country formed upon independence in 1971. Concurrently, Bahrain, Qatar and Oman became independent states.
The Gulf Cooperation Council
While the Gulf States began to thrive as independent states, their common cultural and linguistic heritage, as well as the traditional political and economic links, drew them closely together.
In 1981, the Kingdom of Saudi Arabia, Oman, Kuwait, Bahrain, the United Arab Emirates and Qatar established the Cooperation Council for the Arab States of the Gulf, commonly called the Gulf Cooperation Council (GCC), in order to enhance their ties.
The group set out to co-operate on a wide range of areas, from finance and trade to administration, and from science and industry to defence. From its birth, the GCC took steps to set up a customs union and a common market loosely modelled on the European Union. With the region s currencies already linked to the US dollar, a single GCC currency has also been proposed, but not yet adopted.
The importance of oil and gas
Oil still plays a major role in meeting the world s energy needs, accounting for 40 percent of total energy requirements since 1990.
The Kingdom of Saudi Arabia provides 40 percent of all Gulf oil production and holds a fifth of the world s known crude oil reserves. At the other extreme, the deposits of the Kingdom of Bahrain s are now almost exhausted, while Qatar (which is more richly endowed with natural gas than oil) and Oman are small producers. The United Arab Emirates ranks as the world s eighth biggest oil producer, with Kuwait in tenth place.
The Gulf countries are likely to play an increasing role as suppliers of natural gas in the coming years although, because transportation of gas demands much higher levels of investment, barely a quarter of world production is currently exported.
Gas consumption has been rising steeply since the 1970s, and is growing by some 2.5 percent per year, mainly due to the industrialisation of developing countries. In the Kingdom of Saudi Arabia, gas meets 40 percent of national energy consumption. Qatar, where gas accounts for 79 percent of national energy consumption, has rapidly developed in the last decade to become the world s fourth largest producer of natural gas behind Russia, the United States and Canada and its largest exporter. Natural gas production capacity now stands at 3.75 trillion cubic feet per year, nearly four times the country s production in 2000.
31T H E G U L F S TAT E S : A U N I Q U E E C O N O M Y