GCC and Iraq seizing historic opportunity to engage

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Iraq’s Prime Minister Adil Abdul-Mahdi will this week visit Saudi Arabia a sign of the growing relationship between the two countries and between the Gulf Cooperation Council (GCC) bloc and Iraq. During his visit to Riyadh, the prime minister is scheduled to meet GCC officials.

Another high-level Iraqi delegation came to Riyadh last week and met with GCC officials to launch a newly approved five-year joint action plan for cooperation in a number of important areas. Last month, a large Saudi delegation went to Iraq to discuss investment and trade opportunities. Several high-level delegations from other GCC countries have also visited Iraq over the past year. The press coverage from both sides was positive, almost euphoric.

What are the real prospects for a quick resumption of normal ties between Iraq and the GCC and what are the challenges that lie ahead?

The opportunities are phenomenal. The GCC countries and Iraq have more than 60 percent of the world’s oil reserves and their non-oil sectors are growing rapidly thanks to ambitious diversification plans. Their combined population is over 90 million, mostly young people. Together the seven countries produce about $2 trillion of goods and services annually, with potential for more when Iraq fully recovers from decades of war and destruction.

Iraq’s infrastructure of roads, ports, telecommunications, schools and stock of housing has been nearly destroyed. The Iran-Iraq War (1980-1988) did considerable damage, which has yet to be repaired. The aftermath of Iraq’s invasion of Kuwait (1990-91) also took its toll on the country’s ability to recover. But it was the US invasion of 2003 and the war on terror and insurgency groups that inflicted the most damage on Iraq’s infrastructure.

For the past four decades, Iraq’s considerable revenues were used mostly to fund wars — everything else was almost entirely ignored. Before 1980, Iraq’s education and health systems were among the best in the region, together with high industrial and agricultural production.

All of that has to be rebuilt now, and the GCC countries are able to partner with Baghdad to achieve a speedy recovery. Energized trade and investment will be the most effective engines for recovery, reconstruction and economic growth. Officials acknowledge that current trade and investment levels are modest, due to political, security and economic reasons. But they are determined to overcome them.

The GCC and Iraq last week made a determined push to start the implementation of the joint action plan for 2019 to 2024. The plan has three main pillars: Political and security, trade and investment, and people-to-people engagement. They set up a joint committee of senior officials to guide this process.

Under the political and security pillar, they agreed on regular political consultations to exchange views and approximate positions on regional and international issues. They will closely cooperate on countering terrorism, terrorism financing, and violent extremism. GCC countries have established world-class centers for combating terrorism at all levels and Iraq could benefit from that experience as it tries to stop Daesh from resurging.

Under the trade and investment pillar, they agreed to a wide range of initiatives, starting with four areas. First, they will address existing obstacles to trade growth, including inadequate transport and telecom links. Second, the business community on both sides will be incentivized to partner and organize trade exhibits and investment conferences. Iraq presented a comprehensive investment map with scores of promising opportunities. Third, they agreed to explore creating a common market in electricity production, as the GCC already has a shared electrical grid with potential for growth and Iraq is in urgent need of electricity at a reasonable cost. Fourth, the two sides agreed to work to harmonize their standards. The GCC Standardization Organization has, over the past three decades, produced thousands of standards and measures that are accepted in all GCC countries and could be adopted by Iraq to facilitate two-way trade with their neighbors.

Under the third pillar, the GCC and Iraq discussed several initiatives to bring their people closer together again. Iraq already participates in the GCC football tournament, held every two years. They agreed to expand their sports engagement and encourage joint youth and sports programs. They also discussed tourism and proposals to increase transport links, which are currently limited, and invest in rebuilding tourism infrastructure, including hotels and resorts. Education and health care were also major areas of potential cooperation as Iraq looks to rebuild such key sectors.

The opportunities are almost limitless, but the challenges are formidable. I will mention three: Security, Iran, and governance. First, until security is restored and the areas liberated from Daesh are stabilized, it will be an uphill task to persuade GCC businesses to invest in Iraq. Candid discussions about the situation in those areas have to take place in the planned investment conferences and trade exhibits. There are, of course, financial tools that could be deployed to encourage and reassure traders and investors, but a frank assessment is necessary.

Second, Iran and its proxies are hostile to Iraq’s rapprochement with its GCC neighbors. Iraq and the GCC should be vigilant against attempts by Tehran to sabotage this budding relationship.

Third, governance issues need to be addressed. With Iraq recovering from decades of war and civil strife, it is natural to experience lapses in governance. To their credit, Iraqi political leaders have spoken openly about the need to fight corruption and ensure a transparent and accountable business climate. Iraq will need to translate that into tangible measures to address GCC investors’ concerns.

Fortunately, these challenges are not insurmountable. With political will in clear display on both sides, the GCC and Iraq will be able meet the challenges and take advantage of this historic opportunity to engage. The GCC-Iraq partnership has great potential to transform the region.

Abdel Aziz Aluwaisheg is the Gulf Cooperation Council (GCC) assistant secretary-general for political affairs and negotiation, and a columnist for Arab News. The views expressed in this piece are personal, and do not necessarily represent those of the GCC. Twitter: @abuhamad1

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