Elusive Dreams of a Gulf Union
Author: alkhaleej Posted May 14, 2012
The chairman of the Federation of Gulf Cooperation Council Chambers (FGCCC), Khalil Bin Abdullah Al-Khonji, said that a “Gulf Union” is still a distant dream because it requires a strong foundation, something which is not yet present and which will take a long time to build. He advised government officials to be realistic and not to rush things, warning against being influenced by emotions instead of reason. He explained that the GCC countries suffer from heavy bureaucracy, which is exacerbated by government agencies and which hinders communication between the six countries’ citizens.
Furthermore, he said that “some” have created obstacles to transporting goods at the borders. The chairman criticized member states who want to be exempt from the council’s agreements and decisions for certain reasons. Moreover, Gulf investors suffer from the lack of a “Gulf citizenship” concept, and many are unable to open companies, institutions or commercial enterprises without a partner or a sponsor from the host country. Meanwhile, Asians establish thousands of clandestine companies.
In an interview with Al-Khaleej, Khalil Bin Abdullah Al-Khonji, the chairman of the FGCCC and the chairman of the Oman Chamber of Commerce and Industry (OCCI), said that the biggest challenge facing the GCC countries is a lack of credibility, especially because these countries make strategic decisions that are poorly thought-out and difficult to implement in reality. Al-Khonji wonders how the GCC can earn the trust of its citizens and the world amid such disarray. He urged GCC countries to match their words with deeds, to trust the Supreme Council’s advisory board and give it more power and to select creative, able-minded personnel who can analyze issues with objective reasoning, not emotion.
Al-Khonji criticized the governments for treating Gulf citizens like children, and urged them to direct their funds and energy toward helping their people. He called on government officials to listen to their people, using Oman’s experience as a model. Last year, Oman recognized the legitimacy of the citizens’ demands and rapidly implemented them without accusing its citizens or questioning their loyalties.
The following is the interview that Al-Khaleej conducted in Muscat with the chairman of the FGCCC and the OCCI.
Al-Khaleej: When you assumed your responsibilities as OCCI chairman five years ago, you put forth a 10-point program which we published at the time. Now, you are the FGCCC chairman for the next two years. Do you have a specific program, agenda or project in mind?
Al-Khonji: I consider the FGCCC chairmanship to be an honorary position. I proposed to the council that the position’s term be reduced from two years to one year so that there is a new chairman every year.
Al-Khaleej: That is a strange proposal. Usually those who sit on such a chair are hesitant to leave it.
Al-Khonji: Yes. They considered making the term either two years or one-and-a-half years in length, and in the first meeting that I chaired — which was the 40th meeting in Abu Dhabi — I asked each state to give its opinion on the subject. I told them, "I am the chairman now, but I still insist on making this proposal,” which I had put forth a year and a half ago. We appreciate everyone’s view, but the majority chose to have two-year terms. My proposal was intended to make the terms of the FGCCC chairman and the GCC chairman equal. That way, the two would come from the same country, which would help resolve some of the problems hindering economic cooperation among the six GCC countries. But unfortunately, the proposal did not pass and I am on board for two years. No one agreed with my proposal, and I hope that they were not pressured otherwise. They said that one year is not enough for the FGCCC chairman to accomplish much.
Between Cooperation and Partnership
Al-Khonji: Through the FGCCC I want — and I hope — to move the GCC from “cooperation” to “partnership.”I see a lack of confidence among business owners as well as investors, whether they are involved in private equity or in government investment funds. Although the figures show that our local, domestic investments positively affect our investments in other countries, we still prefer to invest outside our borders. How can we become unified if we do not move from cooperation to partnership? How can we become unified if f we cannot move to the partnership phase by combining two-way investments and merging our citizens? It seems that the people's ambitions are bigger than the ambitions of their governments. We must move to the “partnership” phase, which would improve our situation. This is what we announced at the 40th meeting in Abu Dhabi, and this is our main goal at the FGCCC.
Al-Khaleej: This may be your personal goal, but how have others reacted to it?
Al-Khonji: When I introduced the issue, the goal, and the idea, everybody was receptive. That was recorded in the meeting minutes. But I am talking here about us as business people; I am not talking about the governments. We hope to be more effective in the next stage, and this is what we seek to accomplish by holding more conferences and seminars among the GCC countries. That would help us achieve this goal.
Al-Khaleej: Do you think that holding these seminars and conferences in the Gulf will produce any results, or will they simply be “advisory councils” whose recommendations are never implemented?
Al-Khonji: They always criticize the chambers of commerce because they hold seminars, conferences, and workshops. But the chambers’ main job is to promote their country at home and abroad. Our job and our mission is to bridge the gap among employers’ perspectives, placing them under one umbrella through bilateral meetings and within the chambers of commerce. It is true that the chambers of commerce are in decline, since they have not come up with anything new for the region.
But the special thing about the FGCCC is that it reflects the organized regional order known as the GCC. It is therefore assumed that the FGCCC has the mobility to achieve greater coherence among its members, unlike Arab, European or other commerce federations. The FGCCC is one of the most active federations when compared to Arab or Islamic federations. We have accomplished a lot and we aim to do more.
Al-Khaleej: It is one of the most active because it has sufficient funds to organize hundreds of conferences, workshops and seminars. But what is important is the result.
Al-Khonji: No, no, no. It is not a question of money. Many members have money, but are inactive. We are not one of the richest chambers of commerce in the area, but we are the most active. Perhaps there is just a lack of media coverage.
For example, in this year's program there are many activities that bridge the gap between the GCC and other countries. We have the Gulf Economic Forum which honors the companies and institutions in Dubai, the Gulf-Uganda forum being held in Entebbe, an international conference to fight money laundering being held in Doha, the 2nd Exhibition for Challenging Projects being held in Doha as well, the Gulf-Jordanian Economic Cooperation Forum being held in Amman, the 2nd Gulf-Romanian Forum, the 4th Gulf-Indian Forum being held in Jedda, the Gulf Tourism Forum being held in Fufairah and the Middle East Expo for Renewable Energy being held in Bahrain. The FGCCC will be held in Kuwait. So do not expect miracles from the FGCCC. Our job is that our voice and our investors reach other countries and attract investments to our countries.
Finding a Sponsor
Al-Khaleej: You said that the ambitions of the people exceed the ambitions of their governments. What does that imply in reality?
Al-Khonji: That's true. At the GCC level, we suffer from a high level of bureaucracy in some institutions, which hinders communication. We would have been able to achieve a lot if it had not been for these “exemptions.” Some countries want to be exempt from adhering to certain laws because of “special circumstances.” They are still not ready, after all these years. I think that GCC investors are prepared to invest, but they are not warmly received by some countries. They get treated like foreigners. They hear that the government has authorized one thing, but they never see it applied in reality! Many of the GCC member states have reservations about the concept of a “Gulf citizenship” and about allowing other Gulf citizens to start companies or enterprises. Instead, they require a partner who is a citizen or a “sponsor;” meanwhile, other Asian citizens are establishing companies and stores through the so-called “clandestine trade.” Unfortunately, this is the reality. When a GCC citizen wants to start a company in a GCC state, he faces many obstacles. And border barriers. Can you imagine taking 10 days to drive a truck from one Gulf state to another, simply because of the border checkpoints? These trucks could be transporting food. This is harmful to business.
Al-Khaleej: In light of these problems, can we imagine a railway linking these countries? Or is that all empty talk?
Al-Khonji: No, God willing, the railway will help the private sector.
Al-Khaleej: But wouldn’t the train also have to stop at the borders?
Al-Khonji: No, God willing, it would not have to stop because it would be moving from one station to another. But this is not our original goal.
Al-Khaleej: But there are commuter trains. And they must stop at the border to be searched or for other reasons.
Al-Khonji: There should be no need to check passports among the GCC countries, just like European and other advanced countries have done. It is true that identity papers must be checked, and that can be done by qualified staff. We are hoping to make major progress in that regard. The railway lines between the GCC countries must be completed, as well as the electric grids and the water supply network. The roads must be connected as well. We are now waiting to link the land route between Oman and Saudi Arabia, from Ibri to Ramlet Khalia. This project is in its final stages. It will make travel easier for citizens and commercial vehicles, and eliminate some of the border points that delay movement. Having a train line will revitalize the GCC countries because it will reduce their dependence on maritime transport. This will help to better serve the GCC countries by wasting less time at the ports.
Al-Khaleej: What are the main economic challenges facing the Gulf states, especially now that the last GCC summit adopted a proposal to establish a Gulf Union? In light of current circumstances, is it possible to create a full union?
Al-Khonji: In my personal opinion, no. The GCC was established as a means of cooperation, and we are still at that stage. Joint cooperation and joint investments must advance into the partnership stage. The union issue is premature because a union requires a strong and solid foundation, which does not yet exist. It will take a long time. Some GCC countries are preventing certain national products from being exported to another GCC country, yet at the same time we are talking about establishing a union. Is that reasonable?
How can that be achieved? Even at the psychological level, this is painful. We demand a union, yet there are innumerable border obstacles and each checkpoint is different. The ground is not fertile and there is no water, as they say. So this is a long journey. Government officials must remove these obstacles so that one day we can achieve what we have been dreaming of. We have seen unions among many other countries, including Arab countries, that have collapsed because they were borne out of irrational decision-making and lacked homogeneity.
Al-Khaleej: So the dream of a Gulf union remains elusive?
Al-Khonji: Yes, that is true.
The Gap Widens
Al-Khaleej: What general challenges does the GCC face?
Al-Khonji: The biggest challenge is credibility. We hear about decisions, strategic or otherwise, that are difficult to implement because they were made without foresight. This underlines the importance of properly planning any decision before implementing it, especially because we have to maintain our credibility in front of our people and the world. We have to be able to properly carry out our decisions and ensure that our words match our deeds in order to earn everyone’s trust. Actually, there have been significantly fewer decisions like these, which must not be repeated. We should thoroughly study all proposals. Furthermore, the GCC countries must invest more power and confidence in the Supreme Council's advisory board, and we must choose capable staff who can study the issues objectively. We are in a rapidly-changing world, and this compels government officials to understand what their people need, especially now that the gap between citizens and their government is widening in many countries.
The changes that we are experiencing can happen in any country, whether now or in the future. We must recognize citizens’ needs. First and foremost, this means addressing educational policy and teaching methods in order to produce a good citizen who loves his country who is aware of what has been achieved in order for him to maintain these achievements.
Citizens aspire for more, but in many Gulf states, they still treat their citizens like children. The world has become a small village, and recent events have proven this to be so. What happens in one place affects what happens in another. So, we must invest time and money into our people, and we must harness our potential to serve and protect the interests of our citizens.
The Omani experience in dealing with last year's events should be taught because Oman recognized the legitimacy of the citizens’ demands and proceeded to rapidly implement them without questioning its citizens’ loyalties or making accusations.
Read More: http://www.al-monitor.com/pulse/business/2012/05/al-khaleej-interviews-the-chairm.html