Jordan’s accession to the GCC

Dr. Jawad Anani

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It is almost thirty two years ago since the six countries of the Gulf decided to form the Gulf Cooperation Council (GCC). While it stood out as the only credible integration attempt on the part of the Gulf countries, the GCC still has its shortcomings. The United Arab Emirates (UAE) and the Sultanate of Oman balked on joining the proposed currency union. Although there might be objective points to raise against the currency union, but some of them reflected differences over the location of the proposed Gulf monetary authority.

Arguments over certain points of contention often vexed the otherwise serene atmosphere prevailing among the six GCC members. However, their close economic relations could have been as is without the GCC. The best characterization of the GCC is that it is a customs union where all countries apply the same tariff rates on non-GCC imports. Politically, the GCC members have shown more solidarity especially when external threat lurked outside their borders.

Losing national identity

All the GCC members need to diversify their economies away from oil. They are also in dire need for agreed strategies to stem a foreign labor influx and readjust their demographic composition. The threat of losing national identity in certain countries, especially UAE and Qatar, has reached red line frontiers.

Moreover, all GCC members suffer in varying degrees from water shortages and food insecurity. They are also facing constant ratios of poverty and unemployment as reflected in the distorted labor market. Yet, only recently have GCC countries begun to show greater interest in renewable energy and energy conservation. Their domestic consumption of home-produced hydrocarbons is ever on the rise and it will soon have a strong negative impact on exportable surpluses.

Jordan is already a member of the GCC in terms of its economic, financial, labor, strategic, security and cultural relations with the council.

Dr. Jawad Anani

Jordan faces exactly the same problems. The most glaring difference is its ever widening fiscal deficit, which in great part is bridged by donations and soft loans from richer GCC members. The main reason for this deficit is of course Jordan’s high energy import bill. With this exception, Jordan’s economy is similar to the GCC economies. Like them, Jordan has constant rates of poverty and unemployment.

The Jordanian energy strategy has demonstrated that Jordan can become self-sufficient in energy. It already has the infrastructure to develop solar and wind energy, it had begun investing in shale oil which is abundant, and natural gas could be explored soon. If we add Jordan’s potential for atomic energy, then Jordan can bring to the GCC table important ingredients which some GCC members are actively working on.

Moreover, Jordan’s wealth is in its human labor. It can provide about 2 million laborers of high technical and professional quality to an enlarged GCC with Jordan in it.

Notwithstanding that an estimated number of 250 thousand Jordanians are already working in all GCC countries. However, Jordan can also provide needed and well-trained military personnel who can foster the defense capacities of various Gulf States. Armed forces personnel who can be readily mobilized in Jordan could exceed 600 thousand, a formidable force to reckon with.

Jordan’s inclusion

The enlargement of GCC to include Jordan does not add burden on the economies of GCC, but it has a value added to both Jordan and the GCC. Culturally and socially, Jordan is as much a genuine GCC member, and its diversity in this regard is within the expected limits of GCC. Jordanians are very much familiar with poetry, desert traditions and habits which are easily observed and appreciated in Jordan and seen in the Gulf. Teachers and doctors from Jordan can easily communicate with their students and patients in other Gulf States.

Yet, it should be mentioned that some private sector members on both side look with some apprehension at Jordan joining in. Decreasing Jordan’s tariff rates and allowing imports to come in could threaten Jordan’s protected industries and even agriculture. Well, this is a problem that can be easily addressed by compensating potential losers for a limited period of time. Some writers in the GCC countries still grudge Jordan’s 1990-91 position vis-a-vis the occupation of Iraq. However, these same commentators are a bigger problem to their respective countries. The same applies to some Jordanians who may still harbor dreams of total Arab unity. Any project as important as Jordan joining the GCC will have some raised eye brows. This opposition measures very little to the enthusiasm with which Jordanians embrace this proposal.

Jordan is already a member of the GCC in terms of its economic, financial, labor, strategic, security and cultural relations with the council. A next formal and natural step should be taken. Jordan can at the beginning join the GCC customs union where its tariffs are gradually reduced over a period of three year to (5) percent which Jordan has to do anyway. Accordingly, Jordan will be allowed to enjoy free mobility of its capital, labor, and goods and services within the Gulf States. Jordanians are already investing in very large amounts especially in UAE, Saudi Arabia, Qatar, Bahrain and Oman. Investments are not unidirectional from the Gulf to Jordan.

Moreover, Jordan imports from and exports to the GCC constitute a large share of its respective totals. In short, the relation is strong and mutual.

In the next step, Jordan can prepare itself by meeting the fiscal and monetary requirements to meet the benchmarks of the currency union. Like GCC members (except for Kuwait), the Jordan Dinar is linked to the US dollar.
In a nutshell, Jordan’s accession to the GCC, and a further Gulf Union, is the natural next step. Ever since the GCC invited Jordan to apply two years ago, not much has been done. It is about time something is. Otherwise, people in Jordan will think that such an invitation is occasional and ceremonial. I believe it is good for all involved.

Dr. Jawad Anani former Deputy Prime Minister and Foreign Minister in Jordan. He is now the president of the Jordan Economic and Social council. He holds a Doctorate degree in economics from the University of Georgia. Anani held previously the following positions: Minister of Supply from 1979 -1980, Minister of Labor from 1980-1984, Minister of Industry, Trade and Tourism in 1984 and Minister of State for Cabinet Affairs and Minister of Information 1993-1995, and Deputy Prime Minister for the development between 1997-1998 and was given the portfolio of Foreign Affairs in 1998.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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