GCC needs to create stronger union to boost foreign investment

Countries in the Gulf Cooperation Council should integrate into a single market in order to drive serious growth, according to accountancy firm Ernst and Young.

Streamlining business regulations across the six member states and creating autonomous institutions to oversee trade and finance could make the GCC’s economy the sixth strongest in the world by 2030, the report from the company found.

Such moves would encourage foreign businesses to invest in the region as a whole and drive intra-GCC trade.

EY MENA advisory leader Gerard Gallagher said: “We realised a couple of years ago that there needs to be a more robust debate about how to create growth in the GCC.

“The reason why this is important is because low oil is creating the need for GCC governments to find new ways of creating growth. We believe that by further creating unity in the GCC, there is a substantial opportunity for growth among all six GCC countries.

“If the GCC was to undertake these recommendations, it would be the ninth largest economy in the world. That’s a similar size to Russia and Canada. It would add an extra $36bn to their [member countries’] economies.”

In order to do this however, the GCC would need to adopt a single market with consistent regulations to attract foreign investment, the authors recommended.

It would also need to abolish manual checks at ports and borders, and instead invest in X-ray and digital tracking technology.

The international accountancy firm also called for the introduction of “competitive” financial institutions and those able to validate the inflow and outflow of goods.

However, the report drew short of a single currency, a new central bank or further political integration.

Gallagher said: “We live in the real world and these recommendations are things we believe can be successful from the current political context of the GCC. We haven’t asked for a single currency because some of these things may be challenging in the current environment.

“What we’re not looking to create is a whole new layer. Having conversations and looking to align would be a good start without needing to create a whole new layer of bureaucracy,” he added.