Despite the reconciliation process set in motion last month at the Gulf Cooperation Council summit in Riyadh, there are signs that economic competition between the six GCC member states is heating up as the double shock of the COVID-19 crisis and the volatility of oil prices weigh on Gulf economies, causing high sovereign debt levels.

Saudi Arabia announced that after 2023, it will cease contracting with international companies with regional headquarters located outside of the kingdom.

The ultimatum comes a month after it invited multinationals to relocate their headquarters from the United Arab Emirates to Riyadh, promising benefits such as zero corporate taxes for 50 years.

Despite recent image-building efforts and being the Middle East’s largest economy, Saudi Arabia is home to less than 5% of the region’s headquarters, the majority of which are located in the UAE, where social policies are relatively liberal. “There is only one Dubai,” Emirati political analyst Abdulkhaleq Abdulla told Al-Monitor, noting attempts to emulate it by several cities across the region have been unsuccessful.