Saudi Arabia Establishes Gulf Cooperation Council Summary

  • Last updated on November 10, 2022

Increased instability between Iran and Iraq prompted Saudi Arabia to assume leadership in protecting West Asian natural resources. The seven-nation Gulf Cooperation Council, formed in 1981, brought together some of the most powerful oil-producing Arab states to protect the stability of Middle Eastern energy and member states’ socioeconomic welfare.

Summary of Event

A major pan-Arabic partnership emerged in 1981 when the Gulf Cooperation Council (GCC) was established, following several years of political unrest in West Asia. The seven-nation GCC united some of the most powerful oil-producing Arab states in a geopolitical powerhouse and regional trade bloc. The council’s aim was to protect the stability of Middle Eastern energy and the socioeconomic welfare of its member states. Gulf Cooperation Council Oil industry;Gulf Cooperation Council Cooperation Council for the Arab States of the Gulf [kw]Saudi Arabia Establishes Gulf Cooperation Council (May 25, 1981) [kw]Gulf Cooperation Council, Saudi Arabia Establishes (May 25, 1981) [kw]Council, Saudi Arabia Establishes Gulf Cooperation (May 25, 1981) Gulf Cooperation Council Oil industry;Gulf Cooperation Council Cooperation Council for the Arab States of the Gulf [g]Middle East;May 25, 1981: Saudi Arabia Establishes Gulf Cooperation Council[04510] [g]Saudi Arabia;May 25, 1981: Saudi Arabia Establishes Gulf Cooperation Council[04510] [c]Organizations and institutions;May 25, 1981: Saudi Arabia Establishes Gulf Cooperation Council[04510] [c]Diplomacy and international relations;May 25, 1981: Saudi Arabia Establishes Gulf Cooperation Council[04510] [c]Trade and commerce;May 25, 1981: Saudi Arabia Establishes Gulf Cooperation Council[04510] Jaber al-Ahmad al-Jaber al-Sabah Fahd Qaboos bin Said Bishara, Abdullah Yaccoub

Regional instability in the Middle East of the 1980’s, notably the conflict between Iran and Iraq, was countered with unifying voices seeking common ground. This desire for conciliation led to the formation of the GCC, a protective partnership in the Persian Gulf, the largest oil-producing region in the world.

Following Kuwait’s independence in 1961, the birth of new Arab states in 1971 including the United Arab Emirates, Qatar, and Bahrain provided a suitable foundation for Arab economies around the Persian Gulf to achieve new heights.

Toward the late 1970’s, West Asia witnessed dynamic changes in its geopolitical affairs. In particular, tensions increased between the Arab states surrounding the Persian Gulf. The collapse of the shah of Iran’s regime in 1979 gave way to an Islamized regime led by the Ayatollah Khomeini. This was followed by Iraq’s attempt to annex the western Iranian province of Khuzistan, which sparked the Iran-Iraq War of 1980-1988. Iran-Iraq War (1980-1988)[Iran Iraq War] Among the many losses of that war was the destruction of western Iran’s Abadan oil refinery, then among the largest in the world.

Iraq’s hostility toward postindependence Kuwait was increasing. Additionally, the Yom Kippur War of 1973 Yom Kippur War (1973) between Israel and Egyptian-Syrian forces (the latter backed by other Arab states) resulted in an Arab-imposed oil embargo against pro-Israeli Western nations, creating that year’s worldwide energy crisis.

The turbulence that marked the Middle East of the early 1970’s gave way in 1976 to a call for unification and cooperation from the new Arab states of Kuwait and Oman. The first major attempt in this regard was made by Qaboos bin Said, the sultan of Oman, in that state’s capital, Masqat. Foreign ministers from six Persian Gulf states, including Kuwait, Bahrain, Saudi Arabia, and the United Arab Emirates, met in Muscat to discuss regional cooperation in the areas of security and defense. Despite the failure of this meeting, it was seen as the first major initiative toward the unification of the nations of that region.

In the same year, a similar dialogue was begun by Sheikh Jaber al-Ahmad al-Jaber al-Sabah, the emir of Kuwait. The vulnerability of natural resources in the Persian Gulf and Iraq’s disenchantment with Kuwait’s independence prompted Sheikh Jaber to promote talks to establish a Persian Gulf union that would protect the region’s precious resources.

Jaber’s efforts were rewarded when a joint foreign-ministerial council was formed by Saudi Arabia, Bahrain, Qatar, and Oman. When the United Arab Emirates joined the dialogue, King Fahd, the ruler of Saudi Arabia in 1981, was motivated to constitute a regional cooperation council. In November, 1981, interested member nations met in Riyadh, Saudi Arabia, and the six Persian Gulf nations Oman, Qatar, Saudi Arabia, United Arab Emirates, Bahrain, and Kuwait formally signed on as members of the Cooperation Council for the Arab States of the Gulf, or the Gulf Cooperation Council, headquartered in Riyadh.

Prominent Kuwaiti diplomat Abdullah Yaccoub Bishara was named first secretary-general of the GCC, a position he held until 1993. The creation of the GCC ushered in a new beginning for the troubled Middle East. Financial stability was one of the first issues to be addressed, and in 1983, one of the first policies enacted by the GCC resulted in the creation of the Gulf Investment Corporation (GIC), with more than $2 billion in start-up funds. The GCC’s primary financial institution, the GIC would act as the region’s financial engine, enabling regional economic cooperation between GCC nations.

During this period, the Peninsular Shield Force, a joint military defense force, was organized under the auspices of GCC member states. Thus all forms of security envisioned by Sheikh Jaber and Qaboos bin Said were addressed during the council’s formative years.

The second and most important GCC initiative also emerged in 1983, with the creation of the Unified Economic Agreement, Unified Economic Agreement (1983) a GCC free trade initiative allowing free movement of goods between its member states and waiving all customs duties on goods produced domestically. Trade agreements


Despite the Persian Gulf War of the early 1990’s and the subsequent, long-lasting war in Iraq, the GCC would maintain its role as the Persian Gulf’s most important trade bloc.

The GCC comprises three major departments: The Supreme Council, its largest and highest legislative body, provides administrative governance to its member states; the Ministerial Council is composed of foreign ministers; and the Secretarial Council is home to the GCC’s secretary-general. Member states take turns leading the Supreme Council.

The GCC’s charter provides for the protection of energy security and for regional cooperation in all aspects of Persian Gulf society, including the standardization of financial regulations, legislation, and administrative processes. More important, the GCC has worked to address major disputes in the Arabian Peninsula. In 2002, a joint declaration was passed that included clear guidelines for resolving the Israeli-Palestinian political gridlock. The declaration called for recognition of the Palestinian state and withdrawal of Israeli forces from occupied territories. In 2003, the GCC summit in Kuwait gave rise to an antiterrorism pact calling for cooperation against terrorists operating in the Persian Gulf. At the King Fahd Summit in 2005, the GCC’s unified trade policy was passed, allowing member states to trade with international partners with the collective interests of GCC members in mind. Agreements on water resources and electricity were also passed in this important summit.

The birth of the GCC inspired several regional partnerships among the Arabic-speaking nations in West Asia. The Arab Cooperation Council, founded in 1989 by member states North Yemen, Iraq, Jordan, and Egypt, collapsed soon after Iraq’s 1990 invasion of Kuwait. The Arab Maghreb Union of 1989, composed of Algeria, Libya, Mauritania, Morocco, and Tunisia, would maintain an active role in western North Africa despite ongoing territorial issues between Libya and Algeria. Gulf Cooperation Council Oil industry;Gulf Cooperation Council Cooperation Council for the Arab States of the Gulf

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Binali, Khalifa al-. The Arab Gulf Cooperation Council (AGCC) Economic Integration and Future Recommendation. Washington, D.C.: Storming Media, 2000. The Pentagon’s occasional report on the GCC’s economic system.
  • citation-type="booksimple"

    xlink:type="simple">Fasano, Ugo. Monetary Union Among Member Countries of the Gulf Cooperation Council. Washington, D.C.: International Monetary Fund, 2003. Financial health of member states as seen by the International Monetary Fund.
  • citation-type="booksimple"

    xlink:type="simple">Peterson, Erik. The Gulf Cooperation Council: Search for Unity in a Dynamic Region. Boulder, Colo.: Westview Press, 1988. Geopolitical insights into and predictions for regional cooperation.
  • citation-type="booksimple"

    xlink:type="simple">Ramazani, R. K. The Gulf Cooperation Council: Record and Analysis. Charlottesville: University of Virginia Press, 1988. Provides historical background on the GCC’s political and economic integration.

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Categories: History