The study revealed that The Gulf Union has enormous political goals, most notably to become a Security Council permanent member to represent the Gulf States.
The study defines the economic integration as a group of countries, geographically proximate, aim to strengthen the link of their economies through opening their markets to each other and enhance mutual cooperation, which will expand the capacity of the market and provide new markets for producers and traders.
The writer believes that the Gulf economic integration enjoys a number of advantages:
• The creation of new business opportunities after the removal of tariff barriers, among the unified countries, to sell products in the other member States’ markets more easily compared to the situation before integration.
• The improvement of the production of goods and productive efficiency, due to the existence of competition with other member countries that will lead to the decline in commodity prices and improvement of quality, thus the consumer will be benefited and the companies’ managements will be improved.
The study defines the direct foreign investment as a long-term investment with durable interest to be run by the mother company through the establishment of an economic project in another State of an independent economy, either through the establishment of an independent foreign investment institution, or equal partnership with national capital, or non-equal partnership.
The foreign investment depends on three variables:
• The host country’s encouraging political, economic, social and cultural situations.
• The capability of the investment companies to exploit above situations.
• The host country’s policies, laws and objectives in the process of the export of capitals.
The advantages of the direct foreign investment, according to the study, are:
• The contribution in the economic development through attracting foreign capitals, which contribute in bringing in knowledge and technology.
• The increment of the foreign capitals’ productive capacity in the host countries through the availability of funds to establish projects and the necessary expansions, in addition to creating new work opportunities that assist in reducing unemployment.
• The attraction of hard currency through companies resorting to sell hard currency to pay their local obligations, and increase export opportunities and reducing imports.
• The joint venture investments contribute in the development of technical capacities and increase the experiences of local managers and technicians.
The main disadvantages of the foreign investments are:
• The monopolization of the host country’s market by the foreign investor.
• Undermining the ability of local investor.
• The economic dependency to the foreign investor.
• The Political consequences that can affect the host country’s internal and external policies.
The study emphasized the contribution of the private sector that reaches up to 70% of the total number of projects in the Gulf region, and, therefore, it represents a fundamental pillar of investment, it also plays a significant role in various areas of operations during the establishment, financing, operating and managing development projects through partnership initiatives between the public and the private sectors, and following the trend of privatization of government projects, and the establishment of more open economic policies through joining the WTO, and also the establishment of financial centers to attract international multinational corporations financial institutions to set up investment projects in the region.
The financial sector in the Gulf area has been achieving a continuous growth in spite of the difficulties facing the world economy, in addition to the establishment of a number of financial institutions, such as Bahrain Financial Harbor, Qatar Financial Harbor and Dubai financial World Trade Center.
The study reviews the most important economic achievements, including the economic reforms and the improvement of the environment of investment that encouraged and urged national capitals to continue in the region.
The study says that it is clear that the standards adopted for rapprochement between the GCC countries are consistent with those adopted by the EU, while they should be different in a way from those of the Europe countries due to the essential difference in the nature of their economies.
The study concluded by reviewing the goals and steps required to bolster the economy, including:
• The establishment of a budget to prepare the Gulf private sector to complete the process of transformation, similar to the steps taken by the EU when established a unified monetary authority.
• The launch of a unified currency among the Gulf countries and a unified monetary institution and central bank.
• Maintaining an equal economic growth rate among the Union member countries.
• The establishment of a unified company to extract refine and export oil and gas.
• The foundation of Gulf investment banks to encourage investment within the Union countries and support internal and external investments.
• The support of the Union countries’ industrial sector and encouraging small and medium industries.
• The establishment of an Islamic monetary unit inside the Gulf central bank with Islamic financial tools.
• The establishment of a unified stock market.
• The establishment of a developed railway to serve the transport of people and goods among the Union countries and to reach to the EU through Turkey.
• The cancellation of current crossings points between the Union countries and to replace the smart card system through border crossing points among Union member countries.