| Economic regionalism is appearing today as one of the major goals of economic policy in various countries, reflecting the belief that economic development can be achieved more efficiently through a regional approach rather than within national capacity alone. However, the chosen form must be tailored to the needs of the political and economic structures of the area.;The major objective of this study, therefore, was to explore the possibility of undertaking this new avenue to development when applied to some Arab countries of the Gulf region. The countries chosen were Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates, which comprise what was labelled in this study, the "Gulf region." They are almost economically, socially and politically homogeneous, exhibiting similar structures and problems.;In the course of this investigation, the theoretical foundation of economic integration was discussed and the economic features of the countries involved were analyzed. Against this background, a search for the possibilities for cooperation was made, and the appropriate path for the Gulf states was determined.;The general conclusion of this study was that there is ample theoretical and practical justification for the formation of some sort of economic integration among the Gulf states. When the theoretical tools available, either those of the traditional school or of the non-orthodox school, were related and applied to the Gulf-region, the following were indicated: (a) the classic example of division of labor created by integration, advocated by the traditional theory and through its successful application in Western Europe, is not suitable to justify economic integration or cooperation between the Gulf states; and (b) economic integration between the Gulf states should be viewed as an approach to economic development rather than solely as a tariff issue.;The study, therefore, suggested cooperation within the industrial sphere as a key factor for cooperation between the Gulf states. Cooperation in the industrial field, however, does not indicate that there are no other areas for cooperation; it only emphasizes that industrialization is one of the important devices for achieving the structural transformation necessary for development.;Thus, the major task for the Gulf region is to force economic development by promoting industrial development to the point where a unified or coordinated industrial system can be established. However, in the initial stage, achieving this goal does not require comprehensive planning or harmonization of policies. The endeavor suggested in this study is to establish regional industrial programs as an important device for promoting industrial development at a faster rate in the Gulf region. This could be pursued through promotion of and cooperation in import substitution industries as well as export-oriented industries. The need for an emphasis on a combination of the two was illustrated by a comparison of the estimated demand for five selected industries at the national and regional levels and the minimum optimal size of these industries.;This pragmatic approach to integration seems to be the more appropriate and operational approach. It could be a stimulus for accelerating industrial development and a step toward further intensification of the integration process in the Gulf region and the Arab world as a whole.;Regional projects must not be adopted unless their economic viability is demonstrated by the means of a properly conducted social benefit-cost analysis, taking alternative locations into consideration. However, the organizational and institutional aspects of the regional program or scheme should not be ignored. In this respect, the development of a Gulf Industrial Council to administer the scheme, along with a Gulf Industrial Development Bank to undertake the technical, financial and operational matters, are valid suggestions. |
