GULF COOPERATION COUNCIL: PROGRESS TOWARD INTEGRATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00096R000200230001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 27, 2016
• Document Release Date: May 9, 2011
• Sequence Number: 1
• Publication Date: May 1, 1986
• Content Type: REPORT

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Directorate of
Intelligence
Integration
Progress Toward
Gulf Cooperation Council:
Secret
Secret
NESA 86-10024
May 1986
362
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Secret
NESA 86-10024
May 1986
Directorate of Secret
Intelligence
Integration
Progress Toward
Gulf Cooperation Council:
Directorate of Operations.
This paper was prepared b Office
of Near Eastern and South Asian Analysis, with a
contribution from Office of
Central Reference. It was coordinated with the
Comments and queries are welcome and may be
directed to the Chief, Persian Gulf Division, NESA,
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Summary
Information available
as of 17 February 1986
was used in this report.
Integration
Gulf Cooperation Council:
Progress Toward
revenues, and concerned about threats from Iran and Iraq.
The Gulf Cooperation Council (GCC) has taken noteworthy steps to
advance Gulf Arab integration in the five years since it was created. The
Council serves as a forum for the six member states-Saudi Arabia,
Kuwait, the United Arab Emirates, Bahrain, Qatar, and Oman-to
address common interests and problems. All are conservative regimes with
close ties to the West, undergoing rapid economic changes financed by oil
depend on US forces in the event of an external military attack.
A strong, successful GCC offers the United States opportunities for
substantial political and commercial gains. It strengthens and gives self-
confidence to the vulnerable, conservative regimes of the Gulf and
increases the influence of a moderate, basically pro-Western bloc in Arab
and Islamic forums. Although GCC leaders fear that an overly close
relationship with the United States is a liability, the Council ultimately will
movement of capital and labor between member states.
The GCC's most significant achievements have been in the economic
sphere. It has established a framework for increased commercial ties, taken
steps to link the transportation and communication networks of the
member states, and begun testing its strength as an international economic
entity. The Council has established a common external tariff and exempted
certain goods produced by member states from internal trade barriers. It
also has implemented policies designed to eliminate obstacles to the free
rapid deployment force consisting of units from each member state,
The Council has also made progress in defense and internal security
cooperation. It periodically holds joint military maneuvers, has assembled a
It also has discussed joint air defense, arms manufacture, and
States-against Iran.
Recent Iranian threats against Kuwait and Saudi Arabia have stimulated
greater cooperation among the Gulf states on military and security issues.
If the Iranians attack Kuwait, the Council probably will deploy the GCC
force to Kuwait. Although this force is more a symbol of Gulf political co-
operation than a significant military factor, deploying it would demon-
strate Gulf unity. Council members also would hope to convince Tehran
that Iran cannot divide the GCC and that an attack on any of its members
would increase the likelihood of outside help-possibly from the United
Secret
NESA 86-10024
May 1986
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The GCC has not responded as a body to the collapse in oil prices.
Although member states have cooperated in seeking ways to respond to the
economic challenges of declining oil revenues, they have not used the GCC
forum to unite against other oil producers. The GCC states do not want to
relinquish national control over their oil policies, nor do they want to be
perceived by Tehran as taking united action in the oil market that hurts
Iran.
The Council's cooperative efforts have reached a plateau, and further
dramatic progress is not likely. The next steps will run into the hard
realities of conflicting political interests. The GCC is unlikely to realize
such aspirations as political integration, coordination of economic develop-
ment and monetary policies, and agreement on a common military
procurement policy.
The greatest obstacles facing the GCC are political. Each state is
suspicious of the actions and intentions of the others, creating tensions-
not likely to abate over the next several years-that inhibit cooperative
efforts. Although they recognize the benefits of cooperation, the Gulf Arab
leaders fear a loss of personal power and national sovereignty. The smaller
states are particularly wary of Saudi attempts to dominate them and resent
Riyadh's efforts to use the GCC to advance its own goals.
GCC member states are aware of the Council's shortcomings but are
generally satisfied with the organization. They are comfortable taking a
low-key approach and pushing forward only in those areas where they
believe that progress can be easily made. The smaller states enjoy the
increased prestige in international circles afforded by the GCC mantle.
Riyadh finds it convenient to use the Council to push its own agenda on
economic and security issues. Although the smaller Gulf states are
beginning to act more aggressively to protect their individual interests, they
still tacitly acknowledge Riyadh's preeminence in the Gulf and look to the
Saudis on key political and economic issues. The Saudis will continue to
play a dominant role in the Council and to use the GCC to increase Saudi
influence in the Gulf and in the Arab world.
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Economic Cooperation
Internal Security Cooperation
Political Cooperation
Implications for the United States 15
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Figure 1
Gulf Cooperation Council Members
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*Riyadh Abu
Cuff of Oinan
Muscat
Boundary representation Is
not necessarily authoritative.
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Gulf Cooperation Council:
Progress Toward
Integration
The Gulf Cooperation Council (GCC) was created in
May 1981 by Saudi Arabia, Kuwait, United Arab
Emirates (UAE), Bahrain, Qatar, and Oman. The
impetus for its formation was the Iran-Iraq war,
which was eight months old when the Council was
formed. The war gave the GCC states the opportunity
to increase formal cooperation without including ei-
ther Iraq or Iran-traditional rivals for dominance in
the Gulf. Moreover, it allowed the Saudis, who have
long sought to control the smaller Gulf states, to push
for the establishment of a regional organization it
hoped to dominate.
The Council was to be a multilateral institution
broadening already existing bilateral cooperation, ac-
cording to the GCC charter. The basic goals of the
GCC as stipulated in its charter are:
? To strengthen and broaden cooperation between
states.
? To formulate similar regulations in economic, com-
mercial, educational, social, health, and administra-
tive affairs.
? To stimulate progress in the fields of industry,
agriculture, water, and animal resources.
? To implement common projects.
Abdallah Bishara, a Kuwaiti diplomat, has been
Secretary General since the GCC's inception. Riyadh
is the site of the Council's headquarters
In our judgment, the Gulf states have been most
successful in dealing with economic issues. Each of
the states has a relatively small population and an
economy that produces only a limited range of goods
in addition to petroleum products. As a result, they
must cooperate to facilitate the development of capi-
tal-intensive projects that can both expand and diver-
sify output. Moreover, a regional program for devel-
oping regional transportation and communications
would increase efficiency and diversify sources of
income. United action by the Gulf states makes it
possible for them to obtain better terms from their
trading partners.
One of the Council's first acts in June 1981 was to
draw up an agreement outlining broad goals for
economic integration among the member states. It
called for the:
? Abolition of customs duties on intra-GCC trade and
application of a common external tariff.
? Coordination of commercial policies and creation of
common negotiating positions on economic matters.
? Free movement of citizens and capital.
? Coordination of development policies, including oil
and industrial policy.
? Establishment of a common investment policy and
coordination of monetary policies, including a com-
mon currency.
So far, GCC economic activity has focused on the
establishment of a common market. The goals it is
pursuing are small, practical steps rather than grandi-
ose schemes.
The Council's most significant economic achievement
has been the implementation of a common external
tariff and elimination of tariffs between the member
states on goods meeting specific criteria. Lifting
internal tariff barriers promotes the freer flow of
goods, increasing the efficiency of trade among mem-
ber states. Under the Unified Economic Agreement,
all "national" agricultural, animal, industrial, and
natural resource products of member states are ex-
empt from duties. To be considered as national prod-
ucts, the value added from production in member
states must be at least 40 percent of their final value.
The GCC also has begun implementing a common
external tariff that encourages members to function
as a trade bloc, increasing their international bargain-
ing strength. It has set a minimum external tariff of 4
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Figure 2
Gulf Cooperation Council
Supreme Council
(Chiefs of State)
Commission for
Settlement Disputes
Ministerial Council
(Foreign Ministers)
Specialized and
Technical
Committees
Secretary General
(Abdallah Bishara)
Office of
Secretary General
? Headquarters
security
? Protocol
Political Affairs
Information
Economic Affairs
Finance and
Legal Affairs
Man and
? Arab relations
? Computers
? Industrya
Administration
? Legislative
Environment
? International
? Documents
? Energy
? Personnel
and judicial
? Cultural affairs
relations
and library
? Trade and
? Finance
establishments
? Social affairs
? Information
finance
? Services
? Treaties
? Human
? Security
? Transportation,
? Lawsuits and
resources
communication,
verdicts
? Education
and agriculture
?.Jurisdiction
? Public health
and research
a Economic section reorganized in December 1982; each unit to be headed
by Deputy Assistant Secretary General.
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Table I
Gulf Cooperation Council Member States' Objectives
General Expectations
and Objectives
Saudi Arabia Expectations modest; main objec-
tive is greater security through co-
operation; increased Saudi influ-
ence aim of some Saudi leaders;
others emphasize importance of
Saudi generosity to other members
as way of achieving GCC goals
Ambivalent about GCC; sees polit-
ical and economic advantages, but
uncomfortable with what it per-
ceives as Saudi tendency to domi-
nate GCC at both Secretariat in
Riyadh and in GCC forums
Enthusiastic supporter of GCC; be-
lieves it derives many benefits from
GCC; wants Council to evolve
steadily, especially in defense and
security fields
United Arab Emirates The seven emirates' objectives are
uncoordinated; with varying de-
grees of self-interest, hope GCC
continues to provide political, eco-
nomic, and security benefits
Sees GCC as providing protective
coloring, allowing Qatar to express
itself on sensitive foreign policy is-
sues; emphasizes importance of po-
litical consultation among GCC
members
Sees interests well served, particu-
larly in GCC commitment to col-
lective defense
GCC security interests important Has used GCC as mechanism
consideration; wants sufficient to help make difficult decisions
equipment compatibility to facili- on domestic economic issues,
tate joint role; wants to project for example, tariffs, fuel prices,
image of united front to Iran utility rates; uses GCC to in-
crease worldwide access for its
petrochemicals
Leading benefit is assistance for Ready to work closely with
Oman's military ($I.8 billion over GCC partners on many techni-
12 years), but wants to limit partic- cal issues; realizes GCC states
ipation in regional defense coopera- have greater leverage by work-
tion ing together
GCC is second line of defense; mili- GCC serves as umbrella for aid;
tary cooperation gives Bahrain economic cooperation holds out
chance to turn to other neighbors chance for more regional devel-
for assistance, rather than to Saudi opment than Bahrain could at-
Arabia alone tract by itself.
Some emirates leery of closely co- Supports free movement of pco-
ordinated GCC military programs; pie and goods but not capital;
others more disposed if foreign several emirates also resist
command of GCC force on UAE GCC tariffs and actions that
soil is avoided ignore long-established trade
and service role of Dubayy and
Ash Shariqah
Believes GCC can enhance own Sees GCC states as possible
military efforts; particularly inter- market for natural gas re-
ested in coordinating air defense in sources; also looking at possibil-
GCC ity of GCC gas grid
Favors interoperability over stan- Wants economic integration
dardization of weapons that will increase investment
opportunities in other GCC
states and defend Kuwait's eco-
nomic interests internationally
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percent, reducing some of the problems caused by
varying individual rates. A Saudi trader, for example,
can no longer import goods into Saudi Arabia and
then profit by reexporting them to a neighboring Gulf
state whose external tariff is higher. Member states
are allowed to specify foodstuffs and essential com-
modities that may enter duty free-48 percent of
Saudi import categories, for example, are exempt
from tariffs. Higher rates can be charged on some
goods to protect local industries, according to press
reports.
Of almost equal significance, the GCC has begun to
test its strength as an international economic entity,
and it is pushing for trade and economic agreements
with Western states. GCC leaders are pushing for a
broad agreement with the European Community,
encompassing trade, technical cooperation, and tech-
nology transfer, according to Embassy reporting. The
GCC has also held exploratory talks with the United
States, and GCC Secretary General Bishara ap-
proached the Japanese for similar exploratory talks,
according to the US Embassy in Riyadh.
The Council has begun to dismantle barriers to the
free movement of capital and labor among the GCC
states. GCC nationals may travel to other member
states without visas, and unified passports will be
issued in 1986, according to press reports. Members of
several professions-medicine, law, engineering, and
accounting-are licensed to practice in any of the
GCC states. GCC citizens may also make investments
in other member states. Commerce and financial
services-the major nonoil economic activities in
these states-are not included, however, and invest-
ment by nonnationals is restricted to 25 percent of
equity. Real estate, if used for the residence of a GCC
national, can be owned in any of the GCC states, with
certain restrictions.
The GCC has considered various plans involving the
establishment of a common investment policy, but so
far little has been accomplished. The states estab-
lished the Gulf Investment Corporation (GIC) in 1982
to finance projects and fund investments both within
and outside the Gulf. It was to be capitalized at $2.1
billion with equal contributions by member states, but
paid-in capital totals only $420 million, according to
US Embassy sources. A profit-oriented company, the
GIC has not yet invested in any GCC project. Instead,
it has spread its investments abroad, acquiring equity
interests in foreign corn anies with links to GCC
states.
The Council has discussed plans to link transporta-
tion, communication, and energy networks of the
member states, but these ideas have yet to be embod-
ied in formal proposals. Interest is periodically ex-
pressed in the development of a GCC pipeline to
circumvent the Strait of Hormuz, establishment of a
regional gas grid, standardization of petroleum prices
in domestic markets, and construction of a GCC
railroad, but little progress has been made, according
to the press. The Council has unified telegraph, post,
telephone, electricity, and water rates and is consider-
ing standardization of port fees and the development
of a GCC transportation company.
To facilitate progress on commercial cooperation,
numerous meetings of economic officials have been
held to enable technocrats from the member states to
become familiar with each other. At least 600 minis-
terial and subministerial meetings were held in 1985,
according to the US Embassy in Doha. The range of
topics under consideration is impressive. Officials are
discussing health, education, and social welfare issues,
such as standardization of school curriculums, unifi-
cation of social security statutes, and regulation of
employment of the handicapped, according to press
reports. The Council has already begun joint procure-
ment of pharmaceuticals, computers, veterinary medi-
cines, and other commodities. Cooperation in environ-
mental protection, resource management, and
agricultural production methods is also being consid-
ered, and cultural exchanges and sports competitions
are being planned, according to press reports. In
addition, the cornerstone of the Arabian Gulf Univer-
sity-an institution open to students from all GCC
states-was laid in Bahrain in 1984, and construction
is under way.
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The GCC as a Negotiating Force:
Pushing Petrochemicals
The GCC-led by Saudi Arabia-is seeking to nego-
tiate trade agreements to increase worldwide access
for its petrochemical production. Riyadh is attempt-
ing to play offdeveloped country importers against
one another and is using the GCC as leverage. West
European producers are increasingly concerned about
the prospect of a flood of low-cost Gulf petrochemi-
cals entering their markets. The situation worsened
in 1984 when the Saudis began to cut petrochemical
prices to gain a larger market share and circumvent
OPEC price guidelines, which do not cover petroleum
products. In June 1984, responding to growing protec-
tionist pressure, the European Community (EC) im-
posed a 13.4 percent tariff on Saudi methanol ex-
ports, straining relations with the GCC. Methanol is
one of the main raw materials used to produce other
chemicals. Tensions eased somewhat following trade
talks between the parties in March 1985, but they
flared again in August when the EC imposed a 14-
percent tariff on imports of Saudi polyethylene, which
is used to produce a variety of products including
plastic bags, wraps, and bottles. Despite its anger at
the imposition of the new tariff, the GCC reached an
accord with the EC at a meeting in October. Under
the agreement, the EC would advise the GCC when
tariff action on a GCC export was imminent. A
subsequent dispute arose involving Saudi exports of
monoethylene glycol, and the EC and GCC are
holding extensive discussions to find a solution to the
slow progress in its talks with the West Europeans.
Council members hope that these talks will result in
an overall trade agreement, and some GCC officials
have pushed for negotiation of a free trade area
similar to that arranged between the United States
and Israel in early 1985. Preliminary talks with the
United States were held in December. Although the
GCC delegation hoped to establish quickly a joint
procedure to deal with economic issues, their objec-
tives are still ill defined. Talks with the Japanese are
still in the preliminary stages.
The GCC's lack of success in negotiating increased
access for its petrochemical exports in the United
States, Western Europe, and Japan has led it to
approach China and the USSR, hoping to gain access
to those markets.
problem.
In spring 1985 the GCC began to press for explor-
atory economic talks with the United States and
Japan, probably because of disappointment over the
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Figure 3
US Trade Balance With Gulf Cooperation Council, 1982-85
? 1982
1983
1984
1985
Saudi
Arabia
GCC leaders also had economic reasons for military
cooperation. The small military forces of the six
countries could avoid redundancy in their defense
programs, standardize their equipment, and centralize
manpower training. In addition, lower costs could be
achieved in joint equipment purchasing and manufac-
Although military cooperation is not explicitly dis-
cussed in the GCC charter, in our judgment the
threat from Iran, and, to a lesser extent Iraq, was a
major impetus behind the formation of the Council.
We believe the leaders of the GCC states recognized
their vulnerability and feared that the Iran-Iraq war
would spread. Iran's airstrike against a gas-oil sepa-
rating plant in Kuwait in October 1981 and its role in
a coup attempt in Bahrain two months later height-
ened their fears. By combining their efforts, the GCC
states probably hoped their collective defenses would
help deter an Iranian attack.
turing.
In January 1982, GCC defense ministers met in
Riyadh to discuss their goals and strategies for a Gulf
regional defense. They agreed in principle to the
formation of a joint rapid deployment force drawn
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Table 2
Combined Force Development of GCC Member States
Combat aircraft and combat- 107 160
capable trainers
from the armed forces of the member states that
would intervene when a member state is threatened.
According to Arab press reports, the ministers cited
the Arab League Charter, which stipulates that an
attack on one member constitutes an attack on all, as
justification for the GCC force. The members also
called for the establishment of a collective air defense,
formation of a common arms procurement policy, and
the establishment of a joint arms manufacturing
industry.
To upgrade the defensive capabilities of each GCC
member, the Council established a 12-year, $4-billion
fund to provide technological and financial aid to
Oman and Bahrain-the poorest members of the
GCC. Saudi Arabia and Kuwait have maintained
their annual payments to this fund, while declining oil
revenues have caused the UAE and Qatar to fall
behind, according to US diplomats in Jiddah.
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Table 3
Composition of GCC Rapid
Deployment Force
Unit
Country
Estimated
Strength
20th Mechanized Brigade
Saudi Arabia
2,500-3,000
GCC Brigade
Infantry battalion
Kuwait
500-750
Infantry company
Bahrain
200-300
Infantry company
Qatar
200-300
Infantry company
UAE
200-300
In November 1984 the member states approved the
establishment of the rapid deployment force that the
defense ministers had proposed in January 1982. The
force was to be based at King Khalid Military City at
The smaller states reluctantly agreed to participate in
the force, and last September GCC members began to
deploy troops to the Saudi base at Hafar al Batin,
near the kingdom's borders with Iraq and Kuwait.
The force consists of two infantry brigades-one
Saudi and one composed of small infantry units from
the other five states-according to press reports. Brig.
Gen. Turki Haijan, commander of the Saudi brigade,
was named commander of the force. The troops will
Saudi Arabia has pushed for implementation of a
five-stage plan to integrate GCC air defenses. Al-
though the plan was never formally approved by the
GCC, the Council has worked on implementing stages
one through three:
? Stage 1. Bare bones:
- Agreement on the types of equipment
needed.
- Financial and technical assistance to
poorer Council members.
? Stage 2. Jointly developed system:
- Compatible interlinked equipment.
- Data sharing.
? Stage 3. Jointly developed air defense network
with central operations center:
- States retain own command authority,
and each state has own command center,
interceptors, and surface-to-air missile
systems.
- Each state responsible for own sector.
- Jointly manned central control center
for threat evaluation with authority to
advise on commitment of national
forces.
? Stage 4. NATO model:
- Structured as in stage 3.
- Control center has command authority
over regional and sector air defense
forces.
? Stage 5. Total integration offorces.
annual joint military exercises since October 1983.
The military exercises, named Peninsula Shield, pri-
marily are field training exercises for ground forces,
and contingents from all six states have participated.
The GCC states have held numerous joint naval and
air exercises as well, according to press reports.
The GCC has also begun work on establishing a
regional air defense system. Under the plan, each
state is to improve its own air defense system and to
purchase equipment compatible with the other states.
Despite the obstacles it faces, the Council has begun
joint military exercises to familiarize the forces of the
member states with each other. Members have held
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The air defense systems of the individual states are
then to be linked to a GCC-wide integrated air
defense command and controls stem.
Some member states have begun upgrading their air
defense capabilities under the first phase of the plan.
Last fall, Saudi Arabia awarded a $1.2 billion con-
tract to a consortium of US companies to supply a
command and control system, including radar and
tactical communications gear, according to press re-
ports. The UAE is proceeding with the deployment of
US-made radars and air defense missiles. Kuwait and
Oman have also purchased radar systems in accor-
dance with the plan, but Bahrain and Qatar have yet
to make any progress.
GCC defense ministers are still in the preliminary
stages of planning a joint arms industry. GCC army
chiefs of staff discussed prospects for light and medi-
um arms industries at a meeting last October, accord-
ing to the Saudi
Arabia has taken the lead in this field, and a number
of military industry corporations have been formed in
the kingdom, according to Saudi Defense Minister
Sultan
press reports.
The Gulf states cooperated informally on internal
security issues for several years before the formation
of the GCC, and more formal joint efforts were one of
the original goals of the Council. The GCC states
hoped that integration of their internal security pro-
grams would improve the security of each state as well
as the security of the region, according to Western
Following the Iranian-supported coup attempt in Bah-
rain in 1981, Council members became increasingly
concerned about the growing Shia threat and agreed
to cooperate more closely, according to the US Em-
bassy in Kuwait. They signed bilateral security agree-
ments with each other in 1982 covering exchanges of
police information, regulation of border procedures,
and extradition of criminals. Saudi Interior Minister
Nayif also used the concern generated by the aborted
coup to persuade GCC members to consider a broader
agreement. GCC interior ministers ordered a security
review in 1982, and, on the basis of their findings, the
Council drew up a draft security agreement for
consideration at the third GCC summit meeting in
Manama in November 1982. The agreement detailed
methods to control subversive and criminal activity.
The member states were to:
? Exchange information and expertise on subversives.
? Deny refuge to opponents of a member regime and
prohibit the circulation of pamphlets opposed to the
ruling regimes in any of the member states.
? Unify regulations dealing with emigration, pass-
ports, residency, and nationality.
? Combat infiltration and smuggling, permit extradi-
tion under certain circumstances, and allow "hot
pursuit" of fugitives up to 20 kilometers into a
neighboring state.
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This GCC-wide security pact was not ratified because
Kuwait refused to sign. GCC officials have tried
unsuccessfully during the past three years to change
the language of the document to gain Kuwait's ap-
proval, according to the US Embassy in Riyadh. The
pact has encountered stiff opposition in Kuwait's
National Assembly, which has refused to ratify it.
Kuwaiti officials claim that its provisions are incom-
patible with the state's constitution and laws. Kuwait
is concerned about the complex provisions for extradi-
tion and the 20-kilometer "hot pursuit" clause that
could place Saudi security forces well within populat-
ed Kuwaiti areas, according to the US Embassy in
Kuwait. It fears that Riyadh would use these provi-
sions as a pretext for interfering in Kuwaiti internal
affairs.
The member states also have begun to standardize
security regulations to curtail the flow of illegal
workers and subversives, according to press reports.
Member states have agreed to have the same color,
size, and shape passports, with similar data and
background information contained in them. They also
have standardized visas and vehicle registration.
GCC members have become increasingly con-
cerned-for security, economic, and social reasons-
about the large numbers of expatriate workers in their
countries. Council officials have called for a cut in
foreign labor by as much as 25 percent in the next five
years but have yet to take action. Foreign workers
make up more than half the work force in some Gulf
states.
are jeopardized.
Council officials have considered other security issues
as well. They have recommended the establishment of
food and petroleum reserves to meet local demand in
case of a supply disruption. In October 1985 the oil
ministers agreed to create a 45-day strategic oil
reserve in each GCC state, according to press reports.
They also vowed to ensure emergency oil supplies to
members whose oil production or export installations
Political Cooperation
political bloc.
Political cooperation was not stipulated in the GCC
charter, and the Council has made the least progress
in this sphere. Member states view the organization as
a useful forum to coordinate their regional and inter-
national policies, however, thereby enhancing their
influence, according to US Embassy reporting. GCC
leaders meet regularly but have no set agenda for
political cooperation. They use the Council to address
issues of immediate concern to member states and
strive to present a common front on important politi-
cal issues, lending the GCC the appearance of a
Fundamental disagreements between some member
states hinder consensus, which is essential for the
Council to be politically effective. The GCC has been
unable, for example, to reach a common stand on
relations with the USSR, Egypt, and Iran. Some of
the GCC states-the UAE, for example-have rela-
tively good relations with Iran, while Kuwait regular-
ly feels threatened by it. Although discussion of issues
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at the meetings of GCC leaders has undoubtedly
influenced the views of individual states on particular
issues, members have conspicuously backed away
from taking stands on controversial issues.
The GCC also has no agenda for internal political
cooperation. Although some border disputes between
members have been resolved, such solutions owe little
to the Council's efforts. Still, the annual summit
meetings provide a forum for GCC leaders to air their
differences.
The GCC has made substantial progress toward
integration in the five years since it was organized.
We believe that the Council's efforts have reached a
plateau, however, because the relatively easy steps
have been taken, and those remaining will be harder
to tackle. It has yet to consider seriously coordination
of development policies or monetary and banking
policy, including a common currency. Other goals-
including a security agreement, standardization of
military equipment, and integration of military forces
under a central command-have been discussed, but,
because of financial and political constraints, we
believe they are years away from resolution
Mutual suspicions are the most serious obstacle to
more effective GCC integration, in our judgment.. The
states profess pan-Arab sentiments, but each distrusts
the actions and intentions of the others, creating
tensions that thwart cooperative efforts. They also are
reluctant to surrender national sovereignty, especially
during periods of domestic stress.
We believe that the smaller Gulf states continue to
fear Saudi attempts to dominate them. They look to
the Saudis for leadership on political issues demand-
ing Arab consensus, international economic issues,
and defense. They also acknowledge that the Saudis
have the key role as protector of the Gulf, especially
when the Iran-Iraq war flares up, but, in our judg-
ment, they are worried about the potential for Saudi
hegemony. Several of the states have unresolved
border disputes with the Saudis and are concerned
over what they see as Saudi expansionism. They
resent what they see as Riyadh's attempts to use the
GCC to advance its own goals at their expense.
Although the Saudis are the driving force behind
most GCC initiatives, the smaller states are showing
signs of resisting what they consider to be Riyadh's
heavyhanded tactics.
Because the rulers of the GCC states have been
unwilling to relinquish significant power, it has been
difficult for the Council to develop effective adminis-
trative, legal, or political mechanisms. Decisionmak-
ing is through consensus, which has proved to be
cumbersome and time consuming. Although the
Council Secretariat makes recommendations, its pro-
posals must be ratified by each of the six heads of
state during the annual GCC summit meeting. The
Secretariat is charged with implementing GCC poli-
cy, but it is small, bureaucratic, and detached from
the key policymakers of each state and has neither the
manpower nor the authority to put new policies into
practice. Its many committees meet regularly but
more often agree on rhetoric than on clearly defined
policies and strategies for action.
The Council has made the greatest progress on its
economic agenda, but even in this area members
continue to compete with each other and hesitate to
compromise national interests. The regional recession
has contributed to increased tension among member
states and a survival-of-the-fittest atmosphere that
hinders cooperation. Moreover, the dependence of
each country on oil has increased the sense of compe-
tition among GCC members. Members try to under-
cut each other's prices to expand output and increase
revenues in the belief that these measures will ensure
the stability of their regimes. Under these circum-
stances, close coordination on prices or production
would appear to be difficult at best.
The recession has caused GCC leaders to agree only
to those economic initiatives that directly serve their
interests. Most planned projects are too expensive to
implement during a period of regional economic aus-
terity, and member states are finding it difficult to
justify large outlays for GCC projects at a time of
domestic spending cutbacks, particularly if other
GCC members are perceived to be reaping the bene-
fits.
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Gulf Rulers'
Views of the Gulf Cooperation Council
such as tariffs and fuel prices.
King Fahd
Saudi Arabia. Probably views Council as means of exercising influence over
smaller members ... strong proponent of Council rapid deployment force and
close ties to United States ... against the expansion of ties to USSR ... uses
Council as mechanism to adopt unpopular decisions on domestic economic issues,
force, opposition to Iran, or oil policy guidelines.
Sultan Qaboos
Oman. Sees Council as useful lever for access to US officials and as paymaster
for military purchases ... worries that stronger Saudi economy and military will
threaten Omani independence ... reluctant to cooperate on rapid deployment
States similar to Bahrain's longstanding ties.
Amir Isa
Bahrain. An enthusiastic supporter of Council ... views it as mechanism for
delaying responses, avoiding commitments, and deflecting criticism on controver-
sial issues ... hopes other Council rulers will eventually form links to United
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wt...:'.
r, -,-.
Amir Jabir al-Ahmad
Kuwait. Believes Kuwait's interests are well served in Council because it enhances
Kuwait's defense capabilities without compromising nonalignment ... hopes
Council's economic integration will increase investment opportunities ... usually
urges colleagues to normalize relations with Moscow.
President Zayid
United Arab Emirates. Wants political clout Council provides, probably worries
his fragile federation will be overwhelmed by members with greater military,
financial strength ... particularly interested in trade issues, increased cooperation
on security
Amir Khalifa
Qatar. Likes security Council provides ... relatively comfortable with Saudi
hegemony ... hopes for greater security, intelligence cooperation.
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GCC Secretary General Abdallah Bishara
Abdallah Ya`qub Bishara, initially reluctant to be-
come the first secretary general of the GCC, accord-
ing to US Embassy officers in Kuwait, now appears to
be enthusiastic about and proud of the Council and
its activities. GCC coworkers and Kuwaiti Govern-
ment officials credit him with most of the progress in
the organization's development. They also consider
him the impetus behind increased coordination within
the Secretariat and among the GCC member states.
Bishara's reelection to a second three-year term
underscores the high regard in which leaders of the
GCC's member states hold him. His ability toformu-
late GCC policies, however, is limited by the organi-
zation's charter. Policy decisions are made by the
Gulf Supreme Council, composed of heads of the
GCC member states.
leeway in formulating his country's policy on issues
that came before the organization. His finely devel-
oped diplomatic skills have served him well in head-
ing an organization composed of members with di-
verse interests. Bishara has stated in public and
private interviews, and Embassy officials agree, that
he employs a low-key approach to reach consensus.
He is not easily discouraged during the extended
negotiations to coordinate political and economic
policies.
Despite his commitment to the GCC, we believe
Bishara is first and foremost a Kuwaiti nationalist.
According to Embassy officials, Bishara is a protege
of Kuwaiti Minister of Foreign Affairs Sabah al-
Ahmad al-Jabir Al Sabah. Bishara tends to stress
those issues of most concern to the Kuwaiti Govern-
ment: military preparedness against Iran, pursuit of a
nonaligned foreign policy, and establishment of com-
mon policies concerning internal security.
Bishara is known for his independent and outspoken
viewpoints on Kuwaiti and Gulf policies. According to
US Embassy officials, it is not always clear whether
his public statements concerning GCC activities are
made in his official capacity as GCC Secretary
General or are his personal opinions. These officials
also comment that Bishara sometimes gives deliber-
ately vague or misleading statements.
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Bishara brings to his role 10 years of diplomatic
experience as Kuwait's permanent representative to
the United Nations. While there he had considerable
Conflicts between the GCC states and external obsta-
cles, including the regional recession, will block
broader integration among member states. Despite
their problems, GCC members are generally satisfied
with the progress of the organization and will contin-
ue to work toward achieving its goals, according to the
US Embassy in Riyadh. They are comfortable taking
a low-key approach and pushing ahead only in those
We believe that the GCC will continue to take small,
practical steps over the next five years, especially in
the field of commerce. The Council probably will
standardize labor regulations and set policies on expa-
triate labor, working to reduce the number of foreign-
ers in the member states. As oil revenues tighten
finances in the member states, they are likely to
increase cooperation in the fields of health, education,
areas where progress can be made.
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and agricultural policy. They will also proceed with
plans for common industrial legislation and develop-
ment and probably will develop strategic food and
petroleum reserves.
We expect the Council to make progress toward
greater security and military cooperation. Such pro-
gress will be intermittent and limited, however, and
probably will be spurred by crises in the area. Al-
though the tight finances of member states will limit
the Council's ability to increase equipment purchases,
we believe that
additional military exercises will occur. We also be-
lieve that development of a joint arms industry will
begin in the next few years.
The prolonged stalemate in the Iran-Iraq war has long
afforded the Council the luxury of planning further
military cooperation without having to act. Iran's
recent successes, however, have heightened the Coun-
cil's concern about an Iranian attack on Kuwait. This
would test the GCC's commitment to action. So far,
the GCC states have tried to demonstrate Gulf unity
by publicly renewing their commitment to aid Kuwait
in case of attack. If such an attack were to occur, the
Council is likely to deploy the GCC force. GCC
members probably realize that Iranian forces could
quickly overwhelm their small and poorly organized
force-the GCC force has never trained together,
holds different equipment, and has command and
control problems. Nonetheless, deployment of the
GCC force would demonstrate Council solidarity and
would increase the possibility of outside military help.
The GCC probably hopes this will help to deter an
Iranian attack
The member states will continue their efforts to
project the GCC as a strong, forward-looking, cohe-
sive organization and to raise the Council's profile
regionally and internationally. The smaller states
enjoy the increased visibility and access offered by the
GCC, and Riyadh will continue to use the Council to
push its own agenda. The Council will aggressively
seek economic agreements with its major Western
trading partners and will probably seek a greater role
in regional political affairs.
Implications for the United States
A viable GCC advances US interests because it
strengthens and gives self-confidence to these vulnera-
ble, conservative regimes, which control 45 percent of
the world's proven oil reserves. To the degree it
increases the influence of a moderate, basically pro-
Western bloc in Arab and Islamic forums, the GCC
tends to further the regional goals of the United
States
Nonetheless, the Council is concerned that too close a
relationship with the United States will undermine its
position both regionally and domestically, and it will
maintain some distance from Washington on most
important issues, such as the Arab-Israeli conflict, the
Palestinian issue, and strategic cooperation with the
United States. Still, the GCC states have sought US
assistance in developing their military forces and will
ultimately depend on the United States in a crisis.
The continued development of the GCC will affect
US relations with its individual members as well as
with the Council itself. Through the GCC, the smaller
states will play a larger role in shaping Arab positions
on issues of concern to Washington-relations with
the USSR, for example-than they would alone. The
existence of the GCC will require the United States to
approach the Council as a collective body on various
issues, particularly economic, rather than deal with its
individual members. Moreover, the Gulf Arabs will
increasingly avoid taking positions on difficult issues
until a GCC consensus can be reached.
A successful GCC will offer the United States further
security and commercial opportunities. The estab-
lished security relationships that the United States
has with individual Council members have the poten-
tial to be broadened to a GCC-wide relationship.
Because the GCC will need compatible equipment for
its air defense system and the United States already
has been awarded many of the contracts for the Saudi
program, US firms will be in a good position to bid on
air defense contracts in other member states
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