2018 was year of highs and lows for Gulf countries

The United States’ withdrawal from the nuclear deal with Iran redrew alliances, with a regional escalation against Iran.
Sunday 06/01/2019
Leaders from the six nations of the Gulf Cooperation Council meet in Riyadh, December. (SPA)
Concerns and achievements. Leaders from the six nations of the Gulf Cooperation Council meet in Riyadh, December 9. (SPA)

ABU DHABI - 2018 profoundly marked the Gulf and the Middle East at large, with improvements and drawbacks that affected the region on different levels, particularly for the Gulf Cooperation Council (GCC).

Should the agreement reached in Sweden between warring parties in Yemen evolve into a permanent solution to the conflict, rebuilding Yemen will replace ending the fighting as a pressing issue.

“The GCC countries, minus Qatar and Oman, are involved with the Arab coalition in backing the internationally recognised government of Abd Rabbo Mansour Hadi,” said Albadr Al Shateri, a politics professor at the National Defence College in Abu Dhabi. “The thaw in the relationship between the Yemeni government and the Houthi rebels and the delicate ceasefire in Hodeidah achieved recently might become the harbinger for similar ceasefires on different fronts that potentially could congeal into a reconciliation between both parties.”

He said reconciliation would not end the GCC’s involvement in Yemen but it would change its nature because the Gulf will be engaged in developmental and reconstruction schemes. “Rebuilding the state and the infrastructure and investing in different economic sectors to provide jobs and much-needed services will be a mammoth undertaking,” he explained. “The GCC has its work cut out for it in post-conflict stabilisation.”

Riad Kahwaji, founder and CEO of the Institute for Near East and Gulf Military Analysis in Dubai, said Yemen had the largest effect on the region in 2018. “The major offensive in Hodeidah, which led to the Houthis accepting to go to the negotiating table in Sweden, is the biggest event of the year that will definitely have a major long-term impact on the region politically and economically for the coming years,” he said.

“An end to the war will enable countries like Saudi Arabia and the UAE to divert a lot of money from the war effort back to the economic development, so you will have much more cash flow available for all these projects to develop the socio-economic conditions. So, instead of spending this money on buying ammunition and spare parts, it will now go to the economic growth of countries and the region,” he added.

Kahwaji said it would also halt the threat posed by the Houthis, who are “working with Iran in the region,” forming the first confrontation in which Arab Gulf states scored a major victory against an Iranian proxy group that was establishing itself on the southern borders of Saudi Arabia.

“That’s also another major achievement,” he noted. “This will also give a big boost to the efforts of creating the Arab NATO because it demonstrated a major achievement for an operation that was launched, managed and carried out by the Arab coalition.”

Other experts said Yemen has not gone as well for the Gulf powers.

“Yemen, though, has proved difficult for other external powers attempting to forcefully intervene there in the past, including the Egyptians in North Yemen and the British in South Yemen during the 1960s, the Soviets in South Yemen, especially during its 1986 civil war, and various external parties in the 1994 civil war in ‘united’ Yemen,” said Mark Katz, professor of government and politics at the Schar School of Policy and Government at George Mason University. “Like Afghanistan, Yemen is a very difficult place for any external party to intervene in and the best solution may be to promote some kind of internal solution.”

One especially positive benefit for the Gulf, he said, was the increased willingness of Russia to cooperate with Saudi Arabia, in particular on restraining oil production. “As a result, oil prices have recently been relatively high despite the downward pressure on them from increased American shale production,” he said.

Oil prices improved dramatically, with the OPEC average price reaching the highest since 2015. In 2018, the price per barrel averaged $71.2 compared to $52.51 in 2017 and $40.68 in 2016.

Shateri said oil prices will have a direct effect on the health of GCC economies and contribute 60-90% of government revenues. “With high oil prices and the war winding down in Yemen, the expectations are positive with regard to the level of economic growth and higher jobs creation rate for the GCC,” he said.

The year also witnessed US President Donald Trump announcing that the United States would no longer abide by the Iran nuclear deal, officially the Joint Comprehensive Plan of Action (JCPOA).

“Washington won few plaudits from different quarters of the world who have always believed the deal was flawed,” Shateri explained. “The reaction in Europe was different and defied the US move. Europe announced that it would meet its obligation as long as Tehran stood by the JCPOA and the EU entered into the negotiation at once with Iran to devise how it would avoid the new US sanctions while averting them against its own companies.”

He said the Middle East’s perennial conflict took a turn for the worse as the long-touted “Deal of the Century” had not transpired. “The deal was prefaced with a controversial move of the US Embassy to Jerusalem,” Shateri noted. “The Arab world, along with the global community, condemned the US recognition of Jerusalem as a capital of the state of Israel. Palestinians are not sanguine and people who had a sneak preview of the deal of the century are likewise despondent of its outcome.”

Kahwaji said the United States’ withdrawal from the nuclear deal with Iran redrew alliances, with a regional escalation against Iran from the United States with the imposition of sanctions.

“As the sanctions grow harder and the list of countries that have been exempt from oil imports start shrinking, pressure will increase,” he said. “We will see whether Iran will carry out its threats of closing the Strait of Hormuz but 2019 will definitely be full of heated fronts with Iran, very much related to the US administration’s position to end this nuclear deal.”

Katz said the Trump administration’s hostility is an element that most Gulf Arabs welcome. “But while the administration’s pressure on Iran may lead to Tehran having to devote more time and attention to suppressing its internal opponents, it may also motivate it to lash out through increasing support for its Shia militia allies elsewhere,” he added.

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