How is the GCC working with the EU to bring about greater economic and trade cooperation?
AL ZAYANI: Cooperation between the GCC and the EU dates back to the early days of the GCC establishment in 1981. The GCC tried to learn from the EU’s experience in regional integration and apply these successes to its own efforts in the Gulf region.
In 1988, the GCC and the EU signed a Cooperation Agreement, which established mechanisms to facilitate greater integration between the two organisations. One such initiative was the GCC-EU Joint Ministerial Council, which continues to meet on an annual basis and is comprised of foreign ministers from the member states of both blocs. The Joint Cooperation Committee currently oversees the implementation of the Cooperation Agreement and is supported by dozens of working groups in fields including political dialogue, energy, trade and investment, education, and the environment, among other areas. There is also a robust economic dialogue between the two organisations, with frequent meetings and close collaboration.
The EU is still the GCC’s top trading partner, but investment flows in both directions are not consistent with the potential for both economic blocs. This is something we hope to improve through closer dialogue and strategic planning.
Given the increased economic weight of Asian economies, to what extent is the GCC recalibrating its focus eastwards?
AL ZAYANI: GCC trade with Asian countries has grown dramatically in recent years, now constituting over half of our overall trade. Trade with China, for example, accounts for more than 11% of all GCC trade, up from 2% around two decades ago. Trade with China, India, Japan and Korea alone accounts for more than 40% of GCC trade. Two-way investments are also growing. The GCC has established trade, investment and business-to-business links, as well as strategic dialogues with leading Asian countries and economic blocs. In addition, there are growing people-to-people contacts through tourism, educational exchange and other cultural contacts. Asia has quickly become one of the most important markets internationally and we are consequently fostering closer relations across a wide spectrum of areas for the benefit of both our regions.
What policy tools are helping to encourage GCC member states to work closer to enhance foreign direct investment (FDI) and economic policy?
AL ZAYANI: There are a number of GCC platforms where policymakers share their experiences and coordinate different policies, whether regarding FDI or more general economic issues. The GCC Economic Agreement has several provisions for fiscal and monetary policy coordination, which are undertaken on a regular basis by the Financial and Economic Cooperation Ministerial Committee, the Central Bank Governors’ Committee, as well as the sub-committees and expert groups emanating from those two committees. FDI policies are coordinated through the Commercial Cooperation Ministerial Committee and its sub-committee, as well as through the implementation of GCC FDI Law.
How will the integration of the various member states’ rail networks into the overall GCC network benefit the region economically?
AL ZAYANI: The GCC Railway Network project, which is now in the final technical design stage, is aimed at linking national railroad networks among member states via a line that travels from Kuwait City through to Muscat. In addition to transporting passengers, enhancing intra-GCC regional trade is one of the main motivations for the GCC railway. Indeed, it will provide another reliable mode of transportation to complement the existing highway network. Facilitating greater intra-regional trade and travel, as well as offering a highly advanced infrastructure system to support trans-shipment facilities, will make the GCC Common Market more attractive for further foreign investment going forward.
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