Family issues in the GCC

The Gulf Cooperation Council (GCC) is considered one of the most united – and wealthiest political coalitions on Earth. Recent developments in the Middle East however, could jeopardize the harmony of this peculiar family.

The GCC is just like another family. Mother Saudi Arabia has raised five kids: Oman (1951), Kuwait (1961) and triplets Bahrain, UAE and Qatar (1971), and things have run smoothly for the last 33 years. The family is quite wealthy so conflicts are rare at home; however there are some relatives across the Middle East (e.g. Libya, Syria, Egypt, Iran) that are a bit noisy and tend to have frequent fights. So what would happen if the youngest kid, Qatar, challenges his family by taking sides where it should not? The peace at home would most likely end.

Oman is the oldest and probably quietest brother, living a bit farther away and having adopted a different dress style. Kuwait was once considered the jewel in the crown, but his cousin Iraq tried to steal his fortune, and he has not got back on his feet yet. Of the triplets, Bahrain was the most premature, specializing in the financial services business and replacing Lebanon as Middle Eastern hub in the early 1980s, but he has had some identity crisis (Sunni / Shia) that has affected him lately. The UAE has followed the family traditional business, managing his wealth from a very young age and showing a lot of vision despite his internal divisions. Qatar, on the other hand, has made business out of LNG and became rich more suddenly, so he is known to be not only the youngest but also the proudest kid in the family.

The Arab revolution started in Egypt three years ago. Hosni Mubarak stepped down after 30 years of dictatorship and the future was looking just great for Egyptians; however one conflict has led to another during the last three years. The Muslim Brotherhood (MB), an organization qualified as terrorist by US, Russia and Saudi Arabia among others and led by Mohamed Morsi, controlled the country for barely a year before the next coupe d’état. Now is Adly Mansour who leads the country with a transitional Government, and who has been able to secure $15bn from Saudi, Kuwait and the UAE to stabilize Cairo’s financial situation.
So, what has happened during the last few months?

In July 2013, at the same time that the MB was taken out of power in Egypt, Hamad Al Thani left the throne to his son Tamim, suggesting some changes in Qatar’s foreign policies. In December 2013, Sheikh Tamim was welcome to the GCC during the 34th Summit in Kuwait, and he was asked to break his links with the MB, a requirement that hasn’t been met yet. This has increased the tension in the region, especially between the UAE and Saudi, and Qatar during the past weeks: A Qatari doctor was jailed in the UAE for his alleged support to a MB branch, two Emiratis were forced to quit Al Jazeera, and Saudi is threatening to block the roads to Qatar if they stick to their views.
The situation in the Gulf is now very delicate, and a stronger confrontation can only do harm, especially on the financial side. We cannot forget that the Sovereign Wealth Funds of Qatar and the UAE are among the most active global investors at the moment, and a stronger conflict could have an impact in the developed markets. At the same time, the GCC controls almost half of the production of the OPEC, and this situation would inevitably affect oil prices.

Let’s just hope that the young Qatari Emir reconsiders his position, and that all brothers can live happily – and wealthily ever after.