Middle East

Who Will Rebuild Syria: Extremely Loud & Incredibly Close

Published

4 years ago

March 18, 2019

After raging for eight years, the violent phase of the Syrian civil war seems to be reaching its final stages, with Idlib as the last holdout. Recently, leaders of Russia, Iran and Turkey held talks in Sochi to discuss securing peace in Syria and preventing a large-scale military assault on Idlib, Syria’s last rebel enclave. World leaders have also discussed the the reconstruction of the war-torn country. Russian President Vladimir Putin urged European Union countries to help rebuild Syria, arguing that it would lead to a faster return of refugees from Europe to their country. His efforts have so far been unsuccessful as EU countries refuse to participate in a rebuilding process that involves Bashar Al-Assad. Arab states are considering readmitting Syria into the Arab League and have shown interest in investing in the country’s reconstruction. However, the United States is pressuring the Gulf states to hold back on restoring relations with Syria and investing in its reconstruction. As such, it seems that in addition to Russia, China, Iran, and India are best poised to invest in and benefit from the country’s rebuilding. Former United Nations Special Envoy to Syria, Staffan de Mistura estimates the cost of Syria’s reconstruction to be 250 billion USD, while the Syrian government estimates the number to be 400 billion USD. Either way, the cost is too high for the Syrian government to finance on its own without the help of its leading businessmen and international partners and allies.

How the Civil War Changed Syria’s Economic Environment

However, during the eight years of ongoing civil war, some prominent faces in Syria’s economic arena have disappeared, giving way to new actors who have positioned themselves and their businesses to benefit from the vacuum created by the civil war and, therefore, became highly influential, obtaining access to Al-Assad’s ‘inner circle’. Some of Bashar Al-Assad’s inner circle members were forced to flee the country, defect to the opposition, or remain neutral—thus losing their favourable position in this inner circle. This applies not only to the decision-making process, but also to the country’s internal economic process. The International Crisis Group’s Peter Harling argues that the war “forced large families to exile or to shut their businesses down and allowed a new generation of wheeler-dealers to emerge.” However, most of these actors and their assets have been sanctioned by the West due to their relationship with, and involvement in projects linked to the Syrian government. This creates a hurdle on the way to Syria’s reconstruction as many businessmen find their own funds—as well as international funds, companies and suppliers—inaccessible.

Economic Sanctions as an Obstacle

Economic sanctions have been successful in limiting the activity of Syria’s economic actors. It didn’t put them out of business as they have developed methods to bypass sanctions. Among those is establishing a close relationship with the Syrian government based on a system of ‘favors’, in which businessmen provide the government with some financial services in return for access to lucrative projects across the country. This poses several obstacles in the face of the country’s reconstruction. How independent are these businessmen from the government as economic actors best poised in terms of access and financial resources to rebuild the country? Given their proximate relationship to the Assad government, it is unlikely that they will gain access to foreign funds needed for the country’s rebuilding. Moreover, do their interests lay in rebuilding infrastructure and improving citizens’ living standards? Or will they rather pursue lucrative projects that are not entirely related to infrastructure, and therefore, will not bring significant benefit to the majority of the population? Furthermore, given the nature of the political and economic process in Syria, foreign companies will need to partner with local Syrian actors who have close ties to the government to be able to effectively invest and participate in the rebuilding process. However, these partnerships are restricted due to economic sanctions. As such, it is important to identify these local actors, their relation to the Syrian government and what initiatives towards rebuilding the country they have taken thus far. The most prominent and currently active businessmen in Syria can be divided into two groups: the ‘old guard’ who have been able to withstand local and external pressures and remain operable, and the ‘new guard’, who saw in the civil war the opportunities to gain access to financially beneficial economic sectors and projects.

Syria’s Most Prominent ‘Old Guards’

Rami Makhlouf is at the top of the ‘old guard’ list. Even under Western sanctions, he is still successfully operating in the country. This is in great part due to his relation to Al-Assad: he is a cousin from mother’s side. Following the outbreak of the war, Makhlouf stated that he would turn to charity and no longer pursue projects that can generate personal gain. However, Makhlouf still has close ties with leading businessmen in the country and is active in several economic sectors, including telecommunications (he owns mobile network company Syriatel), import/export, natural resources, and finance. Moreover, the Makhlouf empire has branches in some European countries, and a team of lawyers creating shell companies and bank accounts to bypass economic sanctions. Therefore, even if at times he is not the face of projects, it is highly likely that Makhlouf is somehow still benefiting from his relations with other businessmen and his numerous shell companies.

Mohammad Hamsho is another infamous old guard who currently serves as Secretary of the Damascus Chamber of Commerce, Secretary of the Federation of Syrian Chambers of Commerce and member of the People’s Assembly for Damascus. In 2018, Hamsho visited Tehran and met with Secretary General of Tehran Chamber of Commerce, Dr. Bahman Eshghi. During the meeting, both sides affirmed their determination to work on improving their economic relation, and signed a memorandum of understanding on cooperation between the two countries in various economic, trade, investment and production sectors. However, given that both countries are under sanctions, the magnitude of their economic cooperation is still hard to predict. Hamsho has been subject to US sanctions since 2011, but has been successful in having European sanctions lifted in 2014 on the grounds that there was insufficient evidence of his involvement with the regime. Two prominent Syrian businessmen who landed on the EU’s latest list of sanctioned individuals, published on January 21, 2019, are Nader Qalei and Khaled Al-Zubaidi. The two are leading actors operating in Syria with investments in the construction industry. One of their most significant investments is in the construction of Grand Town, a luxury tourist project. The Syrian government has granted Qalei and Al-Zubaidi a 45-year agreement for this project in exchange for approximately 20% return on revenue. According to the Council of the EU, Qalei and Al-Zubaidi benefit from and/or support the regime through their business activities, in particular through their stake in the Grand Town development. One of the most prominent actors in the country’s media sector is Majd Sleiman, otherwise known as the ‘intelligence boy’, son of Hafez Al-Assad’s cousin. Sleiman is currently the chief executive director of Alwaseet Group, one of the largest media groups in the Middle East and North Africa region. At the age of 25, he was already running several businesses and had established regional and international connections in the Middle East, Africa, East Asia, Europe and the United States. Even though Sleiman is active in the media and publishing sector, which is considered unprofitable, his companies received significant amounts of money from British accounts. This could be indicative of potential money laundering for the Syrian regime through British banks, via Sleiman.

Syria’s Most Prominent ‘New Guards’

With some families falling out of Al-Assad’s favors, and others exiled or unable to operate due to economic sanctions, a few savvy businessmen found an opportunity to fill the newly created vacuum and establish ties with the Al-Assad government by providing it with much needed services. Most prominent among these ‘new guards’ is Samer Foz, a leading Syrian businessman, known for his ruthlessness in conducting business. In fact, in 2013, Foz served a six month jail sentence for killing a Ukrainian/Egyptian businessman in Istanbul, Turkey. Foz is involved in multiple sectors of Syria’s economy, including brokering grain deals, and a stake in a regime-backed joint venture involved in the development of Marota City—a luxury residential and commercial development project. After several of Al-Assad’s former business allies found themselves unable to continue their business activities, Al-Assad welcomed Foz to his inner circle. Moreover, after being heavily affected by the war, Syria’s agricultural industry suffered, and Foz positioned himself as one of the few businessmen with the ability to broker grain deals. As a result, he received access to commercial opportunities through the wheat trade. Through his investments in the food industry and some reconstruction projects, Foz made his way into the inner circle by providing financial and other support to the regime, including funding the Military Security Shield Forces. Notably, Foz maintains very close ties with Iran, as well as Russia and other Western and Arab countries such as Italy, the United Arab Emirates (UAE) and Lebanon.

Another relatively new name to the arena of businessmen in Syria is Mazen Al Tarazi. Al Tarazi resides in Kuwait and has launched several campaigns in an attempt to get into Al-Assad’s inner circle. One of his campaigns was named “Returning to Syria” in which he pledged to bear the cost of Syrians wanting to return to their country. Moreover, in 2014, he assigned a plane at his own expense to transfer Syrians from Kuwait to Damascus, and back to Kuwait so they can cast their votes in the Presidential election. In 2017, his attempts proved successful and he was granted an investment license for a private airline in Syria, as well as other projects including a deal with Damascus Cham Holdings for a 320 USD million investment in the construction of Marota City. The Syrian Palestinian businessman benefited from his public support of the Assad government. In fact, according to Syrian media, Al Tarazi’s investment in Marota City is the first investment in Syria in which the investor’s share is greater than that of the public sector (51% of the project was owned by Al Tarazi and 49% by the Damascus Holding Company of the Damascus governorate). This investment, as well as his outspoken support for Al-Assad landed him on the EU’s latest list of sanctioned persons. The final businessman on the ‘new guards’ list is Samir Hassan, owner and agent of several companies in Syria, including Nokia and Nikon. After bad harvests due to war, he invested in imports of food supplies, in particular wheat, rice, sugar, and tea, and developed a close relationship with the Al-Assad family. During the civil war and against the background of improved relations with Russia, Hassan was named the Chairman of the Syrian-Russian Business Council, quite a prestigious position given the special relationship between Russia and Syria. Hassan’s investments in the food industry will also be vital during the reconstruction of Syria where he will be able to provide materials and products needed for reviving the agricultural sector, one of the greatest contributors to Syria’s Gross Domestic Product (GDP).

Trends in investments of Syria’s Businessmen

In general, businessmen involved in the Marota City and Grand Town projects have found themselves under Western economic sanctions. Most of Syria’s prominent businessmen have invested in these projects thanks to their connections with the government. In addition to some of the figures mentioned above, Anas Talas, Nazir Ahmad Jamal Eddine, Khaldoun Al-Zoubi, Hayan Mohammad, Nazem Qaddour, Maen Rizk Allah Haykal and Bashar Mohammad Assi have been recently sanctioned primarily due to their participation in the construction of Marota City. The Marota City and Grand Town projects are not essential for the country’s reconstruction, as they represent luxury residential and commercial projects and do not contribute to rebuilding the damaged infrastructure. However, several of the mentioned businessmen have been investing in infrastructure-related industries, such as the metal and steel industry, as well as the electrical and food industries. Recently, Hamsho bought “Al Sewedy Cables” factory, previously owned by Egyptian businessman Ahmad Al Sewedy, which produces electrical cables, towers, columns, transformers and circuit breakers, as well as a foundry (metal melting) factory that produces material for construction. Hamsho was able to acquire Al Sewedy’s company after it defaulted on loans given to it by the Islamic Bank of Syria and was sold in an auction. Foz has also been investing in former businessmen’s assets as he secured the ‘empires’ of two Syrian millionaires previously in Al-Assad’s inner circle. Emad Hamisho, previously known as the “economic shark” of Syria, and his family were sanctioned by the Syrian Ministry of Finance in 2013 after defaulting on a loan of 3.8 million Syrian Pounds he had borrowed from the real estate bank. In 2014, the sanctions were lifted without any clarifications on whether Hamisho had settled his account with the ministry or not. In 2018, the Ministry of Finance issued a new decision to sanction the assets of “Hamisho Minerals.” Foz saw an opportunity in it and swooped in. He entered into a partnership with Hamisho and created a new company where he heads the board of directors. Moreover, after a series of tightening measures initiated against him by the Syrian government in the early phases of the civil war, Imad Ghreiwaty decided to gradually transfer his investments abroad and resign from his position as the head of the Union of Chambers of Industry. His assets included a cables company, “Syria Modern Cables”, which Foz bought in 2017. Notwithstanding the manner of purchase, these initiatives are important for the country’s rebuilding, and are profitable for the investors, as they will provide construction material necessary for the reconstruction phase.

Financing Syria’s reconstruction

It is evident that rebuilding Syria will be largely controlled by Al-Assad’s inner circle of businessmen who have preferential access to investments and are best positioned to receive projects and tenders in the upcoming period. However, a few businessmen will not be able to rebuild the country on their own, and even the country’s most prominent and richest businessmen will find themselves limited in their activities due to imposed economic sanctions. While Syria’s allies are willing to help, and have already begun cultivating and consolidating relationships with local actors to gain access to the Syrian market, they are also facing certain limitations. Iran and Russia are constrained by economic sanctions of their own, whereas India and China are reluctant to invest unless they receive security guarantees to insure and protect their investments in Syria. Therefore, while both local and external actors are willing and seek to invest in the lucrative industry of Syria’s rebuilding, they are faced with many obstacles, including economic sanctions. The irony of the matter is that actors who have access and finances to invest in rebuilding Syria cannot do so since their access depends on their relationship with Al-Assad—a relationship that has provided them with opportunities and finances, and landed them on international economic sanctions lists that now restrict their ability to operate at their full capacity. With the United States and European Union unwilling to foot the bill, it remains to see whether the Gulf States will overcome Western pressures, restore ties with Al-Assad and invest in rebuilding Syria.

First published in our partner RIAC

Related Topics:Economics Iran Russia Security Syria

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Middle East

Can Erdogan repay the people’s trust?

Published

18 hours ago

May 30, 2023

Athar Noor

Image credit: Murat Kula/Anadolu Agency

The Turkiye nation has concluded the most important election in the country’s modern history. The people of modern Turkey came to determine their destiny at a time when their national economic condition is at a very deplorable level. The depreciation of the lira against the dollar has made the cost of goods and the cost of living more expensive. Inflation is now rampant in the country. Economists say inflation reached 85 percent last year.

The country’s currency, the lira, has fallen to a tenth of its value against the dollar over the past decade. Abnormal inflation causes the prices of goods to rise. Imports cost more as the lira depreciates. On the other hand, 11 provinces in Turkey are struggling to deal with the shock of two earthquakes recently. More than 50 thousand people died in this earthquake.

Despite this severe national crisis and economic instability, the majority of the Turkish people have not lost faith in Erdogan. This is an amazing event. Turkey’s 2023 national election reinstated Recep Tayyip Erdoğan, the sultan in power for the past 20 years, as president. On the other hand, the main challenger, the presidential candidate of the Nations Alliance and the leader of the secular Republican People’s Party (CHP), Kemal Kilizdarglu, was defeated.

Erdoğan was elected the first mayor of Istanbul in 1994. At that time, he took the initiative to solve various problems that arose in Istanbul due to rapid population growth, such as air pollution, waste collection, and a shortage of clean water. However, after four years, he had to stand in court for reciting a controversial poem. Erdogan was sentenced to four months in prison for spreading religious hatred. Basically, this event was the unforgettable beginning of the significant public opinion formation behind his rise.

Recep Tayyip Erdogan took power as the country’s prime minister in 2003. The people of Turkey trusted him in the 2018 elections as well. Recep Tayyip Erdogan has been elected President of Turkey for the third consecutive term. He will lead the country in the international arena for the next five years. Turkey will create a new equation in geopolitics. An experienced Erdogan will negotiate well with international actors.

Erdogan comes from the conservative political camp. He entered politics with the Salvation Party of political guru Nazimuddin Erbakan. In 1976, he was elected head of the Beyoglu region of the youth wing. The National Salvation Party was headed by Nazimuddin Erbakan. He later served as Prime Minister of Turkey in 1996–97.

Modern Turkey emerged as a secular state under Mustafa Kemal Atatürk in the 1920s. Erdogan created a new national manifesto with a lot of new energy, new plans, and a new national manifesto in that country. The first decade of his AK Party rule saw democratic reforms in Turkey. It had to be done because of the country’s desire to join the European Union. During this time, Erdogan was praised by liberals at home and abroad for reducing the authority of the army in the country and working to protect the rights of women and minority ethnic groups. However, Erdogan was criticized for becoming more authoritarian over the next decade. According to many, Erdogan has exacerbated divisions in Turkey.

Basically, he became popular in the Muslim world by expressing his anti-US and especially anti-European attitude in the polls, winning the hearts of the voters, and developing relations with Muslim countries. He converted Turkey from a parliamentary system to a presidential system in 2014. According to the opposition, Erdogan made such changes in the regime to enjoy sole power. Erdogan’s supporters regard him as ‘fatherly’, but opponents consider him an ‘authoritarian’ ruler. Its reflection can be seen in the international environment. During Erdogan’s regime, on the one hand, the distance between Turkey, an important member of NATO, and its allies, the United States and Europe, increased. At the same time, the closeness is increasing with anti-Western Russia and China.

Jeffrey Mankoff, an analyst at the Washington, DC-based Center for Strategic and International Studies, said, “Many officials and political leaders in Western countries are upset with Turkey’s Erdogan. They expressed disappointment in him. They believe that Erdogan is the main reason for Turkey’s growing distance from the West. He took everything personally and walked the path of cheap popularity.’

Therefore, with Erdogan ruling Turkey for the past 20 years, there has been a major change in Turkey’s foreign policy as well as socio-economic development. As a result of his long rule, he made many enemies and allies at home and abroad. Now it’s time to just watch, as Turkey’s economy is also seen as a big factor in this election. Will Erdogan be able to restore Turkey’s conventional economy, and how will he repay the public’s trust? These questions have become important.

Middle East

The 32nd Arab League meeting will have a far-reaching impact

Published

4 days ago

May 27, 2023

Prof. Engr. Zamir Ahmed Awan

Image source: China Daily

The Arab League is an alliance of states that currently has 22 member states in Northern Africa and on the Arabian Peninsula, which belongs geographically to Asia. All member countries together cover an area of 13.15 million km² (8.7% of the world’s inhabitable area). Significant parts are desert regions such as the Sahara and the Rub al-Khali sand desert. With about 456.52 million inhabitants, the area is home to about 5.8 percent of the world’s population.

On October 7, 1944, a “Protocol of Alexandria” was signed as a loose union. After elaborating on the ideas, the Arab League was founded the following year on 11 May 1945. The first member states were the kingdoms of Egypt, Iraq, Saudi Arabia, and Yemen, as well as Lebanon, Syria, and the then Emirate of Transjordan.

The history of the Arab League since then has been marked by numerous political and military conflicts in the region. In the immediate post-war period, the growing Jewish population in Palestine played a major role. This led to the division of Palestine into a Jewish and an Arab state in 1949. With the withdrawal of the British Allies, there was also a lack of an overarching protective power and serious and recurrent conflicts with Israel arose.

The recent 32nd Arab League Meeting held in the magnificent city of Jeddah, Saudi Arabia, has drawn to a successful close, leaving a profound impact on regional politics. High-ranking officials and diplomats from Arab nations gathered to discuss pressing issues and forge a path toward greater cooperation and unity. The meeting, which took place against a backdrop of evolving geopolitical dynamics, produced key decisions that are poised to shape the future of the Arab world.

Hosted by the Kingdom of Saudi Arabia, a staunch advocate of Arab solidarity and stability, the summit aimed to bolster inter-Arab relations and address the region’s most pressing challenges. Under the gracious patronage of His Majesty King Salman bin Abdulaziz Al Saud, leaders and representatives from across the Arab League engaged in constructive dialogue, fostering an atmosphere of camaraderie and shared vision.

One of the major highlights of the meeting was the unanimous agreement on establishing a joint counterterrorism center. This significant step underscores the Arab League’s commitment to combating terrorism and maintaining regional security. The center will serve as a platform for intelligence sharing, coordinated efforts, and capacity building among member states, further enhancing the collective response to the ever-present threat of extremism.

In addition to counterterrorism initiatives, the Arab League delegates focused on revitalizing the Arab Peace Initiative, which has been instrumental in pursuing a just and lasting resolution to the Israeli-Palestinian conflict. The participants expressed their unwavering support for the rights of the Palestinian people and called for renewed international efforts to resume meaningful negotiations. The Arab League’s stance sends a clear message that a comprehensive and equitable solution is imperative for sustainable peace in the region.

Moreover, discussions during the summit centered on the ongoing crises in Libya, Syria, and Yemen. Arab League members pledged increased support and cooperation in finding political solutions and bringing stability to these war-torn nations. The delegates affirmed their commitment to the principles of sovereignty, territorial integrity, and non-interference, emphasizing the need for inclusive dialogue to end conflicts and restore peace.

The political impact of the Arab League Meeting cannot be understated. It signifies a renewed commitment to Arab unity and cooperation amid a rapidly changing regional landscape. The decisions made in Jeddah hold the potential to shape the political dynamics of the Arab world, ensuring stability, security, and prosperity for its nations and peoples.

The meeting also provided an opportunity for member states to strengthen bilateral relations and engage in fruitful discussions on areas of mutual interest. In the spirit of constructive diplomacy, numerous side meetings and cultural exchanges took place, fostering greater understanding and cooperation among Arab nations.

As the Arab League Meeting drew to a close, the host nation, Saudi Arabia, expressed gratitude to all participating countries for their valuable contributions and emphasized its commitment to further collaboration in the future. The outcomes of the meeting will be diligently pursued and implemented, underlining the shared determination of Arab nations to overcome challenges and seize opportunities for progress.

This time the participation of Syria was a milestone, it happened after 12 years of absence. Another important aspect was the attendance of Ukrainian President Zelenskyy. These two important aspects will have far-reaching impacts on regional politics and global peace, stability, and security.

Middle East

Regional Connectivity in the Gulf Cooperation Council

Published

5 days ago

May 26, 2023

Ahmed Shaheer

The Gulf Cooperation Council consists of a region of some of the most formidable economies in the world that enjoy vast oil and gas reserves which have brought them immense wealth. The GCC have combined oil reserves of about 497 billion barrels which is 34% of the world’s supply, according to King Abdullah Petroleum Studies and Research Center. However, these countries also share similar problems, which have become increasingly apparent with the fluctuation and gradual decline in global oil prices as well as the impacts of climate change. Since gulf countries share similar economic issues, it means that they should take collaborative efforts to curb these problems as well. Enhancing regional connectivity is one way to achieve this. It will help improve the economies of all GCC member states in the future and allow them to connect with larger markets.

Over the years, several steps have been taken by gulf countries to improve regional connectivity. For instance, since 1980s, there have been plans and several attempts to create a common GCC currency termed as Khaleeji or Dinar. The currency is expected to be valued at around 1 USD = 1.984 KHJ. Although since then, Oman and the UAE have withdrawn from the plans until further notice, this idea still enjoys popularity and GCC governments are still considering it. The region already meets many of the necessary criteria for a common currency as all seven of the countries have very similar economies, values, cultures, and histories. A common currency would bolster trade flows between the countries by removing border barriers, which will result in cheaper goods and services, particularly of healthcare, tourism, and education, and economic well-being of all the countries involved as a result of increased regional connectivity. A common gulf currency would also reduce exchange-rate uncertainties. Tourists and citizens would not need to constantly exchange currencies when visiting different countries in the region. A common currency will also reduce barriers for the transfer of people between gulf countries which will make it easy to exchange skilled labour, thus decreasing unemployment overall and also producing more opportunities for highly educated domestic workers being produced every year. It will also lead to greater economic integration in the GCC as regional connectivity grows stronger.

GCC countries have also begun to seriously explore strengthening transport links. After careful thought and deliberation, gulf countries have agreed to build a 2177km GCC railway in 2009 stretching from Kuwait, entering Saudi Arabia, connecting Bahrain as well as Qatar, then moving through the UAE and ending in Oman. The railway will also connect vast networks of existing and planned railway networks in Saudi Arabia, the UAE, Qatar, and Oman, further improving regional connectivity in the gulf. The project is expected to be completed by 2025 and is expected to drastically improve trade costs, travel times, and connectivity between ports and cities. It will boost trade flows across the bloc and attract foreign direct investment. The GCC also aims to establish a common market and joint Customs union to further strengthen regional connectivity, which will result in greater economic growth and integration. The Saudis have already started expanding their already vast network of railway tracks. They have completed the al-Qurayyat station which connects Riyadh to Jordan and the rest of northern Saudi Arabia, stretching across 1215km. Moreover, the kingdom completed the Haramain speed train at Rabigh Station which connects the Holy cities of Makkah and Madinah through a 450 km track. The UAE has also expanded its existing railway infrastructure, especially with a national rail network connecting 11 cities with trains travelling 200km per hour. Moreover, the Qataris have also built an extensive railway network as part of their efforts to organize the FIFA World Cup last year which consists of 26 projects. These railway lines will be connected with the GCC railway and they will boost regional connectivity in the region, facilitating the transport of people, information, and goods.

Other measures that the GCC could take to enhance regional connectivity would be to take steps to incorporate long term strategies of each member. All GCC member states have similar long-term goals as outlined by Saudi Vision 2030, Bahrain Vision 2030, Kuwait Vision 2035, UAE Vision 2030, Qatar Vision 2030, and Oman Vision 2040. The crux of these plans is to rid GCC states of oil dependence, combat climate change, and increase tourism and entertainment for more economic diversification. Integrating these efforts will increase collaboration, which will duly increase regional connectivity, resulting in more efficient execution of these plans. Moreover, other approaches include easing or eliminating border restrictions to enable free movement between GCC states for citizens and tourists. A major factor limiting trade is border restrictions as trade is less likely to happen if there is a border in between, even if the distance is negligible. If border restrictions are eliminated, then trade will become more frequent and there will be greater regional connectivity between adjacent countries. Furthermore, tourists will also be able to easily access other GCC member states and hence spend more money, cross border competition between markets would also increase, leading to more competitive prices, and finally, it will also reduce price differentials for people who live in areas that are near borders.

For this to happen, GCC countries need to improve diplomatic relations among themselves. This is particularly true after the diplomatic tensions between Qatar and Saudi Arabia between 2017 and 2021 which had forced the GCC nation to seek reroute flights and vessels. Such diplomatic crises will harm prospects for regional connectivity in the GCC and therefore need to be avoided. Moreover, the GCC’s economic growth is expected only at 3.2%, which is much lower than the 7.3% figure estimated in 2022. The figure is also a decline from the 5.8% growth in 2022. Furthermore, oil prices had been declining since many years, which poses a danger to the economies of the GCC. Although a cut in output by OPEC+ member states will boost oil prices in the short-run (they already helped oil prices cross $80 per barrel), this is not sustainable for the GCC economies. Therefore, GCC countries face a range of serious challenges when it comes to regional connectivity. However, the opportunities far outweigh the challenges and the GCC enjoys potential to become an economic powerhouse in the region.