Is the emphasis on defence spending within the Gulf Cooperation Council (GCC) appropriate to the threat and the requirement to maintain Internal Growth
1.0 Introduction.
The Gulf Cooperation Council (GCC) is composed of countries such as Oman, Bahrain, Qatar, Saudi Arabia and United Arab Emirates (UAE), and Kuwait, which are located in the Arabian Gulf region. The cooperation was formed during the 1980s with the aim of economic integration, political coordination, defense cooperation, informational cooperation and social, cultural and educational goals of the Gulf region and exploring ways of strengthening them in the global scenario. This decision to form a regional and unified structure in the Arabian Gulf was promulgated after the regions States recognized the existence of common interests and shared similarities among its citizens and member states. Although long before the formation of GCC, these countries had begun cooperating in many fields formally and informally with the formation of GCC, overall coordination was enhanced and a regional Master plan was drafted. This Cooperation allows each country to independently formulate and implement its own national plans and policies considering the extensive regional plans.
The GCC countries have huge reserves of oil and gas, the energy drivers of the global economy today and in the future which contribute huge revenues. GCC countries are dependent on their oil-rich economies to support their economic, social and human development projects, which are the platform for performing its operations. Given that oil is a depletable resource, the GCC dependence on exports must be checked by focussing on other non-oil exports, which will bring internal growth and reduce the risk of economic stagnation in the future. The presence and availability of these natural energy reserves in the GCC countries has made the security of the region volatile as external countries such as US seek to make bilateral and multi-lateral agreements to enable them exploit these oil reserves. The desire of GCC states to ensure their security has led to massive investments in their defense systems by acquiring not only defense and security equipment but also upgrading their existing ones and acquiring sophisticated ones where necessary. Terrorists who are major security concern in the GCC have a clever way of harnessing intercontinental air transport links and feeble practices and immigration control to manoeuvre and transfer their ill operations between states and countries. Their well covered tracks in the guise of experts in computers or engineers have made it hard to identify them so they are able to penetrate in almost all countries those in GCC not exempt. Therefore, extra vigil has to be kept and this is possible when their possible institutions of passage are strengthened and response system kept at high alert should they strike. This sometimes may be done at the expense of development in other equally important sectors of the economy that deal with employment, poverty reduction, tackling the non-reducing inequalities, and investments which are key drivers of internal growth.
2.0 The level of Government spending within the GCC States and how this compares with other national spending profiles.
GCC countries are economically dissimilar and at varied stages of economic advancement due to their difference in essential and strategic natural endowments. Most GCC states are endowed with huge reserves of oil, electricity and gas, which are the worlds main sources of energy. Considering this, they have huge revenues generated by these natural resources, which have placed them at a strategic advantage over many other States in the Gulf region. Government spending on defense within the GCC states has been constantly increasing as the member countries plan to stay abreast in modern military development and technology to ensure the efficient capabilities in the military are chief in their defense administration. More investments are being done to upgrade military infrastructure within the GCC States. Scholarly research reveal that although affected by the oil prices United Arab Emirates, for example has invested in the military platforms and still predicts that it is going to invest more in the coming years.
2.1 Defense spending and agriculture
Despite being oil-rich, many Gulf States receive variable and inadequate rainfall which when considered with the high evaporation rates choke the availability of renewable water resources. This has led to over exploitation of available water resources to nourish their water dependent agriculture. Desalination through modern capital demanding, costly and an un-environmental friendly technology has taken its toll on the available countries economies revenues. Furthermore, with demand for water increasing almost fourfold that is from 6 Billion Cubic Metres (BCM) to about 28 BCM in the past two decades. This when coupled with almost four-fold population growth from about 8 million in 1970 to 30 million in 2000 has stretched the water resources by increasing the demand for food and water. Given that, GCC states economic performance is below its potential States are forced to seek alternative ways of meeting the unquenchable demand for water either within the region or internationally. This has led to heavy spending on water sustainability in the Gulf region to ensure security of their current water needs and guarantee future water sustainability for population consumption and agricultural use. GCC is spending on import only by 2008 had reached US 24 billion and is expected to double in the next decade ending 2020. Therefore, in some GCC countries defense spending almost equals that on agriculture and water for, industrial and domestic uses. Moreover, investments in irrigation mechanisms such as lift pump wells to increase irrigated land and agricultural output for local communities.
2.2 Defense expenditure and macroeconomic policy reforms
In the GCC countries, various macroeconomic reforms are being undertaken to manage internal and external expectations of the citizens and governments. The employment rate in the GCC countries is believed to be very low and has been due to stagnant economic growth with poor international links. Proper links to the global economy are necessary in ensuring the GCC countries growth and advancement towards self-sustenance despite the requirements to invest in the security details of their population.
Most GCC countries are dependent on oil for their wealth and economic development funds. This has placed them at a volatile situation during times when the prices of oil decline significantly depriving them of the necessary funding for their economic development projects and investments on defense mechanisms. In addition, their reform measures are externally driven by international institutions to achieve economic growth. Economic growth without tackling poverty and inequalities is insufficient as it fails to meet the needs of the populations at the lowest levels. Inflation in many GCC States can be contained by ensuring food stability through Food Stabilization Programmes and scaling up investments. Properly planned and executed investments plans in public infrastructure, physical human capital and human skills has been proven in strengthening the economys capacity to absorb the demands. Most GCC countries have liberalized their economies allowing foreign direct investments (FDI) and this has acted positively in averting economic deterioration and strengthening local institutions. In the Gulf region GCC, countries have the highest per capita Gross Domestic Product (GDP) measured at purchasing power parity (PPP).
The numerous economic challenges prevalent in the region need to be solved so that meaningful and sustainable growth can be achieved and lead to creation of more employment opportunities for the fast growing population, which is a major contributor of the labour force. This in return will reduce poverty and improve the living conditions.
GCCs countries are oil-producing economies and with what has been termed as resource curse the over-reliance on oil due to their huge oil-related foreign exchange inflows has lead to the neglect of non-oil exports and even the non-oil investments. With the huge accounting for oil in exports at about 75, the non-oil sectors contribution is alarmingly given that it is the one that should act as a stabilizer in case oil prices fluctuate. For instance most GCC countries import more than 50 of their food consumed by their population a key indicator of their over reliance on the outside world. Despite measures to cushion GCC countries from adverse oil price fluctuations economic downturn is still a menace to most of the GCC countries as it greatly affect the revenues of GCC States. Basically, some GCC countries are vulnerable to global economic crisis due to their political conflicts and instability, which are principal contributors to economic downturn and stunted internal growth.
Majority of GCC countries enjoy free movement of goods and services within their territory, which is a broad and bold step towards reducing unemployment and allowing inter-state investments in joint projects that, will improve the living standards of the respective nationals. With the presence of the global melt down the GCC, countries are exporting less oil and therefore the countries are having fewer funds to import food and this has forced them to limit imports, which have significantly affected their populations. This has made the governments to shoulder the burden as food prices have increased and the GCC government have become the provider of their population through subsidies. This is as a result of failure to invest in the local projects that were to guarantee them self-sufficiency in terms of food.
GCC countries response to crisis such as food deficiency demonstrates a lack of coordination and proper policy making although it is quicker and more extensive than the other countries in the region. As some researchers have put it, due to the diverse nature of their economies with differentiated capacities coordination and proper policies formulation for the GCC states has become hard. Nevertheless the agreement by GCC countries to coordinate their policies that is, monetary, financial and fiscal and to effect changes in the inter banking lending rates and the introduction of new regulations in their stock markets is a step in the right direction to dealing with the problem of coordination. Individual states plans have also streamlined the economic view of the GCC members. For instance, countries such as Bahrain have established a Creativity Bank with funds to lend to small enterprises so as to engage them in the development process. Similarly, Oman has focussed on encouraging industrialists to improve their efforts and develop new marketing and management strategies so as to enhance their competitiveness in the market. Moreover, initiatives to address poverty and unemployment by the population itself have been hailed as appropriate packages in tackling these issues and promoting the productive sectors of the economy such as services, industry and agriculture. In addition, campaigns to promote local patriotism and industries support by purchasing local products have been embraced. Oman has identified that clear mechanisms properly implemented with vital participation of major stakeholders in the business and production sectors are the key in ensuring they achieve their intended purpose.
The ratio of GCC spending on defense to that of their total GDP is highest in the world despite their less number of active troops at 1.1 of their population against the global threshold of 10. Furthermore, GCCs defense market has been cited as one of the classic consistent spenders on defense. As the trend indicates, therefore this has opened a great opportunity for defense companies worldwide to direct their efforts there so as to capture and make use of that market opportunity. This opportunity together with internal security issues is seen as the driving force for the GCC defense market today and even in the years to come.
The apportionment of huge amounts of funds to armaments and security in the GCC has always been done at the expense of socioeconomic development and ecological protection. This has disastrous effects on the lives of its citizen due to their associated negative influences such as corruption. This also reduces the amounts of funds available for use in the development of their natural resources in most of the GCC countries. Projects that are aimed at promoting self-reliance such as soil-less farming are neglected at the expense of investment in military equipments and the neglect of the citizens of the countries.
Neglecting of local agricultural and other development factors brings instability between the residents as they scramble for the only available strained water resources. Once internal insecurity and turmoil is bred, the governments end up using more and more of their national funds in terms of security expenditures to tackle this insecurity, which adversely affects the economy and human development projects.
2.3 Defense expenditure and education
Education plays a key and pivotal role in the growth of any countrys economic growth from the internal perspective. Therefore, neglect of the education system and provision of insufficient funding by the GCC governments has affected the education standards both in the primary level and at the tertiary of the GCC states. Poor educational-based system and curriculum has resulted to lack of important skills in the population for economic production. Therefore, educational policies that do not have restrictive curriculums and investment plans in upgrading and modernizing the educational system and standards should be sought after with swiftness so as to ensure access to education by the majority of the population.
2.4 Defense expenditure, innovation and research and development
Some GCC countries have limited innovation available due to focus on trying to keep peace in the oil and gas sectors. This trend can be checked if the GCC governments embark on a massive investment in research and development and innovation capabilities, which will guarantee them higher sustainable results in the long run. Some of the expenditures directed towards defense in the GCC countries should be invested in research and development programmes for all sectors of the economy including defense and security systems. This combined with international cooperation will lead to sudden increase of quality R D and even commercialization in the region instead of huge expenditures in the defense sector.
2.5 Defense expenditure and health
Every country has an obligation to take care of its population and provide for their essential needs. The weakening health care system in some of the GCC countries indicates the neglect of the health care system in terms of upgrading which requires substantial investments. This has placed the population of these GCC countries at the threat of diseases against the governments policy of securing its population not only from external aggression but also from diseases and internal conflicts. The investment in health care system in GCC countries is therefore a core component of ensuring their population security internally.
3.0 What protection agreements between GCC countries and their allies already meet the requirements of regional security
The GCC formation was propelled by the threat posed by the Iran Iraq war and Iranian-Inspired radical Islam. In the Gulf Region, there are very small and feeble neighbours who are very rich therefore there is the tendency of the stronger ones being tempted to seize these oil-rich reserves from the feeble ones. To protect these small states GCC was formed with a joint command and joint defense networks to address the issue of the regions security. This has been conceptualized in these three definitions that depend on the outlook. The GCCs national security focuses on the internal aspects and ability of the states to protect their internal values and principles against external threats necessitating the strength of a state to be stronger than its rivals do. Similarly, GCCs economic mastery is deeply intertwined with national security making any threat to the economy a threat to the national security as well. With a comprehensive improvement of GCC, states economic and national security the regions security is stabilized. A secure GCC state is that which is well guarded against external attacks and occupation and whose population is protected from diseases, poverty and there is a provision of enough opportunities to enhance productive and rewarding existence. To add to this, individuals should feel safe having suitable means of sustenance that meets their basic and secondary needs. To the GCC States security is not only based on safety of the States borders but also on political, economic, social and religious stability. The security of the Gulf States is focussed on promoting peace and stability while eluding internal turmoil or external aggravation and hence disruption of the current standing. It is the overall objective of the GCC political leadership to defend national interests, existence, survival and autonomy in the international standing and ensuring active participation in the building of the regions security. The extended dedication to GCC regional security, economic growth and charitable support should be upheld despite ongoing conflicts to allow crucial inter state relationships to build up. Moreover, military mechanisms must be customized in a manner that does not hamper or delay a steady progress toward closer security ties within the region itself for instance, by giving power to organizations such as the GCC through taking solid set steps to enhance their capacity and autonomy with the US forces, or by allowing regional confidence building measures on a mutual or joint basis with excluded countries such as Iran.
The allowance of western and U.S forces in the Gulf region has been due to the fact that the Gulf security requirement allows foreign allies in their territories if their figures are minimized. This has strengthened the security standards in the region and with those countries that have allowed bilateral ties with these countries. Despite the bilateral ties counter attacks in the Gulf region such as that undertaken by Iraq in Khobar with the aim of weakening the US position in the region a key ally of the current GCC have continued.
Another security requirement of the Gulf region calls for security arrangement that ensures independence and territorial sovereignty of the Gulf countries. Although GCC comprises of several states, these states have to remain independent and maintain their territorial. Furthermore, each state has its economy to run and their population to protect and provide for. Therefore, by maintaining their independence and sovereignty the states are also mandated to maintain their defense systems effective and up to date to be able to withstand potential invasion by apportioning a percentage of their GDP to defense expenditure. In line with this GCC, countries are upgrading their Air Forces, Navies, and Marines. The ability to expel external invaders from their territories from the air and ground is of paramount significance to the Gulf States hence the unending upgrading of their capabilities. Likewise, the respective GCC countries are to undertake their own defense expenditures despite their small economies.
In proper light, the requirement of avoiding foreign interference in the security arrangements of the gulf regions is a prudent idea that has played a great part in ensuring the security of the Gulf region in terms of the nature and scope of current and future threats. Considering that, international countries and the surrounding neighbours have varied motives of entering into agreements with GCC countries and the Middle East regional security arrangement of GCC should not leave a room for compromise. Among the reasons of entering into agreements is the exploitation of their natural endowments that is oil and gas, which are of strategic importance as they are the major sources of energy consumed throughout the world. Oil reserves have been a major cause of conflict in the Gulf region and even countries such as Iraq have invaded Kuwait to enable them have sole monopoly of Kuwaitian oil reserves. Other reasons for countries interest in the Gulf region are ensuring the sustenance of their energy consumption and curbing the penetration of their opponents.
The Gulf region countries and their neighbours are advocating for the disposal of Weapons of mass destruction (WMDs) rather than their accumulation and the disposal of traditional weapons. This is in enhancing the security of the Gulf region from inside the countries or from external countries and potential aggravators. Nonetheless, some countries are hoarding themselves with these against the requirements such as Iran and Iraq. This places the security of the Gulf region in jeopardy making the GCC countries to invest in ultra modern military techniques and combine strengths to insure themselves against attacks by these countries neighbouring them.
The threat of terrorism is a real threat to the Gulf region in the Post 911 attacks. Friendly ties with the U.S were broken and were replaced with doubtful existence. Terrorist attacks have caused the Gulf population to reconsider their internal securities. Acquisition of weapons of mass destruction by large Middle East countries only encourages the smaller countries to seek similar weapons for self-defense. This race for arms is detrimental to the growth of the countries in the GCC and a threat to regional stability. Moreover, to GCC the effects of use of WMDs and ballistic missiles used in the Iran-Iraq war has become an eye opener of their detrimental effects. Although these Missiles penetrated air defences of target countries, their effects far surpassed the intention as it inflicted damage not only to the rear lines but also to population centres. Strained water resources due to increased population in GCC states is a major source of conflict in the Gulf region considering that most countries share rivers. To solve this problem and avert future conflicts in the Gulf region proper policies to manage water effectively and efficiently must be formulated and implemented.
GCC countries are in a potentially vulnerable position, which therefore needs a collective arrangement to pool security resources and enable them provide mutual defense support. GCC member countries support each other financially to expand their military and defense facilities, as they believe that the security of neighbours brings about positive spillover effects to its immediate neighbours. Moreover, GCC countries participate in joint military exercises with each other to train, share experiences and equip their joint forces with the necessary modern military techniques that will place them in a better position to face any possible invasion. GCC states have maintained relations with external states such as the United States to shield itself from possible external threats from large countries. Although alliances with external states may bring local instabilities by displaying the governments inept power to provide for its own protection locally and hence the outside dependence the benefits accrued from these alliances cannot be overlooked. GCC countries that have external alliances have not only acquired protection against large neighbours but also have gained rare expertise from these external forces.
The GCC countries have therefore agreed that the security of their bloc is imperative and consequently all have agreed to contribute troops to a joint brigade size rapid deployment force. This together with the creation of the Peninsula Shield comprising of about 100,000 officers with a military command based around the GCC States will enable the maintenance of security in the region. Moreover, according to the agreement each GCC member state must dedicate resources and assets to support the Peninsula Shield . To the GCC states, having a defense policy and machinery are insufficient because without the modernization and expansion of their military machines and equipments they are at potential risk from countries with modern and sophisticated artillery and tankers. In case of an assault these external attackers such as Iraq who have acquired modern military equipments will place GCC states at a disadvantage and hence the need for being up to date with defence machineries. The modernization and expansion of the regions tank force, additional of Airborne Warning and Control Systems (AWACS) aircrafts, establishment of anti-submarine combat capability coupled with their related servicing, training and support will play very crucial in ensuring that the security requirements set by GCC are able to sustain an assault given the capabilities.
Another major decision by the Gulf States such as allowing non-member troops on their soil such as Egypt and Syrian troops have strengthened their defense and security system. Despite their dependence on outside reliance in ensuring the balance of power, they have ensured the protection of their concerns over autonomy, local entity and government security within the GCC region.
4.0 Is there a case for reducing defence spending in the GCC on the basis of shared responsibility for the regional security
As part of the requirement for regional security GCC, member states have created the Peninsular Shield and contributed troops and resources to maintaining it. This in turn have increased the amount set for the expenditure of defense as the states still have to undertake their individual security requirement measures together with the contribution to maintaining the Peninsula Shield.
The nations willingness to entrust resources to a common defense system is very crucial in an allied or joint security arrangements such as that of GCC. Additionally for equitably contribution the defense, spending must be assessed comparative to GDP of contributing nation and their ability to contribute considering its commitments and debt service ratio. It is important to note that GCC countries together own around 2000 tanks, slightly more than 1250 artillery units and more than 600 fighters, which are smaller compared to Iraqs more than 2700 tanks, 2000 artillery units and more than 350 fighters. For the period, 1991-2000 GCC countries reduced their defense expenditures. For instance, Kuwait reduced its expenditure by more than 40 from 6101 million down to 3904 million. Likewise, Saudi Arabia reduced its defense expenditure from 23817 million down to 20553 million. This translated to a reduced GCC expenditure on defense, as these two mid-sized countries of GCC are principal contributors to the huge expenditure on defense. However, other GCC countries increased their defense expenditure but in minimal amounts.
5.0 Over-investment in defence as mirrored by an underinvestment in national infrastructure within the GCC states.
The national infrastructure within GCC plays an important role in the internal growth of the specific states and therefore serious attention should be given to their development. Any neglect of the national infrastructural development in the GCC states will result in economic stagnation and deterioration as internal growth will not suffice. A closer look on the effects of their support or neglect has lead to the following scholarly findings.
5.1 Health and primary education
The state of the health institutions and educational facilities in most GCC states are average in development indicating massive need for investment in these sectors, which are crucial in maintaining their population in an active capacity within the economy. Wisely, planned and implemented development policies for health and educational institutions in GCC will result in sustainable internal growth of their economies. The benefits of investments in the health institutions and educational facilities in GCC can only be identified by the huge differences between health and primary education investments.
5.2 Social and economic infrastructure
Social and economic infrastructure, including housing, sanitation, transportation and public services in many GCC states have not been developed for a long period of time as the countries has continuously engaged themselves in defense and military investment. The over investment in defense and under-investments in the productive sectors of the economy is evidenced by the current focus of many GCC states investment plans which aim at expanding their domestic social and economic infrastructures. They have recognized that higher levels of investment on the social and economic infrastructure will raise production, reduce poverty and unemployment and meet the welfare needs of the people, a principal role of any government. To achieve this they have targeted the pro-poor priority areas for development. These Pro poor priority areas are rural development that benefits rural local residents, technological upgrading a key component for competitiveness in the global economy and promotion of modern exports not only of oil and gas but also of non-oil resources.
Acquisitions of high valued weapons of mass destruction by large Middle East countries such as Iraq have only encouraged the smaller countries to seek resembling weapons for self-defense. Given their limited GDP and the huge costs expected to acquire these weapons essential sectors in their economies are denied the necessary funding leading also to over expenditure in defense in the some GCC countries. The race for arms has been detrimental to the internal growth of most of the countries in the GCC and a threat to regional economic stability as it uses funding of essential sectors in their acquisitions and places the reality of war in the region closer when players have the Weapons for Mass destruction and ballistic missiles.
For years, there have been speculations that the U.S may attack Iran nuclear plants since intelligence believes they are used to develop weapons of mass destruction rather than for nuclear energy productions as Tehran has always claimed. Past experience when there was war in the gulf area was the spill over effect to other neighboring nations. The reaction of most GCC governments to this instability has been to divert funds to military expenditure at the expense of improving key organizations and learning institutions. Therefore, due to the political insecurity, anticipated armed attacks and the failure to support private-sector reforms the real economy contracts by about 19 percent.
5.3 Innovations technological readiness
GCC countries have lagged behind in the adoption and implementation of new technologies due to the neglect of the Research and Development plans as funds were being used to develop sophisticated security mechanism. This has made it impossible for them to participate competitively with the global players in different fields of national and global importance such as the telecommunication sector. Furthermore value addition in the oil sector starting from exploration to production and distribution requires considerable investments which are at the helm of the GCC governments.
5.4 Economic development
Rather than over-investing in defense, investments must be directed to manufacturing sectors and other productive sectors where their effects on employment creation and spill-over effects can be felt in the local economy through forward and backward linkages. To better accomplish this, public investments undertaken by the respective government need to be enhanced with the consideration that reformed public sector are capable of forming social infrastructure that empowers its citizens. These empowered citizens of GCC states once engaged in economically productive activities will bring about internal growths which have the possibility of averting present and future internal conflicts. Other than just providing funds for investments the GCC states have realized the need to provide a favorable investment climate that will attract domestic investors to partnerships with the public sectors to promote internal growth. To achieve this the GCC states have embarked on sound monetary and exchange rate policies, quality and quantity improvement of physical and financial infrastructure, furtherance of the state of technology and competence and improving the quality of public institutions.
GCC states have identified that technological progress cannot be acquired just by transferring or borrowing from other countries. GCC states have come to the understanding that competent technological progress requires a significant amount of investment both in the short-run and in the long-run. So as to realize this, huge amounts of outlay are needed to create a technical community able to adapt the modern technological know-how to local needs and wants. In some complex instances it involves the setting up of an Independent Technological Learning Capacity (ITLC) which ensures that the overheads are minimized and benefits maximized all of which require considerable investments jointly with the private sector or independently.
6.0 The extent to which the conclusions from the analysis above are sensitive to current composition of the GCC and how the analysis might vary with a reshaping of the organization.
6.1Composition and effect
Careful analysis of the composition of the GCC reveals that it is composed of countries such as Oman, Bahrain, Qatar, Saudi Arabia and United Arab Emirates (UAE) which are geographically small and therefore are made up of petite populations with exceptions of a few. Furthermore, these countries have small and medium sized economies that which have high revenues from the export of oil and natural gas. GCC being part of the emerging markets they have huge infrastructural needs to serve its small population and produce for the international markets. Most countries in the GCC are not self sufficient in terms of food as they import more than 50 of their domestic consumption and is still expected that if more investments are not made in proper utilization of the waters this will increase even higher. Inability to feed its population is an indicator that it heavily relies on external economies which place them in a volatile situation as international commodity prices fluctuate. The survival of most GCC states could be jeopardized were it not for their oil and gas reserves that enable surpluses and their credit level could have risen far above the ground. The reorganization or restructuring of the GCC countries will involve including more countries or excluding some of the presently included members with the former being the best possible scenario. Discussed herein are the benefits and costs or threats that will accrue with the restructuring of GCC.
6.2 Economic benefitschanges
The reshaping of GCC to include countries that have large geographical area and huge population will increase the economic power of GCC as this will increase its GDP making it an economic hub in the Gulf region. In this ways of enhancing agricultural output will be evaluated and implemented for the benefit of their population food security. A re-organization of GCC with the terms intact will allow free cross border movement of labour between the countries leading to lower labour costs. The inclusion of economies with large economies will enhance the security of the region because they are able to invest in up to date security machinery, which can be used to protect the region. For instance, the 2 billion UAE investment in the purchase of Agile Beam Radar on the F-16 Block has put the Gulf region in the light. This in itself has increased the GCC ability to protect and defend its airspace. The GCC needs to increase their defense policy credibility and demonstrate reliability of their military forces. This will increase the potential of an independent policy for an alliance in the Gulf region given that they all face similar threats. GCC leaders have become conscious and aware that non-military threats to the stability of the region are real and increasingly important. To them economic and political stability provides the skeleton to support the GCC structure. Therefore, the expansion and re-organization of GCC must consider the economic, political and social structures of the new entrants and what they are expected to bring in and how they themselves will benefit. Great care should be taken against foreign debt and extravagant spending as this might leave GCC incapable of running and sustaining its defense policy. An economic diversification result in a greatly reduced share of oil in GDP and internal growth is hastened.
The reorganization of GCC to include larger economies or more member states will bring in diversified population with diversified capabilities. A diversified economy does not depend solely on one sector but a number of productive sectors, which may be interdependent or independent. Therefore, a reorganized GCC will develop a diversified economy that not only depends on the export of oil and gas but also on other non-oil exports, which are consumed within the region such as manufacturing and agriculture. Thus instead of relying on food imports from outside the GCC region economies that will have invested in their agricultural production will serve the GCC region market. Moreover, open markets within the GCC region will open up other economies for utilization of labour present in those GCC countries that are plagued with high unemployment levels. Economic diversification in the restructured GCC will create a more solid demand base, which will enhance the resilience of domestic economy against external shocks. This is happening in Qatar and Bahrain where rapid physical capital formation is levelling to the ratio of domestic demand and hopes that the rest of GCC countries and the whole of Gulf region will follow suit very soon.
Reinvestment in the GCC will seek to support private public partnership in investment activities that will benefit both the participating private firms and individuals as they contribute to the overall growth of the Gulf region. Furthermore, the support of economic diversification will be intensified to utilize to the optimum available resources such as land and water jointly owned or contributed. When all these are developed and controls initiated through stronger and competent institutions the Gulf region will stand out as a successful initiative. The Gulf region skill base has been low and has been of low standards due to the neglect of emphasis on the research and development of its human capital. This is expected to change with reorganization of GCC and the changing of the mindset towards infrastructure development. Business sectors and energy intensive industries such as aluminium petrochemicals and steel have been lagging behind due to inadequate of investments towards them. For that reason, better allocation of funds and resources at GCC will bring together more states that have similar vision of unifying the economic, political and military policies of the region and are willing and able to commit resources to this vision.
6.3 Innovation changes
Innovation is a key to development and without it GCC has continued to lag behind leading to the provision of weak quality products not able to compete in the international market. Innovation explosion and creativity is expected with better spending within the GCC, as cross border movement of these essential tangible and intangible moveable resources will be possible. Furthermore, the ability to import highly skilled workers into GCC States that are greatly in need of them will boost their quality of services, research and product. State support to prudent ideas within the region will play a motivational role to suppressed ideas so that their exposure will boost and grow the available resources for optimal production.
6.4 Manufacturing sector changes
Non-energy sector development is also seen as another area where development and changes will occur with the reorganization of GCC. Substantial investments in the in the rail network within the Gulf region will play an important role in necessitating the transportation of bulk products and people within the region. The manufacturing sector is labour intensive and with the presence of high unemployment, rates in the GCC region diversification into this sector will play a major role in reducing unemployment. With a higher engagement of the population in active labour internal growth will be attained and standards of living will be improved.
6.5 Research and development changes
As Research and Development firms from the GCC countries and internationally affiliated countries flood the Gulf region coupled with the highly trained workforce imported from GCC member states explosion of a kind in new and modern methods of utilizing available resources such as soil-less farming will be a great leap into the future. Moreover, the acquisition of high-tech technologies for oil exploration and field mapping will greatly enhance the production of oil in the region for the benefit of the global economy and local investments. Investments in the ICT sector will inter connect the Gulf region states and enhance communication locally and internationally. Furthermore, research and development in the Gulf region will drive the improvement of available skills in the GCC countries to level a key ingredient in remaining competitive in the region.
6.6 Educational changes
In the more spending by GCC on the education system will develop, enrolments will expand and there will be few if any impediments to development on the GCC states. The spending by the GCC members will result in educational reforms within GCC States at both the primary level and higher-level education. Educational reforms are to enhance the quality of human capital used in strategic sectors that promote the Public infrastructural network in the region. Furthermore, the building of sophisticated high tech industries that require highly skilled personnel from highly trained schools will be developed within the GCC states to supplement the gas and oil sectors. To ensure that educational standards are maintained at a high platform timely reviews and evaluations of the curriculum and educational standards set will be easily undertaken. Regional universities will be easy to establish to reinforce the professional capabilities of workers be they scientists or engineers. The establishment of schools in the region will increase the number of people accessing education locally a great boost in achieving competent human capital. Spending in collaboration by GCC with international schools, vocational training and scholarship schemes will improve the basic knowledge for private initiatives and entrepreneurship.
6.7 Business sophistication
A well-balanced multi sector spending by the GCC will lead to a strong financial sector as an indicator of a strong economy and key to business growth of each independent State. Moreover, a robust economy around GCC will encourage business practises that are honest and trustworthy by the key players, pays off no matter how sophisticated the economy becomes GCC will strive to achieve this better environment. In order to attain this, the reorganized GCC will develop and display well-run institutions where property rights are protected and corruption eliminated. Business superiority will be enhanced as skilled and experienced labour force is actively involved in the GCC states improving the competitiveness of firms within the Gulf region. The sharing of entrepreneurial knowledge and skills between business schools and universities in the region will contribute greatly to the formation of better performing businesses.
6.9 Technological progress
More spending in technology by the GCC will bring about technological progress. With the inclusion into GCC of countries with well developed ICT sectors technology inspiration will arouse the locals of other members of the cooperation to embrace and invest in their ICT sectors so as to enhance the communication within the region and with the rest of the world and reap its benefit to the maximum.
6.10 Health
The health benefits to be reaped with the more spending by GCC members are unnumbered. Health facilities of advanced economies in GCC will inspire other economies to invest in their health facilities for the protection of their population. This will play a great role in ensuring regional wellbeing not only in the health of their populations but also of their forces enabling them to stay fit and ready to face any external attack. Besides protecting diseases in the GCC countries, modern refined health structures with their experienced staff will reduce infant mortality another hindrance to human development a key component in internal growth. Programs that reduce the contamination of water such as proper sewerage and drainage paths will play a pivotal role in improving the health of the population and reduce the expenditure on medical care.
6.11 Institutions
Additional spending by GCC member will help overcome some of institutional drawbacks presently prevalent, which are hindering the realization of an effective cooperation in terms of economic integration. The political reforms, which will be undertaken in the GCC during restructuring, will call for increased responsibility and reduction in bribery in national institution to satisfactory levels to encourage the private segment improvement. To support regional development incremental improvements in institutions to manage the more influential business community will be undertaken.
Among the challenges that GCC has to overcome, is the different governments hold on autonomy fearing to give out their hard earned sovereign control of state economies and military resources to a regional institution or a joint plan for action, especially when they foresee that such an institution is not completely under the control of any one countrys sovereign leaders. Furthermore the interstate doubts present in the region are hampering growth and development of the unification of GCC and the originally expected objectives if regional integration. While differences in opinion are important in brainstorming of different ways of attaining the objectives of the cooperation it has contributed negatively in the advancement of the GCC. Every state is fragmented by its population, tribes and culture, which are different, and therefore drafting a joint security plan has become very hard.
Conclusion.
GCC countries in the Arabian Gulf play a great role in the global economy. They are the major exporters of oil and gas in the world and therefore their security is imperative if the global energy sector has to remain stable. These exports earn them huge revenues, which they use to finance their economical, and security activities. Threats to the stability of GCC countries are real and are emanating from all directions. Immediate neighbours such as Iran and Iraq are going on arming themselves with sophisticated and up to date military equipments, which they are planning to use in, defending their territories andor attacking their oil-rich neighbours to take control of this lucrative oil and gas industries. Therefore, a need for proper security arrangements for the GCC states is of great importance.
Given the populations of these neighbouring countries which sometimes are as much as twice that of GCC and their large economies small and medium sized economies such as those in GCC are placed at a disadvantage thus a need for an external Great Power guarantor to ward off larger neighbours in case of an assault or crisis. Therefore investments in military equipments have to be undertaken if they have to remain relevant in the region but with consideration of each states internal growth. Politics within GCC sates and internal socioeconomic trends must therefore be incorporated as central features in any planning for a future security order within the region.
Major drivers of economic growth in the Gulf region such as education, health, innovation, research and development, technological advancement have to be considered and developed from their current state if internal growth a key to sustainability will be attained. Furthermore, GCC has to break loose from the curse of depending on oil exports revenues to import food for their citizens and diversify their economies and economic base to non-oil sectors by investing in them too. This apart from ensuring economic stability and internal growth will reduce the chances of internal unrest and instability. Care should be taken to ensure that government expenditure whether in defense or in any other sector spent is established from the permanent income of the oil revenues whereby it does not reduce the net worth of a country but instead should increase it.
The involvement of GCC states in the race for weapons be they of mass destruction, ballistic missiles or modern machineries fuelled by large counterparts and neighbours acquisitions is constraining available resources in terms of funds for investment in the non-oil sectors. This race must be discouraged and other ways of maintaining relevance in the security requirements of the region must be sought. Although the there is need to be properly positioned with respect to these large neighbours doing so at the expense of internal growth is nor prudent.
GCC should adopt an integrated policy reform that equally considers the development of all sectors of the economy that promotes not only internal economical growth but also empowers the citizens through productive participation. Properly and well-taken care of population is far much better in coming out with security solutions through research ad development that hungry and physically constrained population. In addition, the emphasis on security seem to have been over emphasized than is supposed and this though has lessened the external threat has increased internal threat from the disconcerted population seeking essential services.
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