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GCC countries have failed to agree on further regional integration at the GCC Riyadh summit that was widely expected to announce a unity deal between Saudi Arabia and Bahrain. Expectations had been running high ahead of the meeting. A decision was postponed until the next regular summit scheduled in December 2012.

 

Just before the summit, Iranian MPs condemned the proposed alliance, describing any plans to form a union between the two Gulf states as “unwise,” the state-run Mehr news agency reported. Iranian MPs accused the Saudis and other Gulf states of attempting to push ahead with a union plan, and warned against a planned “takeover” of Bahrain.

 

No reason was given for the indecision, but it is believed that it was taken as a result of internal GCC considerations, as well as due to outside pressure.

 

May 14, 2012

 

 

Analysis and Forecast: Increasing Risk


 

The original proposal for a union was made by Saudi Arabia and Bahrain, shortly after the start of unrest in Bahrain. The original proposal was for a union between Saudi Arabia and Bahrain, but was later extended to include the rest of the GCC. This was due to accusations that the Saudi-Bahraini proposed union was a de-facto annexation of Bahrain, by Saudi Arabia. The most significant long-term conclusion is that this is the second time over the past two years that Saudi-backed integration within the GCC has failed, the first being a proposed monetary union.

 

Opposition to the proposed union came from both within the GCC and from outside, primarily Iran. GCC states feel that greater integration with Saudi Arabia could lead to a perceived takeover of their states by Saudi, by far the GCC’s largest country. Whilst the Saudis remain the GCC’s most powerful nation, the inability to further consolidate their regional influence reflects a degree of saturation to what acceptable power they can hold with the group. In other words, the GCC does not wish to increase the overall influence of Saudi Arabia, which the proposed union would ultimately do. This in itself is a reflection of a widening intra-GCC rift, that will very likely lead to further polarization within the alliance.

 

In addition, the Iranian threats to the proposed union may be interpreted as signs of bowing down to Iranian pressure. Whilst this may not be the case, the Bahrainis and to a lesser extent, the Saudis, have suffered a major diplomatic defeat by the rest of the alliance. This further weakens the position of the Saudis and Bahrainis and may be interpreted as a sign of growing Iranian influence. It also gives greater diplomatic clout for the Iranians, particularly in as far as the Shiite minority in the GCC is concerned. Shiites within  the GCC have in particular been opposed to the proposed union, and the inability to agree can only strengthen their local position.

 

The overall effect of the failed summit is that there is an increased political risk within the GCC, and in particular within Saudi Arabia.

 

Below is a figure that shows the percentage of Shiites in GCC states, and the one below, shows the distribution of Shiites in the GCC, showing that most of the Shiites in the GCC are located in Saudi Arabia: