Introduction
COVID-19 is one of the most frequently heard words in today’s society, and people develop their own attitudes toward this situation. Some individuals believe it is one of the most dangerous challenges that the world has ever faced. Legrain (2020, p. 24) calls it a “global shock” that makes “economies more national and politics more nationalistic”.
The Gulf Cooperation Council (GCC), as well as any other region, undergoes a number of considerable changes due to the consequences of the coronavirus crisis. In this brief, attention will be paid to such economic issues as the relationships of the Gulf region with China, energy exports, and oil price changes.
Problems
China Relationships
When the first wave of the COVID-19 challenged the Chinese population, the GCC states expressed public support for the country due to the already established business relationships. Arab leaders found it necessary to provide the Wuhan with medications. China has already been a significant economic partner for the GCC, and the pauses in their trade and tourism relations could bring a number of negative outcomes.
There were many tourism-related jobs in the GCC, and now, about 100,000 job seekers are in need of special programs, with 60% of subsidized wages in Saudi Arabia, as an example (Gentilini et al., 2020). Chinese tourists are not able to visit the Arab countries, and hotels experience the lowest average daily rates in their history.
Energy Export
Another consequence of the COVID-19 touches upon energy export in the region. The Gulf States are heavily dependent on energy production as it counts about 90% of the federal budget. Today, many companies lose about $500 million per day because of the absence of regular energy players in the region. As a result, organizations are in need of significant transformation and reformations to cover losses and find new sources of development.
Oil Prices
The collapse of oil prices cannot be ignored, especially in such countries as Kuwait, Saudi Arabia, and Oman. These countries have established close trade relations with China, and the current decrease of $20 per barrel is already a threat (Telci, 2020). The domestic demand for oil has also reduced in the GCC because many businesses must freeze their activities to protect their investments and avoid unnecessary consumption. The COVID-19 situation is hard to predict, and many Arab organizations have to think about additional ways of how to consume and sell oil without serious losses in the future.
Recommendations
Regarding the global economic impact of the coronavirus crisis, the GCC is in need of certain recommendations to stabilize the situation and avoid considerable losses. One of the main aspects of the case is that the GCC is not the only region in trouble. COVID-19 continues spreading worldwide, and the lack of international responses is a common problem.
Besides, the United States is at risk of losing its leadership, which creates new opportunities for the Gulf to cooperate with China and fill in the power vacuum. It is necessary to respond to the pandemic from several perspectives, both at home and abroad. If global support is required, the GCC should demonstrate its readiness to cooperate, and the relationships with China are more than favorable.
Social insurance for the locals plays a crucial role because the population should feel and observe an understanding from the government. This way will help to predict social discontent, rebellions, and other forms of conflict. There is no need to pursue wealth and oil price stabilization, but to demonstrate fair judgments and attitudes globally.
Reference List
Gentilini, U. et al. (2020) Social protection and jobs responses to COVID-19: A real-time review of country measures. Washington: World Bank Group.
Legrain, P. (2020) ‘Will coronavirus kill globalization?’ Foreign Policy, pp. 23-25.
Telci, I.N. (2020) The implications of covid-19 in the Gulf: Challenges and constraints. Web.