As the Middle East’s unrest continues, it has resulted in more violence and new demonstrations in Syria and Egypt. But it has also brought political surprise: the invitations by oil-rich Gulf nations to Jordan and Morocco to become members of the Gulf Cooperation Council (GCC).
On the surface, the invitations are incongruous, partly because of geography, and partly because of history. Neither Jordan nor Morocco can be considered part of the Gulf, as one is in the Arab East, and the other in North Africa. Also, the formation of the GCC in 1981 by six Gulf countries — Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain — was largely done to create a security alliance between the countries against the backdrop of the Iraq-Iran war.
There is a strong economic incentive for Morocco and Jordan to join the GCC, regional analysts note. Membership would open both countries up to new investment from the Gulf, and potentially help them with arrangements for fuel subsidies, as rising energy costs have resulted in fiscal deficits for both.
But analysts see the invitations as a larger leadership effort being conducted by the GCC’s largest member, Saudi Arabia. The Kingdom is pitching unqualified support to its neighbors after the U.S. tacitly supported the toppling of its close ally, former Egyptian president Hosni Mubarak. Also assumed are assurances of protection from popular unrest: The quelling of a rebellion by the Shiite majority population in Bahrain is credited to intervention by Saudi forces, albeit with a number of casualties.
Whatever the motivation, the effort to expand the GCC bloc would help efforts to introduce a common currency in the region, some analysts predict. Up till now, the UAE and Oman have not supported the initiative, partly because of concerns that Saudi Arabia, due to its economy and size, would become the de facto center of regional financial and policy decision-making.
Considering current events, a GCC union provides a valid basis to introduce a common currency in the region, said Robert Mundell, professor of economics at Columbia University, and the Nobel Prize winner in Economics in 1999. Mundell was among a number of Nobel Laureates invited to speak at the annual economic forum this past May in Astana, Kazakhstan.
"I think the countries are going to go back [to a plan for a common currency]," Mundell said. "In the new situation in the Middle East, it doesn’t make this idea worse. I think those countries will go back to the common currency idea, because I think it is basically a good idea for those countries to solidify their currencies and their economies. I think to integrate is a big plus-plus for them, with no negatives."
Mundell acknowledged past political differences that prevented the common currency from being accepted in the Gulf, but suggested strong leadership from Saudi Arabia and the unrest in the region provided new incentive.
"The superpower of this area, Saudi Arabia, is backing this, and then you have Qatar, which is still supporting it, and then Bahrain is still supporting it, but of course there are problems in Bahrain. The UAE is not affected by the unrest as far as I can see. If it can patch up any difficulties, then maybe it can happen as it was supposed to in the first place."
The threat of Iran’s regional ambitions spurred the formation of the GCC in the first place, and is still a valid concern, Mundell added. "Basically the zone is not just purely economical, it’s also social and defense as well," he said. "Defense is a big element in this, because these small areas may be vulnerable to attack by some invading neighbor. Maybe it’s a distant possibility, but it’s a risk."
John Forbes Nash, Jr., who won the Nobel Prize in economics in 1994 for his work in game theory, also was in attendance at the Astana conference. The Princeton mathematics professor took the view that unrest in the region would soon cease.
"There are times in history when things seem to move more rapidly," Nash said. "There was a period in Europe of revolutionary changes in the late 19th Century, such as the il Risorgimento in Italy. But I feel it might calm down in the Middle East. Bahrain seems a lot quieter now."
Nash held a dim view of the ongoing effort to support rebel efforts in Libya, a full-blown conflict that is rooted in the series of Arab protest movements this past Spring.
"The U.S. and other countries are out to get [Libyan President] Muammar Gaddafi, regardless of what he’s actually done. That situation might continue until Gaddafi gets accidentally killed, or maybe some drone strike. I don’t know what will actually happen. What will really help the rebels though is a program of regime change."
Nash added that trying to predict the next crisis was akin to trying to predict the "next great tsunami," and that there was no unified approach to supporting democracy efforts in the Middle East.
"Who are we? Should we all be united and have a joint opinion? I don’t know if we’re any more united than the people that we’re watching in North Africa and the Middle East."