THE GULF COOPERATION COUNCIL (GCC)
GCC countries located in Arabian Gulf and consisting of states six states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). The area is one of the fastest-growing markets in the world and has become increasingly significant to the global economy.
It attracts an increasing amount of foreign investment across a broad range of sectors, and its rapid expansion and growth makes it an active seeker for modern infrastructure development, technological capacities and business services. Reforms and improvements have been made to strengthen the private sector to be less dependant on government or natural resources, making the area an attractive location for enterprises and expatriate workers and considering overseas expansions in a competitive market.
The combined GDP of the GCC is expected to reach $1.15trn according to projections issued by the Gulf Finance House (GFH), the Egyptian Al Ahli Bank and the Saudi American Bank (Samba). By 2018, total investment in the GCC could reach up to $670mn (Goldman Sachs Economic Paper No: 166, 2008).
The GCC’s common market grants national treatment to all GCC firms, and in doing so removes all barriers to cross country investment and services trade. Inter-state trade is expected to increase by 25% by 2010, and international trade is expected to increase by multiples (The GCC in 2020: Outlook for the Gulf and the Global Economy, Economist Intelligence Unit, March 2009). Because of its strategic location and history, the GCC has had long diplomatic and trade relationships with Europe, Asia and Africa, suggesting its long-term benefit from the expected growth in these continents.
The GCC’s share of world economy is projected to expand slightly higher than the aggregate global growth with an annual average of 4.5%, compared to 3.3% globally growth. Within 10 years, the GCC is expected to provide nearly one-quarter of the world’s oil supplies as well as increasing quantities of petrochemicals, metals and plastics (Economist Intelligence United Limited, 2009).
The GCC is an attractive investment destination and consumer market for imported goods, information technology, and of services to a population that is considered one of the youngest and highest spending powers in the world. The total population in 1998 was over 28 million, but rose to 39 million by 2008, which makes it one of the highest rates of population growth in the world. Food imports alone will double from US$24bn (2008) to US$49bn by 2020 (The GCC in 2020: Outlook for the Gulf and the Global Economy, Economist Intelligence Unit, March 2009).
