GCC balancing financial strain, Qatari quarrel

Dec. 11, 2017
Financial pressure might keep the Gulf Cooperation Council together.

Financial pressure might keep the Gulf Cooperation Council together.

The six-country group seemed, at this writing, likely to hold its annual meeting Dec. 5-6 despite the isolation of Qatar by three of the members—Saudi Arabia, Bahrain, and the United Arab Emirates—and nonmember Egypt.

Earlier, prospects for the meeting looked bleak.

In late October, the Bahraini foreign minister proposed that Qatar's GCC membership be frozen and said his country would skip the annual meeting if Qatar participated.

But in late November, all members received invitations to the summit in Kuwait City.

Bahrain, moreover, has urgent reason to attend.

The kingdom recently appealed to Saudi Arabia, Kuwait, and the UAE for help defending its currency.

Hurt, like the others, by the oil-price slump, it is exhausting its comparatively limited foreign-exchange reserves buying dinars to sustain the currency's peg to the dollar.

Among other problems, disengagement from the dollar could create inflation, which would further destabilize the island nation, with its Shia majority ruled by Sunnis.

Saudi Arabia, which helped Bahrain quell protests militarily in 2011, can hardly want more trouble at the far end of King Fahd Causeway. Kuwait and the UAE no doubt share this view.

And all GCC members would face international questions about monetary health if one of their currencies swooned.

An agreement announced in Kuwait to replenish Bahrain's reserves would provide a market-assuring message of solidarity and raise hope for resolution of the Qatari rift.

But the three members boycotting Qatar, over its ties to Muslim militant groups and Iran, would have to attend.

Because the GCC requires attendance by four heads of state, the summit would collapse if they stayed away—ominously for the group.

The rich GCC members could help Bahrain by themselves, of course. But acting under GCC auspices would do much more to buoy confidence of international lenders.

GCC leaders have more to gain than lose by spending a couple days in Kuwait City, where the weather's pleasant this time of year.

(From the subscription area of www.ogj.com, posted Dec. 1, 2017; author's e-mail: [email protected])