GCC economies and their role in the world economy Research Paper

GCC economies and their role in the world economy - Research Paper Example The Gulf Cooperation Council (GCC) was formed on May 26, 1981. The GCC is an organization specifically formed to unite the Arab oil producing countries. Its major operation angle is to the southern regions of Asian continent. GCC is made up of six active Arabian countries that involve the Saudi Arabia, United Arab Emirates, Kuwait, Oman, Bahrain and Qatar. However, some new applications for membership have been received from other oil producing Arabian countries like Jordan and Morocco. The objectives of GCC are to unite the member states with the aim of harmonizing quotas of oil in the world market. The members have several factors in common among them religion, political structures, climatic conditions and natural resources. The organization also seeks to coordinate and promote economic productivity of the member states (Mohammed, 2011). The organization also intends to boost education, healthcare, employment and trade among the member states. Saudi Arabia Saudi Arabia in the views of Mohammed (2011) forms four-fifths of the entire GCC. Besides being a member of the GCC, Saudi Arabia is also a member of Organization of the Petroleum Exporting Countries (OPEC). Saudi Arabia has been voted the world’s largest oil reserve among the OPEC and the GCC member states. In fact, oil production is the backbone of all the economic sectors in Saudi Arabia. Estimates indicate that a third of the total oil produced by the OPEC comes from Saudi Arabia (Mohammed, 2011). Oil production in Saudi Arabia on a daily basis estimates at around 10 million barrels. As a result of massive oil reserves that infiltrate money to the country, Saudi Arabia enjoys a diversified economy with plenty of production industries that have offered jobs to its citizens and the world population in general. The oil sector has contributed to the development of various industries such as petrochemicals, fertilizers and steel manufacturing industries that boosted the export products of the country. Mohammed (2011) adds that Saudi Arabia has excelled in the production of dates and even becoming the world’s best producer of dates. Saudi Arabia also has expanded fishing grounds and a lot of money has been ventured to modernize and promote sea fishing activities. In 1998, OPEC slashed Saudi Arabia’s global supply quota to 8 million barrels per day. The imposition of the quota led to significant fall on the country’s total income. Telecommunications investment (% revenues) in Saudi Arabia In the reports of World Bank, telecommunication investments revenue in Saudi Arabia reached 84.12% in 2008. Telecommunication investments are expenditures associated with purchasing the ownership of telecommunication equipment infrastructures including land, building, labor and computer software. Source; Trading Economics, 2011 Current statistics in the world oil market show that Saudi Arabia has much potential to increase its oil injection by additional 2.5 million barrels a day (Daya, 2011). Such an injection can boost oil supply in the world market and even ease the world energy crisis. Oil