Page 50 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

34 Dubai & Co.

In the realm of defense, the GCC has shown meaningful collec-
tive action. In addition to a stated commitment to the collective
security of GCC member states, each GCC country (with the excep-
tion of Kuwait) has signed bilateral security agreements with Saudi
Arabia. During the first Gulf War—following Iraq’s 1990 invasion
of Kuwait—all GCC states were part of the international coalition to
liberate Kuwait and defend Saudi Arabia. As early as 1984, a joint
military project called the Peninsula Shield was launched with a
18
force of 7,000 troops. Although the number of troops was later
increased, in 2006 the troops returned to their home countries. King
Abdullah of Saudi Arabia reportedly wants the common force to be
increased but be based in their home countries and collaborate
19
occasionally under joint command. In December 2006, the GCC
member states announced their intent to study the possibility of a
peaceful GCC-wide nuclear energy program. The Saudi foreign
minister asserted that the GCC has no intention of developing
nuclear weapons. 20
Although clearly not yet a single economy or political unit, the
GCC has made significant strides toward standardization and a
common market. Security and defense may have been the catalysts
for bringing the GCC states together, but economics and global
competitiveness create compelling reasons for increased integra-
tion. As a common unit, the GCC has greater scale, diversity, and
strength than its constituent members have as separate markets, as
the states—with the exception of Saudi Arabia—are too small to
have the global economic impact to which they aspire. A more
tightly connected GCC is good news not only for the region, but for
multinational businesses that seek to do business there as well. The
challenge, however, will be applying the most far-sighted and
strategically sound policies to govern the economic unit, even if this
pushes some member states outside their comfort zone.

KEY LESSONS

● The “Middle East” is not a homogeneous region; in fact, the
very term lacks a consistent definition and represents a
very diverse set of countries.