Analysis of Intensity of Intra-Regional Trade in GCC Countries, 1998-2008

Abstract

This paper addresses the intra-regional trade of the countries of the Gulf Cooperation Council (GCC), namely, the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. We have found that the intra-regional trade is still at a modest level, where the trade intensity index showed negative signals except the UAE, and Saudi Arabia. The study concludes that the unified economic policy of the GCC countries has not achieved its target in terms of increasing the level of intra trade which implies a high reliance on oil export revenues. Index Terms—Economic growth, GCC, GDP, intensity trade. The role of trade, regionally and internationally, as an engine of economic growth has increased considerably, particularly in countries that follow a policy of encouraging exports, where it leads to an increase in the gross domestic product level and improved terms of trade, which, in turn, reflects achieving acceptable economic growth. Therefore, many scholars have emphasized the positive role of improving the level of foreign trade and then economic openness However, the foreign trade commodity is one of the most important factors for economic growth in GCC countries, especially for Saudi Arabia as a main producer and exporter of crude oil, as all GCC countries characterized in a high reliance on the world by importing most of their capital and consumer goods .