Invoking US former president Bill Clinton's 1992 campaign slogan – “It's the economy, stupid” – best explains the revival of Gulf-Asia ties.

Long before the United States announced its strategic rebalancing policy of ‘pivot’ to Asia, the Gulf Cooperation Council (GCC) countries had taken a view and recognised Asia as an ally of the future. Though these ties were rooted primarily in transactional economic activities, they have evolved into agents capable of impacting geopolitics. The defining developments of Gulf-Asia ties lie in the events that occurred, first, at the turn of the century due to Asia's economic miracle and the impact of 9/11, 2001; and second, the impact of these two events in the Gulf scenario, which were evident in the landmark reciprocal trips by Asian and Gulf leaders.

This chapter explores and highlights areas of economic complementarity, both in the oil and non-oil sectors, including trade and cross investments. In the process, it also compares various dynamics of Gulf-Asia ties in the context of the Gulf countries’ relations with the United States and the European Union.

A few equally-important non-economic factors that may have contributed to intensifying Gulf-Asia relations are also discussed. Finally, the chapter points out potential areas of future cooperation in an era driven by economic diversification and emphasis on the fourth industrial revolution in the Gulf. It ends by arguing that a robust Gulf-Asia relationship should find new ‘strategic’ political and security avenues to intensify collaboration in the decades ahead.

Economic Complementarity

The increasing significance of Asia as an ally of the GCC countries occurred at a time when: first, Asia's oil consumption was soaring amid an economic boom; and second, the economies of the GCC countries were robust following high oil prices and needed new avenues to diversify and invest.

According to the International Monetary Fund, 2013 was the first year in which emerging markets contributed to more than half of global GDP, based on purchasing power. While they accounted for less than a third in 1990, their share of world output grew over a percentage point annually between 2003 and 2011.