The Arab Gulf Cooperation (AGCC) economic integration and future recommendation

Abstract

This thesis discusses the historical events that lead to the establishment of the AGCC organization and analyzes the cooperation of the AGCC countries in politics, security, economy, as well as defense spending at lower life cycle cost. U.S. foreign military sales (FMS) are a good tool to facilitate the arms trades between the U.S. and the AGCC countries. The thesis discuss threats to the region and AGCC relations with the west. This thesis also discusses the economies of the AGCC countries and indicates that the AGCC countries are still largely oil-based economies. Moreover, the economic characteristics of these countries indicate that they are not ready at their current stage to form a full monetary union. However, these countries are economically qualified for several forms of partial monetary integration, such as an exchange rate coordination arrangement, capital market integration. Also, the thesis suggests additional economic diversification programs are needed and essential to enhance the development of sustainable economies. Finally, this thesis provides recommendations for exchange rate unification and monetary integration among the AGCC countries to strengthen and move the AGCC forward in the future.