1978, five countries - Saudi Arabia, Iraq, Kuwait, Qatar and the United Arab Emirates (UAE) - reached an agreement in principle to construct a railway line along the coast of the Gulf to join with Iraq's existing railway to Turkey and thus complete a Gulf-Europe railroad. For various reasons, the idea did not progress beyond the discussion stage, but the idea persisted and, with the formation of the GCC, interest has been revived. Where a railway might not have been economically viable for an individual state, the proposition improves considerably when the needs and requirements of all six nations are taken into account.

Compared to road transport, which presently moves the major part of interstate trade within the GCC, railways begin to reduce bulk transportation costs with distances of 50 kilometers or more (31 miles) and, with modern high-speed trains, reduce travel time dramatically.

The new feasibility study, to be carried out by British rail consultants, will consider a railway from Kuwait south to Doha in Qatar, Dammam in Saudi Arabia, Abu Dhabi in the U. A.E. and on to Muscat in the Sultanate of Oman. Such a railway line offers the possibility of other connections to Bahrain - once the causeway from the mainland is completed - to the smaller Emirates of the UAE, and to the existing Dam-mam-Riyadh railway in Saudi Arabia; if needed, a subsequent enlargement of such a network could include extensions to Jiddah and a northward link from Kuwait to Iraq's railway system. GCC states would then have a rail system linking the Gulf to the Indian Ocean, the Red Sea coast and Western Europe.

With major industrial plants in the region, expected to come into production within the next few years - especially in Saudi Arabia (See Aramco World, November-December 1982) - a Trans-Gulf Railroad would be invaluable, since these industries will be export-oriented, and Western Europe will be one of their major target markets. A rail link which could carry the peninsula's exports to, say, Istanbul in Turkey in a fraction of the time sea shipment would take has easily calculated advantages.

Among the GCC states themselves, a greater mobility of people is also expected as economic integration increases. In this respect, some estimated journey times on a modern high-speed, air-conditioned train suggest a comfortable and time-saving means of travel. From Kuwait City to Dammam in Saudi Arabia: three hours and 33 minutes; from Abu Dhabi to Dubai less than one hour; from Dubai to Muscat a mere three and a half hours. Compared with the present alternatives of road and air transport, an inter-city rail link offers a highly attractive alternative to the Gulf traveler.

In the swift pace of their modernization, the GCC countries moved in one step, so to speak, from camel caravan to jet aircraft. Railroads were, somehow, largely left out in the process. Now though, if economic and other questions are satisfactorily answered, the GCC may rectify the omission. In keeping with its imaginative beginnings, the GCC is not likely to be deterred by the scale and scope of such a project. And, to both the hard-headed and the romantic, a possible Trans-Gulf Railroad has an eminently satisfying sound to it.

This article appeared on pages 22-33 of the January/February 1984 print edition of Saudi Aramco World.


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