GCC Union Needs `Common Understanding' to Confront Iran

Saudi Arabia’s call for greater unity among the six-nation Gulf Cooperation Council will be achieved with a “common understanding” as the oil-bloc confronts regional turmoil and rising tensions with Iran.

“All members need to agree to unity, not just Bahrain and Saudi Arabia,” the kingdom’s foreign minister, Saud al-Faisal, said after a summit meeting yesterday in Riyadh. The GCC is in “full cooperation” to form a union, he said, adding that greater unity among GCC members will be achieved only following a “common understanding.”

The world’s largest petroleum-exporting bloc has accused Shiite Muslim-led Iran of seeking to foment unrest among the Shiite communities in the region, including Bahrain, where Saudi Arabia and other members sent troops to help put down an uprising last year. Iran denies interference.

The group met in the Saudi capital yesterday to discuss December proposals by Saudi Arabia’s King Abdullah to strengthen the alliance into a unified entity, as well as on policies needed to contain unrest in Syria and the group’s growing tensions with Iran. Bahrain’s Prime Minister Prince Khalifa bin Salman Al Khalifa said two days ago that regional circumstances make unity “an imperative.”

The push for unity is driven by Saudi Arabia’s desire to “organize Gulf foreign, defense and financial policies,” Khalid al-Dakhil, a professor of political science at King Saud University in Riyadh, said in a phone interview. “The region is entering a new phase, and the GCC has to adjust.”

Prince Saud’s comments had been preceded by a statement from 190 Iranian lawmakers criticizing the alliance plans. They described any plans by Saudi Arabia to form a union with Bahrain as “unwise,” the state-run Mehr news agency said yesterday.

Helicopter Patrols

Helicopters patrolled over the conference hall in Riyadh as GCC leaders and officials arrived for the summit. On the streets of Riyadh, GCC flags fluttered and a banner read “the strength of our Gulf is in our unity.”

The United Arab Emirates this month recalled its ambassador from Tehran after Iranian President Mahmoud Ahmadinejad visited the Persian Gulf island of Abu Musa which is claimed by both countries. Iran, controlled by a Shiite clerical leadership since 1979, has accused Bahrain’s Sunni leaders of discriminating against the Shiite majority in the island nation.

The popular movements that swept away leaders in Tunisia, Yemen, Egypt and Libya in the past 17 months have been a catalyst for the GCC to close ranks and hasten change.

“No doubt, you all know we are targeted in our security and stability,” King Abdullah said during the December summit. Saudi’s Economy and Planning Minister Mohammed al-Jasser yesterday urged GCC leaders to seek “a path” to go from cooperation to union.

Customs Delay

The alliance, established in 1981, has been slow to integrate its economies, delaying plans on customs union until at least 2015. The decision to locate a proposed regional central bank in Saudi Arabia prompted the U.A.E., the second- biggest Arab economy, to pull out of a planned currency union. Other obstacles to regional integration include a ban on banks opening more than one branch in another member country.

“The economic benefits of GCC integration haven’t materialized,” Jarmo Kotilaine, chief economist at Jeddah-based National Commercial Bank, said in a phone interview yesterday. “To get those benefits they don’t need official statements, they need to focus on implementation. Greater unity would bring greater trade and greater investments.”

Union Talks

Only the people of Bahrain can talk about independence and no one has the right “to speak on behalf of the Bahraini people about any kind of confederation with any country,” Bahrain’s largest Shiite political group, Al-Wefaq, said in an e-mailed statement yesterday.

“When the European countries decided to move to a union, they went through discussions and everybody voted for or against the union,” Ali Salman, the group’s secretary-general, said in the statement. “While here, the union is forcefully imposed.”

The GCC said in May 2011 that it may admit the Arab monarchies of Jordan and Morocco to the group, which has held out against pro-democracy movements sweeping across the region. In March last year, the GCC agreed to provide Oman and Bahrain with $10 billion each over a 10-year period to help offset the costs of unrest.

To contact the reporter on this story: Glen Carey in Riyadh at gcarey8@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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