Gulf Cooperation Council countries: overview and analysis

GCC

Discuss and decide if the GCC countries can be either classified as Developed or Developing countries. Think of the GCC as a unit/entity and of each one as an individual (take The United Arab Emirates as an example in this case) P.S. GCC stands for Gulf Cooperation Council Countries

GCC countries: Developed or developing countries?

On the surface, it might seem absurd to characterize GCC nations such as the United Arab Emirates and Saudi Arabia, which are characterized by fabulous wealth, as developing nations. "Over the past three decades the member countries of the Cooperation Council of the Arab States of the Gulf (GCC) -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates -- have witnessed an unprecedented economic and social transformation" (Fasano & Iqbal 2003). Although the market for oil has waxed and wanted, overall there can be no denying that oil wealth has enabled substantive modernization of the GCC in critical economic sectors; improved infrastructure; kept the nations relatively debt-free, and improved the quality of life of citizens. "Life expectancy in the GCC area increased by almost 10 years to 74 years during 1980 -- 2000, and literacy rates increased by 20 percentage points to about 80% over the same period. Average per capita income in the GCC countries was estimated at about $12,000 in 2002, with their combined nominal GDP reaching close to $340 billion" (Fasano & Iqbal 2003).

However, these states share a number of characteristics with the developing world nations of Latin America and Africa. First, they are characterized by vast discrepancies in wealth given that the government owns the nation's most profitable assets in the form of oil reserves. And second, in contrast to developed countries, there remains a notable lack of diversification in oil-dependent states. "Oil contributes about one-third to total GDP and three-fourths to annual government revenues and exports. Together, these countries account for about 45% of the world's proven oil reserves and 25% of crude oil exports" (Fasano & Iqbal 2003). Literacy levels are not on par with the developed world and these nations remain heavily dependent upon expatriate workers for both skilled and unskilled labor.

All of these nations could be characterized as rentier states, in which the native population receives heavily subsidized welfare benefits from the government. "Most of the national labor force has been employed in the government sector with higher wage expectations than the expatriate workers" (Fasano & Iqbal 2003). A rentier state is defined a state which "derives all or most of its national income from its property or investments. In the Middle East, these are oil rich states…. Rentier states have a more difficult time developing civil society (industry, internal public works like highways, etc.) because people are generally relatively content with their situations" (Kolberg 2013). Several of these nations, Saudi Arabia most notably, have largely theocratic governments dominated by religious rather than objective, democratic principles. In exchange for providing citizens with material comforts, the government expects complacency of the populace. Regimes tend to be buffeted by economic and political crises which could exert pressure upon them to change. "Within rentier states, there is little opportunity for private enterprise. Domestic businesses necessarily are closely tied to the state" (Kolberg 2013).