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14 July 2024

Crisis widens GCC-Iran imbalance

By Staff Writer

The global financial crisis has widened the economic gap between the Gulf Co-operation Council (GCC) and Iran, and this could cause further tension in the oil-rich region, a US analyst has said.

James Russell, Senior Director for the Center for Contemporary Conflict at the Naval Postgraduate School in California, said the crisis has affected the GCC and most other countries but added that the six members can weather its consequences given the massive wealth they have accumulated over the past six years because of a sharp rise in their oil export revenues.

In an interview published by the Abu Dhabi-based Emirates Centre for Strategic Studies and Research, Russel said the US and other industrial giants are passing through a period of economic downturn, which "I fear could grow more serious in the next six to nine months".

"But the GCC states have over the last six years amassed – by any measure – incredible economic wealth that establishes them as a global economic power, and far ascendant over Iran. Thus, there is a great economic imbalance between the GCC states and Iran," he said in the interview published yesterday.

"For their part, Iranians have not woken up to the fact of how far behind they are to the GCC at this stage. Economic mismanagement has doomed the revolution in Iran and the leadership refuses to admit it," he added.

"My worry is that once they realise how far behind they are vis-à-vis the GCC they would feel more insecure. This insecurity could breed misperception, and misperception could lead to miscalculation on their part, which can be another motivational factor for them in looking at their nuclear programme as an instrument to create a coercive political framework over Gulf states."