The GCC economies and the crash: short-term weaknesses, long-term strengths

After an initial phase in which analysts expected the Gulf Cooperation Council’s (GCC) fiscal cushions to ward off the global economic crisis, the world recession has started to reverberate in the Gulf. 1 The Gulf monarchies are in some ways better, but in other ways worse, equipped to ride out the storm. As many strategic assets remain in state hands, Gulf countries do not have to go through a painful period of nationalisation, but can react in a more immediate and nationally-coordinated fashion to market failures. The crisis has nonetheless highlighted key institutional weaknesses of the GCC countries.