The Gulf States Economies are Facing the Challenges of War

Daniel Falcone

 April 1, 2026

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Photo by Ahmed Aldaie

How long will Gulf States bleed for war on Iran that the United States and Israel are waging? That’s a question a recent Newsweek article posed. According to the reporting, specialists from all six Gulf Cooperation Council (GCC) states describe a “growing frustration with the U.S. approach to the war with Iran and a perception of Trump prioritizing Israel.”

What The Guardian has called a “worst nightmare,” the war has impacted the GCC states, including Saudi Arabia and the UAE, to such a degree that they are consumed with fury as they absorb the shock of a conflict they did not want. The closure of the Strait of Hormuz and the Iranian attacks on energy infrastructure have placed particular pressure on regional economies. For the GCC economies, costs like these don’t have any corresponding political gains. The GCC’s bargain—American bases in exchange for defense and security—doesn’t look quite so beneficial at the moment.

Further, the GCC is a strategic hub of aviation, tourism, and investment, and these industries are suffering because of the war. The Gulf states were aware of the implications before the war started. Once Israeli struck Doha in September without any reaction from the Trump administration, it served as both the “turning point” and the writing on the wall.

According to Qatari Prime Minister Sheikh Hamad bin Jassim Al Thani, the GCC States were pulled into a losing battle. He has warned of getting dragged into the conflict. At the same time, he points out that “the GCC possesses a radical, unconventional, and highly effective tool to force an end to the hostilities: a collective and complete halt of all oil and gas exports.”

GCC Skepticism

Israeli tactics, in particular, have escalated the conflict. Israel has attacked, for instance, a desalination facility in Iran and struck 30 oil storage tanks, thus precipitating Iranian and proxy attacks aimed at comparable GCC infrastructure.

As a result, GCC economies have had to suffer the unintended consequences of the war. A huge percentage of the population in the Gulf states depends on desalinated water. The states are now livid over the U.S. posture for its carelessness and an apparent determination to force Iranians to finally dig in their heels and produce a nuke.

Israeli strikes on Iranian political leadership accomplish the same thing. As Jeffrey St. Clair has observed, Israel assassinated Iranian top security official Ali Larijani “to stop any negotiated end of the war and to drag the U.S. deeper into it. In Iran, it will inevitably give more power to the most reactionary forces in the country.”

As Henry Kissinger once said, “To be an enemy of America is dangerous, but to be a friend is fatal.” Not surprisingly, GCC countries have lost trust in the United States and rewinding will be very difficult. The war has impacted interdependence and produced a “shadow of risk.” Tourism, banking, and data center construction will suffer not only short-term losses but long-term consequences because of the loss of U.S. credibility with its allies in its efforts to satisfy Netanyahu’s military ambitions. Companies like Amazon will not want to build any data centers only to be bombed again inside the year. Standard Chartered Bank recently had to evacuate and asked its Dubai employees to work from home.

The GCC is even questioning the legitimacy of U.S. bases. Even if the war ends soon, America has lost its reputation for providing reliable protection. In essence, GCC security issues of interdependence have only started.

GCC Optimism

The GCC is now raising some of the same questions as U.S. allies in Europe about the necessity to build an independent security capacity. “The conflict is accelerating the GCC’s push to diversify economic and defense ties away from exclusive reliance on the U.S., reinforcing a shift toward a more multipolar portfolio of partners,” observers Middle East expert Christopher Davidson. “At the same time, Gulf States are not abandoning Washington but are hedging by deepening relations with China, Russia, and other Asian powers in trade, finance, and arms. This reduces U.S. leverage over their economic strategies and nudges the security architecture toward a more transactional, multi‑supplier model.”

Concerning the consequences of Israel’s engagement in the region for GCC economies and regional stability, Davidson notes that,

Israel’s military actions, backed by the United States, have generated a perception in the Gulf that the region has been dragged onto the front lines, exposing their economies to shipping risks, higher insurance costs, and political backlash. As a result, the UAE and Bahrain (which signed the Abraham Accords) are likely to maintain normalization with Israel but shift toward quieter, less symbolic cooperation to manage domestic opinion and regional relationships, especially with Iran. This more discreet posture aims to preserve strategic benefits from Israel ties while limiting the economic and reputational spillovers of an unpopular war.

In terms of the GCC’s economic resilience in the face of intense geopolitical pressure, Davidson adds:

The GCC’s strong fundamentals, world‑class infrastructure, large sovereign wealth buffers, and relatively attractive regulatory environments—position their economies to remain resilient. In the long term, if the conflict delays or constrains Iran’s nuclear program, Gulf states could benefit from reduced security risks and more predictable investment conditions. They may also be well placed to capture future reconstruction contracts in Iran, should the regime soften or weaken, leveraging their capital and project‑delivery capacity to turn regional turmoil into opportunity.

The war has placed GCC economies under extreme pressure while disrupting global interdependence. The number of war crimes taking place in the conflict is undermining regional stability while producing a loathing toward the United States and Israel. As the war escalates, Gulf States are looking at their strategic interdependence and attempting to diversify beyond the Washington Consensus.

This first appeared in FPIF.

Daniel Falcone is a historian, teacher and journalist. In addition to CounterPunch, he has written for The Journal of Contemporary Iraq & the Arab World, The Nation, Jacobin, Truthout, Foreign Policy in Focus and Scalawag. He resides in New York City and is a member of The Democratic Socialists of America.

 

Porto Alegre Declaration: Unity against fascism and the sovereignty of peoples

By Various

Published date 31 March, 2026

First published at antifas2026. 

Gathered in Porto Alegre — a city that symbolizes international struggles and holds important democratic traditions and aspirations — thousands of activists from more than forty countries across five continents celebrate our unity in diversity, seeking to advance organization for resistance and the struggle against the various forms of fascism, the far right, and imperialism in its most aggressive phase.

During that same week, the Nuestra América convoy to Cuba took place; more than one million people took to the streets in Argentina, fighting for memory and against Milei; hundreds of thousands joined the antifascist mobilization in the United Kingdom; and especially the large and historic “No Kings” demonstration in the United States, where millions of Americans gathered in hundreds of cities, once again declaring Trump an enemy of humanity.

The capitalist-imperialist system is undergoing a profound crisis and a sharp economic, social, and moral decline. The response of imperialist powers to this decline has been the promotion of fascism everywhere, the imposition of neoliberal policies, military aggression against weaker nations, and their recolonization.

In each country, fascist and neoliberal threats take on specific forms, but share common features: the elimination of democratic freedoms; the destruction of labor rights; the explosion of structural unemployment; the dismantling of social security; repression of trade unions and popular organizations; privatization of public services; “austerity” policies that eliminate all social investment; scientific and climate denialism; the expropriation of peasants in favor of agribusiness; the forced displacement of Indigenous populations to promote unrestrained extractivism; ultra-restrictive migration policies; and a massive increase in military spending.

The far right and neofascist forces are carrying out a broad offensive, instrumentalizing discontent with the disastrous consequences of neoliberalism in order to accelerate these policies. To do so, similarly to classical fascism, they seek to redirect this discontent against oppressed and dispossessed groups: migrants, women, LGBTQ+ people, beneficiaries of inclusion programs, racialized people, and national or religious minorities. Exacerbated nationalism, racism, xenophobia, sexism, anti-LGBTQI+ hatred, incitement to hatred, and the normalization of cruelty accompany the advance of the far right at every stage, according to the particularities of each country.

The drive to concentrate wealth in the hands of capital, and the relentless pursuit of maximum profit that underpins far-right policies, is also expressed through the intensification of imperialist aggression to monopolize resources and exploit populations.

Imperialism is becoming increasingly unrestrained, aggressive, and militaristic. It overrides international law, the UN Charter, and the self-determination of peoples; it imposes sanctions, attacks, and bombs nations that do not submit to its dictates; it kidnaps and assassinates heads of state.

This goes hand in hand with the perpetuation of colonial situations, which in the case of Palestine take the form of an explicit genocide in Gaza, orchestrated by the Zionist State of Israel, unconditionally supported by the United States, with the complicity of other imperialist countries. Furthermore, Israel has recently invaded and criminally bombed Lebanon and has stated its intention to annex the south of the country.

We oppose all imperialisms and support the struggle of peoples for their self-determination, by all necessary means.

The far right, in addition to its complicity with Netanyahu’s genocidal government, builds international ties, organizes congresses, think tanks, joint statements, mutual support in electoral processes, and collaboration in propaganda and disinformation programs. It also benefits from direct (or covert) support from Big Tech companies, destabilizing governments that resist imperial power and amplifying reactionary propaganda in digital spaces.

The forces fighting the rise of the far right are diverse and present different analyses, strategies, tactics, programs, and alliance policies. Experience teaches us that, while recognizing these differences, it is essential to build unified action against our enemies. This convergence must include all forces willing to defend the working classes, peasants, migrants, women, LGBTQ+ people, racialized people, oppressed national or religious minorities, and Indigenous peoples; to defend nature against ecocidal capitalism; to oppose imperialist and colonial aggression regardless of its origin; to fight for the end of NATO; and to support the struggles of peoples and governments that resist. It is urgent to share analyses, strengthen ties, and carry out concrete actions.

In addition to resisting fascism and imperialism, we also aim to build the foundations to advance through convergence on central and unifying aspects. To combat authoritarianism, it is necessary to restore, expand, and deepen democratic rights based on popular participation, from the local to the national level and within international institutions. We affirm the centrality of the world of work and propose to promote joint initiatives to organize global resistance against fascist violence and neoliberal precarization. The defense of a sustainable future requires directly confronting the ecocide promoted by capitalism and by far-right governments, which treat nature as a commodity and dismantle environmental protections in the name of profit. We emphasize the importance of Agrarian Reform as a necessary path toward food sovereignty.

Never has the struggle against imperialism and fascism been as urgent and necessary as it is today. This struggle must be organized internationally. The Antifascist Conference for the Sovereignty of Peoples commits to continuing the struggle without rest and to serving as a space for building unity against the rise of the far right and imperialist aggression. In the face of barbarism, we raise the banner of international solidarity, the struggle of peoples, and a socialist, ecological, democratic, feminist, and anti-racist future.

⸻

We propose:

The International Committee, in coordination with the local committee, will be responsible for organizing the planning of the next Conference and proposing criteria and initiatives for the inclusion of new organizations.

Given the existence of numerous organizations and associations dedicated to the struggle against fascism and imperialism, we propose the creation of an international coordination space to unify this struggle globally, as well as encouraging the organization of regional and national antifascist and anti-imperialist conferences, with the aim of holding a 2nd International Antifascist Conference for the Sovereignty of Peoples.

All organizations participating in this Conference, unless they explicitly state otherwise, are automatically signatories to this declaration.

We support the organization of a Latin American conference in Argentina, at a date and format to be proposed by Argentine delegations and organizations, in dialogue with the international committee.

We support a regional conference in North America involving organizations from Mexico, the United States, Canada, the Caribbean, and Central America.

We support the Global Sumud Freedom Flotilla, which once again seeks to break the blockade and denounce the genocide in Gaza. The struggle of the Palestinian people — in Gaza and the West Bank — is the cause of humanity. We support active solidarity expressed through initiatives such as BDS.

We express solidarity with Cuba against the criminal blockade imposed by the United States and threats against its sovereignty. We support all solidarity initiatives, such as recent flotillas to the island.

We condemn the invasion of Venezuela and the kidnapping and imprisonment of President Nicolás Maduro and Congresswoman Cilia Flores, and support the struggle for their release.

We condemn the military attack on Iran by the United States and Israel. We uphold the self-determination of the Iranian people and call for an end to unilateral sanctions.

We defend the independence, self-determination, and sovereignty of all territories under colonial and imperialist occupation.

We denounce foreign interference in Haiti and support the struggle of its people.

We support the struggle of the Polisario Front for the independence of Western Sahara, a right recognized by the United Nations.

We support the struggle of the Puerto Rican people for self-determination and independence.

We support the anti-NATO meeting in Turkey in 2026.

We support the G7 counter-summit in France and Switzerland in June 2026.

We support initiatives against climate denialism, such as ecosocialist mobilizations and gatherings currently being organized.

We support and help build the next World Social Forum in Benin, in August 2026.

 

Illusion of Multipolarity: Power Still Has One Address

Zahoor Ahmad Mir , Hilal Ramzan | 

30 Mar 2026

US dominance may be contested in speeches, but in practice, it still sets the boundaries of what the rest can safely do.

On January 3, 2026, the US special forces swept into Caracas under cover of night, grabbed then Venezuela’s President Nicolas Maduro and his wife Cilia Flores, and whisked them off to New York to face narco-terrorism charges. Barely eight weeks later, on February 28, the US and Israel unleashed Operation Epic Fury, wave after wave of strikes that left Iran’s Supreme Leader Ali Khamenei dead and much of Tehran’s nuclear and missile infrastructure in ruins.

Two months, two seismic moves. And the world watched. What was perhaps even more striking than the operations themselves was the absence of any meaningful deterrent response, revealing not merely the audacity of American power but the permissive environment in which it continues to operate.

For two decades we have been told this kind of swagger was finished. Journalist Fareed Zakaria’s “rise of the rest” became the mantra: China was rising, Russia was back, BRICS was the future, and de-dollarisation was just around the corner. The unipolar moment, we kept hearing, was history. The planet had gone multipolar. Academic discourse, policy think tanks, and diplomatic rhetoric alike converged around this assumption, presenting multipolarity not as a distant possibility but as an already unfolding reality.

The evidence on the ground tells a different story. When Trump’s second administration slammed tariffs on imports, pushing the average effective rate from around 2.5% to peaks that touched 28% on key goods in 2025, the global outcry was loud but toothless.

When Maduro was snatched in broad daylight, Beijing and Moscow issued angry statements and demanded his release. They did nothing more. When the bombs rained on Tehran, the same script played out: furious condemnations at the United Nations, followed by silence.

Why the restraint? Not because China and Russia suddenly lost their nerve, but because the math of self-interest simply did not add up. Beijing is not about to torch its $600 billion plus trade relationship with the US or risk its oil tankers in waters the US Navy can shut down at a moment’s notice, not for Tehran.

Moscow, already stretched thin elsewhere, saw no upside in opening a second front over Caracas. They talk multipolarity at every BRICS photo-op. When the chips are down, they act like countries that know exactly where real power still sits. Even within BRICS itself, internal asymmetries and competing national interests prevent the emergence of a coherent strategic bloc capable of challenging American primacy in any sustained manner.

And then there are the institutions that were supposed to keep any single power in check. In a truly multipolar world, the UN and its sister bodies were meant to be the referee, the place where collective will could balance American muscle. Instead, they have become spectators in the cheap seats.

The UN Security Council, where Washington holds a permanent veto, could not muster a meaningful resolution on either Venezuela or Iran. The General Assembly passed ritual condemnations that everyone knew would change nothing.

The IMF and World Bank? Same story. These organisations were not designed to be neutral; they were built on the realities of 1945 power. Seventy years later, those realities have not shifted as much as we like to pretend. Institutional inertia, combined with entrenched voting structures and financial dependencies, ensures that any challenge to the existing order remains procedurally constrained and politically diluted.

Look at the hard numbers and the picture sharpens. The US dollar still handles 58% of global reserves and 89% of foreign exchange transactions. The US defence budget, the latest SIPRI figures put it at roughly 37% of total world military spending, dwarfs everyone else’s. When Washington sanctions someone or rewrites the trade rulebook, the rest feel the pain because they are still plugged into an American dominated system. No rival currency or alliance has come close to breaking that grip.

Efforts to promote alternative financial architectures, whether through currency swaps, regional payment systems, or digital currencies, remain fragmented and far from achieving systemic disruption.

Sure, the economic map has changed. China is a giant. India has real swing weight. Global GDP is more spread-out than it was in 1990. But turning economic heft into the ability to project force, enforce rules, and hold alliances together is another matter entirely. That part of the game still runs through Washington.

Power in the international system is not merely about accumulation of wealth but about the capacity to convert that wealth into strategic leverage, and on that count, the US continues to enjoy a decisive edge.

For India, this illusion has been a useful diplomatic tool. We have balanced the Quad with the US for tech and sea lanes, BRICS with the Russians for cheap oil, and kept our own strategic autonomy intact. It felt smart when the world looked messy and multipolar. The shocks of January and February have made the limits painfully clear. When the biggest player moves, the rest, institutions included, mostly scramble to react. This moment, therefore, compels a reassessment of strategic autonomy not as an end in itself but as a flexible instrument that must adapt to enduring hierarchies of power.

The language of multipolarity will not fade. It sounds nice in seminars, flatters our sense of fairness, and gives everyone hope that the old order is crumbling. But the past three months have been a cold reminder: the centre of gravity has not moved nearly as far as the headlines suggested. US dominance may be contested in speeches. In practice, it still sets the boundaries of what the rest can safely do. Until alternative centres of power develop not only economic scale but also institutional influence and credible military reach, the gap between rhetoric and reality is likely to persist.

The world is changing, no question. The real question is whether it is changing, as fast or as deeply, as we keep telling ourselves. For now, the answer appears uncomfortable yet unmistakable: beneath the language of transition lies a system that remains, in its core logic, remarkably unchanged.

Zahoor Ahmed Mir is an Assistant Professor at Akal University, Bhatinda, Punjab. He holds PhD from Jamia Millia Islamia. (mirzahoor81.m@gmail.com.) Hilal Ramzan is an Assistant Professor and Head of the Social Science Department at Akal University. (hilal.mphcupb@gmail.com.) The views expressed are personal.