Zongyuan Liu looks towards future alliances between the GCC and East Asia.
By Zongyuan Liu | March 28, 2017
The GCC and East Asia enjoy a vibrant relationship, particularly as it relates to the critical producer-consumer bond between the GCC and three East Asian powerhouses – China, Japan, and South Korea. While scholars and business leaders have focussed on this relationship, what also deserves attention is the increased engagement between the GCC and the Association of South-east Asian Nations (ASEAN).
Over the past two decades, this relationship has grown rapidly. At the political level, the two sides have achieved tremendous progress within an institutional framework, which demonstrates strong commitment to enhancing and expanding co-operation. At the practical level, they are now connected through an expanding flight network, which facilitates the flow of business and human capital.
Political commitment backed by an institutional framework
The synergy between the GCC and ASEAN incentivises both sides to build genuine mechanisms to enhance co-operation that would result in mutual benefit. Indeed, they have made great progress over the past two decades.
The two blocs embraced a ‘joint vision’ at the inaugural ASEAN-GCC Ministerial Meeting in 2009. The GCC-ASEAN Two-Year Action Plan (2010-12) was adopted at the second ministerial meeting a year later.
The former was regarded as “the foundation for pursuing closer and beneficial co-operation of the two regions”, while the latter outlined a practical proposal to enhance co-operation in a broad spectrum of fields, including commerce, investment, education, medicine, and food security. There is regular communication between the two sides through several, broader regional platforms, including the Asia-Middle East Dialogue, the Asia Co-operation Dialogue, and the Organisation of Islamic Countries.
Given the heterogeneities among ASEAN countries, the GCC has also entered into two bilateral agreements with individual member states to better utilise their comparative complementarities. The GCC and Malaysia signed the Framework Agreement on Economic, Commercial, Investment and Technical Co-operation in 2012. And, Singapore, the undisputed economic leader of ASEAN, became the first country outside West Asia and North Africa to bag a free trade agreement with the GCC in 2013.
Expanding air links
Gulf carriers now fly more frequently to South-east Asia than to North-east Asia. They currently operate an average of only 28 daily flights to North-east Asia, and offer about 10,000 seats to North-east Asia daily compared to about 19,000 to South-east Asia.
Daily Gulf Airlines’ Flights to North-east/South-east Asia, 2005-15
Source: CAPA – Centre for Aviation and OAG, 2015
Emirates Airline, for example, has expanded its flight coverage in South-east Asia; it now flies to 12 cities across seven countries, including Myanmar’s largest city, Yangon, and Hanoi, the Vietnamese capital. It is worth noting that Emirates has placed its 615-seat, two-class A380 behemoth on the Bangkok route, and, airports permitting, seeks to use it for flights elsewhere in South-east Asia. Qatar Airways currently has 10 gateways in ASEAN, and has plans to expand.
From 2005 to 2015, the average number of flights operated by Qatar Airways, Emirates, and Etihad Airways in South-east Asia nearly quadrupled, growing from 14 per day in 2005 to 54 per day in 2015. It is also noteworthy that Gulf airlines have used Bangkok Airways’ excellent regional network to access smaller markets while there have also been other partnerships: Emirates with Jetstar Asia in Singapore, and, more recently, with Malaysia Airlines.
Average Number of Daily Seats to South-east Asia, 2005-15
Source: Airline Leader, August 2016
Emirates alone accounts for 12% of the air travel market between Europe and South-east Asia. Once Etihad and Qatar Airways are included, 27% of passengers between South-east Asia and Western Europe travel with these three Gulf carriers and transit at Gulf air hubs including Dubai, Abu Dhabi, Doha, Riyadh, and Jeddah. With their world-class service and increasing destination coverage, Gulf airlines are becoming a first-choice for transcontinental travellers. Major Gulf cities are also well positioned to serve as transregional connecting hubs between the East and West.