Three major events transformed Iraq and the Middle East: the Iranian Revolution of 1979, the Iran–Iraq War of 1980–1988 and the Gulf War of 1991, the latter of which led to a change in the domestic policy of President of Iraq Saddam Hussein and thus brought about new dynamics in the relations between the Iraqi government and the country’s ethnoreligious groups (mainly the Shiites and the Kurds). Iraq was under an embargo imposed by the United Nations at the time, which limited access to resource distribution for a part of the elite and, combined with the government’s practices that marginalized a part of the population, led many to flee the country, strengthening the opposition forces in exile. The United States used both economic and military tools to exert pressure on Baghdad. The U.S. military tactics destroyed Iraq’s infrastructure and undermined the stable operation of government agencies in the country.
The U.S. occupation of Iraq in 2003 allowed the American side to exert multifactor influence on the formation of a new elite. Even the technical implementation of the voting process, not to mention the principles of the new Constitution, were dependent on the United States. But the United States had directed the political process in Iraq even before the country adopted its new Constitution in 2005 by creating two key bodies: the Coalition Provisional Authority (CPA) and the Iraqi Governing Council (IGC). On June 9, 2004, the United Nations Security Council unanimously adopted resolution 1546 that endorsed “a sovereign Interim Government of Iraq” and a “timetable for Iraq’s political transition to democratic government.” 
The 2005 election urged forward by the United States established a new political elite that received international recognition but limited legitimacy at home. Since the election was held in a very difficult environment and was boycotted by a large share of the Sunni population, just how representative it exactly was has been called into question.
Following its own logic in relations with Iraq and being embedded in the regional context, Iran decided to use the levers already at its disposal to influence the Iraqi political process and shape a favourable political elite in the country. In fact, this process began long before the U.S. invasion, because movements opposing Saddam Hussein had already been formed and their leaders often lived in Iran. Despite the fact that most religious and political movements in Iraq can trace their origins back to the 1950s or 1960s, as the Islamic Dawa Party, which has become the most formidable opponent of the Iraqi authorities, actually developed during the Iran–Iraq War of 1980–1988. The leaders of Dawa, who were in exile, mostly lived in Iran.
Starting in the 1980s and especially in the 1990s, the exiled opposition was increasingly influenced and dominated by Kurdish ethnocentric and Shia faith-based political forces. Opposition figures that aspired to keep the vision of Iraqi nationalism homogenous and centralized increasingly gave way to political forces driven by an ethnoreligious agenda . Depending on the political situation, Iran continued to lend limited support to various Kurdish forces opposing the central authorities in Iraq.
After 2003, Shia political forces sought to form coalitions, a key example of which was the alliance between the Dawa Party and the Supreme Council for the Islamic Revolution in Iraq (SCIRI), which was founded in 1982 and had engaged in close cooperation with the United States even before 2003. The key constituency for SCIRI was Iraqis of Iranian origin and the Marsh Arabs that migrated to Iran at times of crisis. Baghdad has always seen these population groups as untrustworthy . SCIRI was headed by representatives of the country’s religious elite – the well-known Hakim family of Shia religious scholars. Support from Ayatollah Ali al-Sistani consolidated the position of Dawa and SCIRI in post-Saddam Iraq.
After the United States occupied Iraq, the young cleric Muqtada al-Sadr from the influential Sadr family called his supporters to take up arms against the occupants. His followers formed the Mahdi Army that killed hundreds of American soldiers. The Sadrist Movement attained considerable influence in parliament and represented Shia communities from south and central Iraq, the Marsh Arabs and the Baghdad district of Sadr City (named after Muqtada al-Sadr’s father, Ayatollah Mohammad Mohammad Sadeq al-Sadr, who opposed the regime and suffered at its hands) . The Sadrists’ military wing retained considerable influence over the state security system.
Despite having some political clout and a few ministerial posts, the Sunnis found themselves marginalized in the new situation and did not have influence over the decision-making process in Baghdad as the case for, for example, the Nujaifi clan from Mosul. The main forces opposing the United States and the central government in Baghdad were the Naqshbandi Army (which had ties to the former Ba’ath Party) and Al Qaeda in Iraq . Attempts to inject Sunni groups (the Sahwa or the Al-Iraqiya movements, which also included Sunnis) into the political elite were generally unsuccessful.
The ongoing marginalization of the Sunni population by the Nouri al-Maliki government and the radicalization of society, compounded by falling oil prices and the war in Syria, led to the establishment of an alliance of various groups in 2014. That alliance became known as the Islamic State of Iraq and the Levant, or ISIS (a terrorist organization that is banned in Russia). The new Prime Minister Haider al-Abadi, who assumed the post in 2014 and represented the Dawa Party, decided not only to fight ISIS, but also to carry out some reforms. His efforts were greatly facilitated by the positions of Tehran and Washington, which have tacitly supported Abadi’s initiatives to form a technocratic government to fight corruption since 2016.
By jeopardizing the patron-client relationship and the distribution of wealth enjoyed by the old Iraqi establishment, al-Abadi fell into disfavour with many, including members of his former party Dawa. As a result, many wanted to oust him from the post of Prime Minister. But Iran and the United States put pressure on their partners within Iraq to prevent that from happening. This led to a reconfiguration of political forces in 2018 that nevertheless preserved the same elite.
The training of new security forces in Iraq by American experts, including in U.S. training camps effectively amounted to training various militias or groups linked with militants from the Badr Organization and the Mahdi Army. For them, collaboration with the United States was a matter of pragmatism, since everyone realized that Washington would play a defining role in the future federative Iraq. At the same time, the Shiites, who had become the dominant group in Iraq, were looking to the Iranian model of governance.
The formation of the new political elite in Iraq and the country’s security forces was thus directly dependent on the presence of U.S. occupation forces, the policies of Iran and Iran’s ties with movements opposing Saddam Hussein. The dominant Shia political groups proved to be very diverse and heterogenous, with different political interests and a strong radical influence.
The 2018 Election Results in Iraq: The U.S. and Iranian Trace
Stopping ISIS was the main objective for the Iraqi Army. But achieving a national conciliation between the political forces proved to be a key condition for the country where Sunni interests were deeply embedded in the power structure. The “Kurdish issue” also popped up on the agenda. The independence referendum held by the Kurds in territories controlled by Erbil in September 2017 put Baghdad and Prime Minister al-Abadi personally in an awkward position before the 2018 election and lent strength to their political opponents.
Similar to the fight against ISIS, the United States and Iran sided with the central government. This led Baghdad to carry out a military operation to restore sovereignty and even regain control over the rich oil fields of Kirkuk. This loss for Kurds – meaning a failure of the referendum – revealed a rift between the two major forces of Iraqi Kurdistan: the Barzani and Talabani clans (the latter was experiencing division itself after the death of former President of Iraq Jalal Talabani). However, this heralded a new stage in the consolidation of power of the central government and even a rise in nationalist sentiment.
A critical event that happened even before the 2018 election was the split within the State of Law Coalition and the Dawa Party, which had been in power since the U.S. invasion of 2003. Most of the seats in parliament were won by the Saairun coalition (also known as Marching Towards Reform), giving it the upper hand in forming the government. The coalition was headed by the leader of the Sadrist Movement, Muqtada al-Sadr, who is an extremely influential religious figure. However, this did not prevent his movement from using a nationalist and anti-corruption agenda as a platform. However, the Fatah Alliance (sometimes translated as the Conquest Alliance), a coalition that had been accused of ties with Iran on numerous occasions, finished a close second to the Sadrists, winning almost as many seats in parliament. The Fatah Alliance is believed to have been supported by the Popular Mobilization Forces (al-Hashd al-Shaabi) formed in 2014 to fight ISIS. However, none of the abovementioned parties won a majority in parliament. It was clear that even the most prominent players would have to negotiate a compromise with each other, as well as with less influential forces.
It was more than three months before the new parliament met in early September 2018. The political process stalled as thousands of people took to the streets for rallies and demonstrations, with the biggest protests taking place in Basra. The political forces eventually had to find common ground and start forming a government. Again, it was the intervention of Marja Ali al-Sistani that became the catalyst for agreement.
The first step that signalled the redistribution of power was the election of Chairman of the Council of Representatives (Parliament) of Iraq. On September 15, 2018, the 37-year-old member of parliament from the province of Anbar and member of the Al-Hal (“Solution”) party Mohamed al-Halbousi was elected by a majority (with 167 votes) as the Speaker of the national parliament. Hassan Karim from Saairun took the post of First Deputy Speaker. He garnered an even larger majority than the speaker, receiving 210 votes. On the whole, al-Halbousi can be considered a compromise figure both for Iran and the United States. His first visit, however, was to Kuwait, which hosted the International Conference for Reconstruction of Iraq early that year. This suggests that the new speaker is counting on the support of the Gulf monarchies and intends to focus on reconstructing the country after the war.
The next step was the election of the president and prime minister. The presidential post had been traditionally held by a representative of one of the largest Kurdish political forces, the Patriotic Union of Kurdistan (PUK). Despite the presence of several other candidates on the list, the most likely was former Deputy Prime Minister of Iraq, Barham Salih, considered to be pro-American. Salih was not running as a single candidate for Kurds, as had been the practice since 2003. The very return of Salih to the PUK (he had quit the Union just before the election to form his own party) and the support he received as a presidential candidate were predictable.
But the Iraq Kurds could not agree on a single candidate for president, which, again, exposed a division among the elites. The Kurdistan Democratic Party (Barzani clan, Erbil) nominated Fuad Hussein, the former President of Kurdistan Region. Evidently, Erbil and Sulaymaniyah reached a last-minute agreement on the distribution of power at the federal and regional levels. Barham Salih ultimately became President, and Fuad Hussein became Minister of Finance.
The Prime Minister and his cabinet are a key junction in the power architecture of Iraq, and it was this point that became the focus of struggle. All parties had to trade concessions and search for compromise. A way out of the deadlock was ultimately found, and the solution was not in favour of Prime Minister al-Abadi. Several days before the election it was clear that the pendulum had swung in favour of former Minister of Oil and Vice President of Iraq Adil Abdul-Mahdi.
The country continued to be run based on the quota principle of Muhasasa Ta’ifia, with a member of the Kurdish community as president, a Sunnite as a parliament speaker and a Shiite as prime minister. In reality, the system that had been established remains essential for Iraq. External forces, both in Iran and the United States, continue to work with Shiite political and military groups. They remain an organized force and are viewed as the basis for security and statehood, just as they were before the 2018 elections.
U.S.–Iran Relations under Donald Trump and Challenges for Iraq’s Political Elite
Iraq has traditionally been influenced by the dynamics of U.S.–Iran relations. The signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015 reduced friction between the United States and Iran, strengthened pragmatic groups within the Islamic Republic, and created relatively favourable conditions for stabilization both in the region and in the Iraqi domestic political process. By the end of 2017, Baghdad had regained control of key cities and settlements largely thanks to the efforts of the al-Abadi government to coordinate the assistance of the two opponents and most important players in the region (the United States and Iran) in the fight against ISIS. However, with the defeat of ISIS and the removal of the topic from the global agenda, the United States and Iran no longer had any grounds for further “silent” engagement, so it ceased.
A new round of confrontation began following the arrival of the Donald Trump administration in 2018 and the withdrawal of the United States from the JCPOA in May 2018, which put Iraq in an uncomfortable position. The U.S. sanctions against Iran that followed Trump’s decision caused serious damage to the country’s economy and endangered any agreements between Tehran and third countries due to the extraterritorial nature of the sanctions. For example, under the threat of sanctions, the French concern Total withdrew from the largest project to develop the South Pars oil and gas field by selling its stake to the Chinese National Petroleum Corporation (CNPC).
Large-scale U.S. sanctions against Iran could cause serious damage to Iraq due to the interdependence of the economies of these neighbouring countries. Iraqi representatives have held regular meetings with members of the U.S. administration, stressing the need for the country to cooperate with Iran. Baghdad has been able to secure several deferrals, and Washington has exempted Iraq from the sanctions regime (for 90 days each time).
Iran continues to be a vital source of electricity for Iraq. However, even though there is a need to replace Iranian oil on the world market – and Washington is working on this task – there is an increasing role for Iraqi oil in it. If the American side decides to stick to its policies, then it can also impose sanctions against Iraq, which will lead to increased risks and instability.
Constant pressure on Tehran did not lead to a revision of the “Iran deal,” which is what President Trump initially wanted. In such circumstances, Iran could have set about escalating regional affairs. In this case, it had the tools to undermine U.S. interests in the Middle East and, of course, in Iraq. For a long time, Major General and Commander of the Quds Force within the Islamic Revolutionary Guards Corps (IRGC) of Iran, Qasem Soleimani, was considered the key coordinator of Iranian actions in Iraq. He is credited with many of the achievements of Iranian politics in Iraq, including the agreement on the results of the elections and nullifying the results of the referendum in Iraqi Kurdistan in 2017.
Iran demonstrated particular care and accuracy in establishing its influence on the Iraqi political process after the Iraqi elections in 2018. During their visits to Iraq in 2019, both Minister of Foreign Affairs of Iran Mohammad Javad Zarif and President of Iran Hassan Rouhani held meetings with almost all political leaders and public figures over the course of several days. Unlike the Iranian side, U.S. representatives usually arrived with unplanned visits. On one such occasion, Donald Trump personally flew to Iraq to visit an American base, where he met with soldiers. The trip did not include meetings with any leaders of the variegated Iraqi political spectrum.
Iraq’s foreign policy as a whole became more balanced after the formation of the new government, where Mohamed Ali Alhakim stood at the head of the Ministry of Foreign Affairs. Iraq prefers to have several points of reference to help it pursue its course. For example, while visiting Moscow, Alhakim outlined Iraq’s principled position on the return of Syria to the Arab League, a policy which runs counter to the U.S. agenda in the region. At the same time, Baghdad has its own interests, namely, to ensure security on the Syria–Iraq border. In addition to cooperating with the U.S.-led Global Coalition to Defeat ISIS, Iraq interacts with Iran, Russia and Syria within the framework of the Baghdad information and coordination centre. At the regional level, Iraq seeks to become a platform for dialogue between various regional and global actors .
Since 2003, the United States and Iran have gained serious influence on the formation of the Iraqi elite. The new Iraqi elite, as well as its individual parts, has been influenced by the policies of Iran and the United States and the dynamics of their relations. Many politicians who came to power in Iraq after 2003 were previously in opposition and lived in exile. Part of this future elite has made a choice in favour of the West, while a much larger part has chosen Iran. After the 2018 elections in Iraq, the processes of distributing power and determining the degree of influence of external players continued.
It became increasingly clear that the elements of Iraqi politics that had become traditional since 2003 had been preserved. The political forces that had established themselves at that time and the external players supporting them – the United States and Iran – continue to perpetuate this system. At the same time, there are calls within the country to eliminate the influence of external players in determining the country’s domestic and foreign policy agenda. This, of course, creates opportunities for other countries to pursue their interests, such as the monarchies of the Persian Gulf and Russia, but also makes them adjust their policies regarding the United States and Iran, which have a traditional presence in Iraq.
The unintended symbiosis between Iran and the United States in Iraq, brought about by the similarity of their interests in this country, is gradually being lost as the fight against ISIS fades into the background. Notwithstanding the fact that the 2018 elections and the escalation of tensions between the United States and Iran created a new configuration of forces, Iraq remains dependent on these external players, and its political elite continues to be based on the Muhasasa Ta’ifia system, approved by the country in 2003. Despite the demand for change that exists in Iraqi society, the current political elite, even though it may sacrifice individual political representatives, will retain its position without any fundamental changes.
1. Sapronova М. А. The Constitution of Iraq in the Past and in the Present. Moscow: Middle East Institute, 2005, p. 84.
2. Hashemi N., Postel D. Sectarianization: Mapping the New Politics of the Middle East. New York: Oxford University Press, 2017, p. 117.
3. Minyazhetdinov I. K. The Balkanization of Iraq: The Factors of Reproduction and the Spread of Political Violence // Conflicts and Wars of the 21st Century (Middle East and North Africa). Moscow: Institute of Oriental Studies of the Russian Academy of Sciences, 2015, p. 263.
6. Sapronova M.A. Op. Cit, p. 88.
From our partner RIAC
Can Erdogan repay the people’s trust?
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.
The 32nd Arab League meeting will have a far-reaching impact
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.
Regional Connectivity in the Gulf Cooperation Council
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.
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