Currently, the GCC lacks strong supranational organizations. National interests have previously prevented the formation of a unified Gulf army and customs union. Economically, a failure to cooperate could potentially cause permanent damage to the all six countries- each is currently trying to outdo its neighbors in an attempt to attract a greater share of the finite amounts of capital and resources present both within and outside the region. In spite of this, rival state-supported companies are being established in every significant economic sector from air transport to banking.

The success of European integration has shown that greater cooperation can lead to massive economic benefits as well as better relations between states, as can be seen in united foreign policy and defense decisions, the establishment of a large and successful free trade zone and the virtual impossibility of war breaking out between member states. Tensions between EU member states have been mitigated by strong supranational institutions as well as by increased links between states. The latter has also created powerful interests in each of them that would suffer in the event of bad ties with other EU members.

The GCC could easily adopt elements of the EU model, for instance by creating a new assembly with members selected by the national assemblies of all six states. It could then abandon its present requirement for any proposal to be unanimously approved by the heads of state of the six members, saving that condition for questions of vital national importance, like defense pacts.

This new assembly could initially have limited powers and discuss matters that are not deemed central to state survival, like education, culture and sports. Sessions could be held behind closed doors when sensitive topics are discussed. The scope of matters it would be permitted to discuss could increase gradually as the rulers saw its benefits and learned to trust it. The assembly could take the lead in greater GCC integration by passing new legislation and by asking national governments to review existing legislation that is incompatible with greater GCC aims. By standardizing laws and requirements, it would become easier for Gulf citizens to do business in one another's countries. Foreign investors would also find it more enticing to enter what would effectively constitute a larger, single market.

Regional economic champions should be created to avoid any duplication of effort. For instance, Saudi Arabia could take the lead in building new oil refineries, Gulf cargo could be routed through Dubai when possible and Bahrain could serve as the region's financial services hub. A joint GCC budget could help connect these facilities to neighboring countries.

An open skies agreement for commercial air traffic and an agreement allowing GCC nationals to have the same privileges as natives of other GCC states would also be helpful. The latter would enable them to set up and run businesses without needing to search for local partners, to trade in each other's financial markets and to invest on better terms in real estate throughout other GCC countries. That, in turn, would also allow for surplus capital in the richer GCC states to be invested more easily inside poorer markets. That, in turn, would create real development in the latter, while bringing returns to investors, thereby creating a situation that benefits everyone concerned.

A common GCC foreign policy stance would carry more weight internationally. Later, a common defense policy might also be initiated, leading to compatible weapons systems and helping with economies of scale during arms purchases.

People-to-people ties are perhaps the most crucial aspect of integration. Some initial steps that could be taken in this regard include the creation of Gulf equivalents to Europe's Champions' League football tournament and Eurovision song contest. Another would be an end to all restrictions on marriages between GCC nationals from different countries. A more significant undertaking in this direction could be to modify textbooks throughout the GCC in order to include common civics lessons- ones that would reflect a shared past and a common future. The end goal would be the creation of a common Gulf identity.

The combination in each country of heavy state involvement in the economy (and resulting questions of national prestige) as well as politically powerful businessmen with vested interests in relatively closed markets mean that political considerations must be addressed while assessing the scope for economic cooperation. However, the rulers of the six GCC states should favor regional and not national interests for the greater good of their people. To bring about greater unity of purpose and policy, rulers must recognize that existing cooperation is inadequate and current methods to enforce agreements are toothless. New institutions with real authority are needed- although power can and indeed should be ceded to them gradually.

Tricky negotiations must be undertaken in order to resolve territorial disputes. This would make help proposals for a Schengen-style border agreement that would allow residents and expatriates to travel freely between GCC member states. Only then would proposals for rail links and better road networks would be commercially viable.

Note: This is a condensed version of a paper I’m writing, if anyone wants to see that, I can put it up online somewhere.