Most recently, UAE Minister of Foreign Affairs H.H Sheikh Abdullah Bin Zayed Al-Nahyan stressed the need to have joint economic system to create one economic bloc and look forward to make economic achievements by next year in GCC while addressing to the opening ceremony of the 117th ministerial meeting held ahead of the 31st GCC Summit scheduled in Abu Dhabi between 6th and 7th December. Sheikh Abdullah Bin Zayed Al-Nahyan is of the opinion that complicated geo-political and geo-strategic trends are emerging in the Arab Gulf which needs rigorous consultation, communication and coordination among the GCC.
Economic Agenda of the 31th GCC Summit
At the time of its formation the leadership the GCC leaders was behind the success of the GCC economic bloc which aims to achieve economic integration. The first step was the establishment of the customs union, to be followed by the creation of the GCC common Market.
(a) Preparation of a comprehensive long-term GCC development strategy for GCC (2010-2025)
(b) Recommendations on free trade negotiations with other countries and economic blocs
(c) Formation of one customs union
(d) Unified urban strategy, a disasters centre
(e) Media strategy
Political Considerations of GCC Ministerial Meetings
(a) Palestinian issue
(b) Iranian occupation of the UAE’s three islands, the Tunbs and Abu Musa and its peaceful settlement through direct negotiations or the International Court of Justice
(c) Geo-political and geo-strategic developments in Lebanon, Iraq, Sudan and Somalia.
Abu Dhabi will host the regular parliamentary gathering in December 2010 ahead of the 31st GCC Summit. The meeting will review a report on the progress of the joint GCC march and discuss the annual coordination plan for parliamentary and diplomatic engagements at international forums.
GCC Marco-Economy Projections in 2010
According to IMF, World Bank and IIF following an overall growth rate of less than 1 per cent in 2009, the real GDP of the GCC region is expected to increase by 4.1 per cent in 2010 and 4.6 per cent in 2011. Despite pressures from rising global non-fuel commodity prices, particularly food prices, average 2010 inflation in the region is projected at around 3.5 per cent in 2010 and 4.2 per cent in 2011. The consolidated current account surplus of GCC countries is projected to increase from US$62 billion (Dh228 billion) in 2009 to US$119 billion in 2010 and US$134 billion in 2011. The IIF (2010) projects the region’s gross foreign assets to reach to US$1.7 trillion by the end of 2011. So, all the macro-economic indicators of the GCC region is strong and stable.
Selected Economic Indicators 2009
Country GDP $ trillion GDP per capita Resident population Labour force
million Oil reserves (bn. Barrels) Oil consumption (barrels per day) Gas reveres (trillion cubic m) Gas consumption (bn. Cubic meter per year)
UAE 0.2 $40,000 4.8 (86 % expatriates) 3.3 97.8 0.4 million 61 43.1
Saudi Arabia 0.6 $20,700 28.6 (20 % expatriates) 6.7 266.8 10.0 million 7.2 37.0
Kuwait 0.2 $57,400 2.7 (48% expatriates) 2.2 104.0 0.3 million 1.6 12.5
Qatar 0.1 $103,500 0.8 (80% expatriates) 1.1 15.2 0.1 million 25.6 20.1
Oman 0.1 $20,200 3.4 (17% expatriates) 0.9 5.5 0.1 million 0.1 11.0
Bahrain >0.1 $37,200 0.7 (32% expatriates) 0.5 0.1 >0.1 million 0.1 11.3
Source: Different issues of IMF, WB and Organization for Economic Co-operation and Development
GCC Macro-Economy Strength (2010)
(a) National income averaged 19 percent growth in the past four years on sharply higher oil and non-oil activity, public spending and domestic confidence
(b) Current account and fiscal surpluses of 26 percent and 17 percent of 2006 GDP respectively, and likely to rise further if high oil prices are sustained.
(c) Despite massive spending on projects, GCC governments added almost US$500 billion to net foreign assets.
(d) Investment boom with US$1.25 trillion in planned public and private projects will continue to propel growth of the private sector.
(e) Purchasing power sharply higher as per capita GDP averages 15 percent annual growth over four years despite rising inflationary pressures.
(f) The GCC countries are preparing to pour between US$10bn (Dh36.72bn) and $25bn into light and heavy rail to modernize urban centers and battle road congestion.
(g) Telecommunications companies from the GCC region have stormed into international markets, doing business in 78 countries today compared with just six in 2004. The expansion spree has extended the footprint of Gulf operators from Morocco to Indonesia, covering most of Africa and the subcontinent in the process and competing with global giants such as the Vodafone Group of the UK and France Telecom.
United Arab Emirates Leading Position in GCC
United Arab Emirates has leading position in the Cooperation Council for the Arab States of the Gulf. From pure economy to tourism, political harmony to social development, foreign direct investments to mega infrastructure, cultural affinity to better law and order situation and the last but not the least anti human trafficking to labour market reforms, UAE is second to none in the GCC region.
(a) UAE has the highest literacy rate in the GCC region
(b) It has lowest child mortality in the region
(c) It has biggest clean drinking water plant
(d) It possess tallest building, biggest airport and largest Cargo terminal too
(e) The air trafficking in UAE is highest
(f) Cumulative FDI flow into the UAE totaled around US$73.4 billion, nearly 26 per cent of the combined foreign capital received by the six-nation Gulf Cooperation Council (GCC).
(g) Most innovation driven economy in the region
(h) Most prosperous country in GCC
(i) Technological acceptability and adoptability is the highest in the region
(j) The trade between the UAE and GCC countries reached its peak i.e. Dh64.3 billion in 2008. The UAE’s trade exchange with GCC countries increased by 88 per cent from the period (2003-2006), compared to the period from 1999-2002 which shows its leading position in the GCC region
(k) UAE consumer confidence is the highest in the GCC region 2010
(l) The UAE has most advanced railways communication in the region and it has planned heavy rail network running from Abu Dhabi to Fujairah will eventually become part of the 2,000km GCC network expected to open in 2017. The network will run from Kuwait City through Saudi Arabia, Bahrain, Qatar and the UAE before terminating in Oman, or possibly Yemen.
(m) According to many IMF, IIF and World Bank reports the banking sector of the GCC banks had remained resilient during the recent global financial crisis. In the 2006-2008 period, almost all GCC banking institutions charted year-on-year double-digit growth in their financing portfolios. According to latest ranking Emirates NBD is top on the list with assets as at the end of 2009 US 76.7 billion dollars, National Commercial Bank of Saudi Arabia is on the second position with assets of US 68. 6 billion dollars and National Bank of Abu Dhabi is on the third place with US 53.6 billion dollars assets during the same period.
(n) The UAE has moved up nine places to win the top spot among the Arab Gulf countries in gender equality according to a World Economic Forum report (2010) on gender gaps. The labour force participation rate for women improved in the UAE federation, the wage gap between men and women narrowed, and the proportion of women in ministerial posts rose.
Gulf Common Market
Recently, the Gulf Common Market (GCM) Committee met in Riyadh recommended circulating UAE experience in highlighting the strategic role of GCM among the members to encourage them to advance in this regard.
The UAE Ministry of Finance also released statistical data for 2009 related to the Gulf Common Market (GCM) which verifies that the UAE is at the forefront of GCC countries in GCM integration. It is the leading GCC country with balanced and sustained development and is keen to participate in the further success and expansion of GCM. The GCM project came into effect at the beginning of 2008. Its main aims was to facilitate real estate ownership, the movement of capital, equality of tax treatment, trading of stocks, establishing companies, as well as benefiting from educational and health services and social development.
UAE is working hard to enhance the competitiveness of GCC economic bloc. According to the report of Ministry of Finance (2010) UAE played very important role in the further development and integration of Gulf Common Market by implementing GCC Supreme Council resolutions which is given below as:
(a) GCC nationals residing in UAE increased to 7,650 in 2009 from 5,608 in 2008.
(b) Governmental loans granted to GCC nationals to establish industrial projects rose to AED 20 million in 2009 as compared to AED 5.5 million in 2008.
(c) GCC nationals own property in the UAE rose to 22,706 in 2009.
(d) 1,884 licenses for professional and commercial activities were granted to GCC nationals
(e) Seven commercial GCC banks were operating in the UAE in 2009.
(f) 3,080 GCC nationals were working in UAE’s private sector in 2009 compared to 2,117 in 2008 while 605 were working in federal governmental entities and 1.932 in local governmental bodies.
(g) 207 GCC nationals were employed in UAE’s semi-government sector in 2009.
(h) Joint stock companies listed on UAE exchanges that can be traded in by GCC nationals rose to 85 out of a total of 153 and GCC investors actively trading were 27,6805 in 2009, an increase of 1,222 compared to 2008.
(i) GCC students studying in UAE schools rose to 16,463 in 2009, an increase of 987 students from 2008. 12,892 GCC students were in public schools and 3,571 in private schools. 3,589 GCC nationals benefit from insurance protection in 2009, an increase of 597 from the previous year.