The Gulf Also Rises
The Next Economic Center of Gravity
Speaking on live television during a visit to Cairo earlier this year, Saudi Arabia’s King Salman announced plans to build a bridge between his kingdom and Sharm el-Sheikh, on the tip of Egypt’s Sinai Peninsula. This ambitious construction and engineering project, dubbed the King Salman Causeway, represented a “historic step to connect Africa and Asia,” as Salman explained. He didn’t elaborate, but if he had, he also could have mentioned that it was one of the most significant demonstrations of the Gulf Cooperation Council’s drive to turn the region into a twenty-first century hub between East and West.
Outside the region, this endeavor receives much less attention than do ongoing attempts to diversify and to move away from oil. Yet becoming a globally competitive hub is a vital component of those ambitions. It is also the driver of much of the Arab Gulf’s recent success in the travel and logistics sectors, which propel global connectivity. It may even be the key to determining whether the Gulf States can continue to consolidate and expand their stability at home and influence abroad, as they have done successfully over the last four decades.
Two factors have fueled the aspiration of becoming a global hub, a new “silk road” tailored to the needs of the twenty first century. The first is geography. At least one-third of the world’s population lives within a four-hour plane journey of the Gulf, and half of the world’s seven billion people are within an eight-hour flight.
The second factor is the unprecedented oil revenues that flowed into Gulf coffers between 2003 and 2008. A Council on Foreign Relations study estimated that in 2008, as much of the world rushed toward economic crisis, the oil producers of the Arab Gulf pocketed a total of $300 billion in oil revenues. Estimates from other sources were even higher, placing their oil revenues in that same year at a staggering $575 billion, which was $400 billion over 2003 revenues. The wealth allowed the GulfRead the full article on ForeignAffairs.com