Azal Advisors is pleased to share this report, a compendium of insights by leading experts on GCC affairs. Addressing burning topics faced by the Gulf’s policy makers, these original viewpoints reflect on the challenges faced by GCC States and suggest pragmatic policy-paths to explore.
Covid-19 has taken centre-stage as the defining global event of 2020, and in the process has tested the resilience of Gulf economies to an external shock that has been unprecedented in scale. While it is impossible to predict what the economic aftermath of the pandemic will look like, it has undeniably given a sense of renewed urgency to the imperative for economic diversification among petro-dependent states if they are to achieve economic prosperity while ensuring fiscal sustainability.
The crisis has also contributed to a greater realization of what climate change can entail and the need to mitigate its effects – of particular relevance to the Gulf not only due to the direct effect of temperature increases (estimated by the World Bank at 2°C to 3°C by 2050 for the Arabian Peninsula) but also for what it means in terms of the trade dynamics between the Gulf and the rest of the globe: reduced demand for fossil-fuels following an energy-mix that will increasingly favour renewables; reduced supply of food from countries that have been exporting to the Gulf on the back of the climate-driven depletion of their own resources, in particular water; and private capital that is more selective and increasingly conditional on climate action by those seeking to access it. The looming US presidential election is a more
near-term concern for the Gulf. Many plausible scenarios can unfold with different policy implications notably in terms of security. But whether it is a continuation of the current unpredictable and transactional US administration or the onset of an administration that is expected to practice selective multilateralism, a significant re-engagement in Gulf security by the US will be unlikely. This will place the onus on GCC States and on a politically reinvigorated GCC characterized by mutual trust and pragmatism to enable effective cooperation. GCC States will also need to balance their relationship with China in order to hedge their bets against the ongoing and
likely irreversible decoupling between China and the United States.
This report provides initial considerations on some of the above topics and others. While there is no silver bullet to address the region’s challenges, we believe that diversified expert viewpoints are critical given the inter-linkages between the economic, environmental, societal and security realms.
Contributions by Steffen Hertog; Jean Francois Seznec; Giacomo Luciani; Kate Dourian; Bernard Haykel; Mohammed Turki Al-Sudairi; Eckart Woertz; Martin Keulertz;
