The Gulf Region in the Global Economic Context

As part of the Al-Jisr research project looking at a wide range of issues related to the Gulf, FRIDE has overseen a branch of work examining the Gulf 's changing international relations. A synthesis paper of FRIDE's research package offers an overview of its findings. In extracting the main findings from the research, FRIDE asked how justified it is to conceive of Gulf States as rising in influence and global projection. In dissecting the different dimensions of the Gulf 's changing international relations, the policy implications for external powers were also explored.

Since 1998, the GCC's real GDP has expanded by an annual average of 5.2 per cent and by a cumulative total of 65 per cent. The population has risen from 28 million in 1998 to 39 million in 2008. All GCC member countries enjoy high GDP per capita ratios compared to other countries in the region. They enjoy high growth in their economies mainly due to a boom in oil and natural gas revenues coupled with a building and investment boom in recent decades. The GCC is no longer merely conceived of as a hydrocarbon exporter, but also as an investment destination with major infrastructure projects and financial services sectors.

The financial crisis has raised the Gulf 's growing international profile. GCC states have weathered the financial crisis well thanks to reserves from high oil prices during the mid-2000s. Gulf support has been sought for the re-injection of shortterm liquidity into European economies. The GCC's share of the world economy is set to grow as it expands with an annual average growth rate of 4.5 per cent compared with the 3.3 per cent aggregate global growth rate. The GCC is set to grow in importance as an economic and trading hub.

Indeed, as the GCC's weight in international finance and economics has increased, European policies have failed to keep pace with the magnitude of the changes afoot in the region. GCC investment in the EU has now begun to decline. In contrast, the GCC's geographic location and increasing trade links with Asia and Africa will allow it to benefit from expected growth in the developing world.