Prospects of Jordan and Morocco Joining the GCC

Dr. Mohammed Al-Assoumi: Prospects of Jordan and Morocco Joining the GCC

  • 16 June 2011

What are the prospects of Jordan and Morocco joining the Gulf Cooperation Council (GCC)? This was the raging question not only among various analysts and observers, but also among peoples of Gulf States, Morocco and Jordan, after leaders of the GCC welcomed the bid by the two aspiring states to join the bloc at the end of their 13th consultative summit held in Riyadh on May 10, 2011. Furthermore, they assigned the GCC Ministerial Council with the task of inviting foreign ministers of Jordan and Morocco to start negotiations in order to complete the necessary measures for joining the Council.

The GCC’s decision drew wide attention on account of the significant local and regional implications that this move of expanding the membership of the GCC bloc would entail. Besides, the proposed inclusion would involve making changes in the respective legislations of Jordan and Morocco, so that their laws and regulations dovetail into the unified GCC legislative framework that has been developed over the past three decades. This, in turn, would lead to a change in the rights, duties and obligations of all the concerned parties, which would oblige them to be well-prepared for effecting a successful and easy initiation process that coalesces the prevailing conditions in GCC countries with the existing circumstances in Morocco and Jordan.

As the European Union’s experience demonstrates, it is important to make the necessary preparation in the economic sphere to allow the smooth induction of the two new candidates, by marrying their own interests with the interests and economic proclivities of the whole GCC group. The success of this initiation process hinges on this preparation which would set the stage for successful integration in other fields as well.

As regards the economy, there’s a major incongruity between the economies of Jordan and Morocco and the GCC economies, which underscores the need for making prudent and diligent efforts to bridge the gap. Official statistics in this regard reveal the vast gap between the two sides in terms of growth rates and living standards. These statistics enable us to explore the need to revitalize Jordan and Morocco’s economies—a process which may take several years—with the objective of reducing the differences between the two sides and facilitating the two countries’ integration into the GCC group.

The following 2010 data related to the eight countries illustrate the abovementioned differences:

Certain Economic Indicators of the GCC countries, Jordan and Morocco for 2010

  Population (in millions) GDP (US dollars in billions) Average per capita income (US dollars in thousands)
GCC countries 36 1250 36
Jordan and Morocco 38 130 5

 

The above data shows that the total GDP of the GCC countries amounts to about ten times that of Morocco and Jordan combined. Besides, the per capita income in GCC countries (excluding Qatar) stands at $36,000, while it ranges between $4,000 to $5,000 in Jordan and Morocco. The unemployment rate stands at about 14% in both Jordan and Morocco, which is extremely high compared to the low unemployment rates found in the GCC countries.

There are also other important differences, such as the annual budget deficit and the public debt to GDP ratio, which technically stand in the way of the two sisterly countries’ joining the group, whose member states enjoy healthy rates in these areas and reflect the strength of their economic conditions.

In brief, these are some of the developmental problems that cannot be left unresolved, or would have to be at least minimized to ensure that the economic cycle of the new GCC bloc (with its proposed eight-state membership) runs smoothly without any shortfalls or reversals.

In fact, reducing the said differences would necessitate taking a look at the costs and benefits of the exercise by GCC countries as well as by Jordan and Morocco. In terms of costs, the restructuring of the two countries’ economy would require an injection of no less than $10 billion of GCC investments over a period of ten years in order to help develop the infrastructure of their main sectors—such as the agricultural sector, the small and medium sized industries, and creating employment opportunities for their citizens.

Simultaneously, the GCC countries—that house more than 20 million expatriate workers—can provide Jordanian and Moroccan citizens with abundant job opportunities, resulting in huge remittances flowing into the two countries, which in turn would support their economic condition and reduce their high unemployment levels.

On the other hand, GCC exports would enjoy new facilities in accessing both the Jordanian and Moroccan markets, which are almost double the size of the current GCC market. This would certainly boost GCC exports as they would be able to access markets of Jordan and Morocco without paying customs duties as per the GCC Free Trade Area Agreement, which the two countries would join after their inclusion in the GCC.

To this end, there is a need for time-bound initiation programs for bringing the economies of all eight countries closer to each other. This initiation process might take several years and would require huge investments from current GCC states into the two countries’ economies in the same way as EU countries did with a number of new EU states, whose programs extended over a planned ten-year period in some cases.

In fact, carrying out such programs and commitment is far from being an easy task. Even though capabilities to be exploited by these programs can easily be made available at the present moment due to the large revenue surpluses accrued by higher oil prices; sharp fluctuations in prices don’t guarantee the same in the long run. This necessitates private sector’s participation in supporting such programs, especially in consideration of the promising investment opportunities in Jordan and Morocco.

In this connection, the European Union experience makes it clear that the EU member states suffered, and are still suffering, because of the poor economic conditions in the states of Southern and Eastern Europe. The crises of Greece, Portugal and Romania, for example, have been partly a result of the great disparity between their economies and the economies of the other developed EU member states such as Germany and France; and due to the former states’ attempts to catch up with the developed economies. Still, good preparation and effective programs considerably helped in reducing the prospects of economic crises.

Besides the need for making investments into Jordanian and Moroccan economies has to be preceded by steps to prepare the legislative structures and the infrastructure in the two countries to accommodate the changes, which would be a complex process. Without such steps, the economies of Jordan and Morocco would continue to lag behind the present integrated GCC economies that are bound by common legislation.

Only when time limits are placed for integrating the two countries’ economies into the GCC system would the move to include Jordan and Morocco prove successful and only then would these two economies support the Gulf bloc, by pushing it forward and maintaining its integrity in light of the grave and extremely volatile regional and global circumstances.

Nonetheless, in case such programs are considered difficult to devise at the present moment, they can at least be preceded by GCC’s economic partnership with Jordan and Morocco and can be developed gradually until the two become full-fledged partners; which would then consolidate the position Jordan and Morocco into the GCC bloc.

Generally speaking, the initial welcome by the GCC countries for the inclusion of Jordan and Morocco into the group should rely on a systematic induction process for the economies of the two countries. In fact, the admission of a new state into any grouping of countries is usually seen as a matter of strength for that bloc, but this happens only under the right set of circumstances and the existence of harmony between the two sides. Such conditions are particularly crucial in the economic sphere, and so the process of inclusion should be based on strong foundations for the whole experiment to weather all difficulties that might threaten it.

As for other aspects of the initiation process; such as political, military and security aspects, they seem less complicated than the economic issues due to similarities between the political structures of the eight countries, and their history of coordination on several regional and international issues.

The successful completion of these objective and essential prerequisites would determine the inclusion of Jordan and Morocco into the GCC; while the sentimental aspects—such as the distinctiveness of the Gulf customs, traditions and dialect (which is frequently referred to by some analysts who have reservations against the two countries’ inclusion)—do not touch on the essence of the issue. There are greater and more significant concerns related to common interests, objectives and strategic tendencies through which the important gains achieved by GCC countries over decades can be sustained. In light of these gains, the GCC countries have become a bloc with a powerful economy that is governed by unified GCC legislations, which accord them leverage in negotiations, and enable the GCC to enjoy considerable status for itself in the new global order.

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