Gulf to look beyond Pakistan as insecurity rises

Subject Outlook for Pakistan-Gulf relations. Significance Pakistan's parliament last month voted against joining the Saudi-led military intervention in Yemen. Since then Pakistan's Prime Minister Nawaz Sharif and Chief of Army Staff Raheel Sharif have visited Riyadh to clarify the decision, reassuring Saudi Arabia of Pakistan's support in case of any external aggression against the kingdom. The Yemen intervention has exposed some faultlines in the relationship between the two allies, as well as in Pakistan's ties with other members of the Gulf Cooperation Council (GCC), some of whom -- most notably the United Arab Emirates (UAE) -- described Pakistan's decision as "dangerous and unexpected". Impacts Pakistan will lose leverage in GCC states as the latter opt to provide aid via multilateral, international mechanisms. Islamabad will be reluctant to share nuclear technology with GCC states -- primarily for fear of provoking Washington. China will increasingly become Pakistan's preferred diplomatic and economic partner, despite a degree of mutual suspicion.

Subject Prospects for the Gulf states to end-2017. Significance Gulf Cooperation Council (GCC) countries agree on the need to check Iran’s regional aspirations, but differ radically on how to achieve this goal -- pushing Saudi Arabia, Bahrain and the United Arab Emirates (UAE) to open confrontation with Qatar and leaving Kuwait and Oman caught uncomfortably in the middle. At the same time, they face the major challenge of adjusting their economies to long-term expectations of lower oil revenue.


Subject The Gulf 's cybersecurity agenda. Significance Offensive cyber capabilities are technological tools for intruding into external digital networks to delete, steal or manipulate data. All six states of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Saudi Arabia, the United Arab Emirates (UAE) and Qatar -- are developing these capabilities in the face of multiple threats. Impacts There is currently no indication that the GCC states are preparing cyberattacks against critical infrastructure. GCC states will continue relying on Western and Israel private firms for advanced surveillance tools. Efforts to nationalise the cybersecurity sector will advance slowly. Cyber espionage is almost certainly a fourth, covert GCC goal.


Significance The sultan this month paid his first foreign visit to Saudi Arabia, establishing institutions for ongoing cooperation. Under the previous ruler, Muscat was wary of Riyadh’s dominant influence in the Gulf Cooperation Council (GCC). However, both the regional environment and Oman’s economic situation are now in a state of flux. Impacts New Saudi investment in Oman would likely focus on the tourism and industrial sectors. Higher oil prices will provide only a temporary reprieve for Muscat’s structural economic problems. Omani interactions with the United Arab Emirates could become more fraught.


Significance Saudi Ambassador to Washington Adel al-Jubeir said that a ten-country coalition was supporting the military operation, code-named 'Storm of Resolve', "to protect and defend the legitimate government" of President Abd Rabbu Mansour Hadi. Rapid Huthi advances over recent days towards Hadi's seat in the southern port city of Aden prompted him on March 23 to call on Saudi Arabia and its Gulf Cooperation Council (GCC) allies for military intervention. Impacts Yemen will prove the first major leadership test for potential future Saudi king, Defence Minister Prince Mohammed bin Salman. Even in a worst case scenario, the conflict is highly unlikely to affect Saudi oil installations. Iran's aid to the Huthis is opportunistic, not strategic; it will not risk re-engagement with the West to expand in Yemen. Sectarian tensions could rise in eastern Saudi Arabia.


Subject Egypt-UAE ties. Significance The conflict in Libya has raised questions about the relationship between the United Arab Emirates (UAE) and Egypt, both of which support eastern warlord Khalifa Haftar. Their bilateral cooperation was underlined on January 15 by the presence of the crown prince of Abu Dhabi, Mohammed bin Zayed, at the inauguration of a major new Egyptian military base on the Red Sea. The Egypt-UAE strategic relationship is characterised by a lack of transparency, but its central element seems to be a shared determination to counter the Muslim Brotherhood, both within Egypt and across the region, particularly in Libya. Impacts The UAE is sensitive to Western criticism, which could be a key consideration in its continued backing for Haftar. Open naming of the UAE for its role in Libya could shift its policy there, but is unlikely to come from Europe, Russia or the United States. Egypt would ignore criticism but is loath to engage in active military intervention in Libya, fearing a defeat.


Subject Prospects for the Gulf states in 2018. Significance The Gulf Cooperation Council (GCC) saw dramatic political changes in 2017. Mohammed bin Salman advanced to become Saudi crown prince. The GCC also split in a way not seen since its foundation in 1981, after three members -- Saudi Arabia, the United Arab Emirates (UAE) and Bahrain -- launched a boycott of Qatar in June.


Subject Saudi-Emirati strategic partnership. Significance The United Arab Emirates (UAE) and Saudi Arabia are accelerating their strategic partnership. On June 6 they held the inaugural meeting of the Saudi-Emirati Coordination Council (SECC), signalling increased assertiveness and a deliberate turning-away from the wider Gulf Cooperation Council (GCC). The partnership has become pivotal for the region but has delivered mixed results. Impacts The new SECC will eclipse the troubled GCC as the driver of Gulf policies and may deter US efforts to convene a GCC summit in September. Excluded Kuwait and Oman may look for other regional ties, as they face increasing pressure from the Saudi-Emirati duo. The two countries’coordination against Iran will define long-term alliances in the Middle East region.


Subject The Qatar crisis has an impact on South Asian migrant labour Significance On June 5, Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt cut diplomatic relations with Qatar and imposed a blockade, claiming that Qatar supports terrorism and interferes in the internal affairs of its neighbours. On June 23, Qatar was presented with a list of 13 demands to be fulfilled for relations to be restored. With Qatar unlikely to be willing or able to meet those demands, the Gulf faces a prolonged stand-off with economic and social ramifications for Qatar’s South Asian labour force. Impacts The future of the Gulf Cooperation Council (GCC) is in jeopardy. Heightened regional tensions are likely, with military confrontations between Saudi Arabia and Iran possible. Qatar may increase exports of liquefied natural gas (LNG) to South Asian countries.


Significance Former territorial tensions between Muscat and its Gulf Cooperation Council (GCC) neighbours have receded in recent decades, allowing smoother cross-border links. However, the boycott of Qatar, escalating tensions over Iran and developments in Yemen’s border province of Mahra are now straining Oman’s relations with both Saudi Arabia and the United Arab Emirates (UAE). Impacts The gap between Saudi Arabia and the UAE and the rest of the GCC could widen, contributing to the regional body’s potential demise. Oman’s role as a mediator in regional disputes -- for example, Yemen -- may be undermined by rising tensions. Unlike in the case of Qatar, new quarrels within the GCC are likely to be kept relatively quiet by the respective leaderships.


Significance This comes as Gulf Cooperation Council (GCC) states begin serious reforms to adapt to a new period of low oil prices. The United Arab Emirates (UAE) led the way in August 2015 by ending fuel subsidies, and Saudi Arabia has just reduced its own. Spending plans are being re-examined and new revenue-raising measures are being discussed seriously for the first time. Impacts Growth will stall in most sectors, particularly those that depend on government spending. Commercial opportunities may arise for companies that can help make efficiency savings or fill capacity gaps. Pressure will grow to end the Yemen war which is a drain on Saudi and UAE finances.


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