AlRiyadh newspaper quotes Dr. Nasir Al'Uqud, Assistant Deputy Secretary General for Economic Co-Operation of the GCC as saying that the Governors of the Central Banks of Bahrain, Kuwait, Qatar and Saudi Arabia will meet in the coming weeks to form the Gulf Monetary Council ("GMC") as a first step in the creation of a unified currency for the GCC and a GCC Central Bank.
Oman and UAE are not participating in either the common currency program or the GCC Central Bank. Apparently the UAE was miffed that the CB will be headquartered in Riyadh as opposed to Abu Dhabi. It announced this May that it was not participating. Oman had advised its withdrawal back in 2006 (or early 2007?).
The GMC is charged with taking all the steps necessary to establish monetary union, including the timing thereof and the issue date of the new common currency. the specifics of the unified currency and its issue date as well as setting up the basic infrastructure. Associated with the common currency will be the development of plans to co-ordinate GCC economies and set up related units to implement and monitor that process.
The original plan was to issue the unified currency in 2010, but the GMC will have the right to determine the timing. The article notes that unnamed Gulf officials expect it to take several years for the currency to be issued.
Hope remains that Oman and the UAE can be persuaded to join at a later time.
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2 comments:
These meetings, and God forbid, an actual monetary council or union, are a total waste of resources (time and money).
When these people decide to agree on their borders then maybe, possibly, such higher level concepts will become viable concepts worth talking about.
I disagree.
Sometimes one does what one can.
Progress in one area may well lead to progress in others.
A common currency could lead to greater internal strength among the GCC - co-ordination of monetary and economic policy, unified capital markets - as well as improving the external position of the GCC vis-a-vis the rest of the world.
Things won't happen over night but then the Treaty of Rome took a while to reach its current state of development.
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