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from The Gulf Cooperation Council: A Rising Power and Lessons for ASEAN
Published online by Cambridge University Press: 21 October 2015
The GCC Common Market (CM) was officially launched on January 2008, aimed at creating one market, raising production efficiency, and optimizing the use of available resources. The Common Market was also expected to improve the GCC's negotiating position in international economic forums. Furthermore, it offers equal opportunities for all GCC citizens, including the right to work in all government and private institutions in any member state; buy and sell real estate; invest; move freely between member countries; and receive education and health benefits.
The shift from a customs union to a common market was marked by joint duty collection (but not revenue distribution among member states as discussed above) as well as joint importation of food products, medicines, and pharmaceuticals. Industrial inputs were exempted from customs duties, although some tariff protection for certain GCC industrial products was maintained. The GCC Common Market also facilitated factor and product flows. However, it stopped short of a unified GCC law for FDI, given natural resources and landownership issues, as well as opaque business practices and customs — including differences in applying Islamic regulations to non-Muslims. Moreover, GCC state-owned oil enclaves do not attract FDI easily. Thus, FDI is really more applicable in the non-oil sectors. Private sector investment as a percentage of total investment is low despite the privatization of independent water and power projects. Direct state funding projects in crisis-hit sectors may reverse privatization and public-private partnerships, but this is not to be confused with xenophobic nationalization.
As previously noted, GCC citizens are already permitted to own land and encouraged to build, occupy, and/or lease them to others as homes or investment. The promotion of intra-GCC travel and familiarization has boosted medical tourism and other service sectors. Interestingly, regional conflicts have created safe havens, second homes, and commercial and investment opportunities in the GCC for non-GCC citizens. What the Common Market bodes for them is still unexplored.
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