GCC Monetary Union: Meeting to Discuss Unified Banking Regulations and Supervision

Officials from Bahrain, Qatar, Kuwait and Saudi Arabia met in Riyadh today to discuss plans for unified banking regulations and supervision in the GCC states adhering to the Gulf Monetary Union.  At present Oman and the UAE have "excused" themselves from participation in the GMU.

Hopefully this process will lead to a raising of standards and supervision in some countries rather than bringing down the leader in that field to a lower level.

GCC Secretary General Update: GCC Central Bank & EU-GCC Free Trade

Asharq AlAwsat reports on comments by Abdulrahman Hamad AlAttiyah, the Secretary General of the GCC, from a Qatari-Saudi business conference this Saturday.

1. The first meeting of the GCC Central Bank is scheduled for 30 March in Riyad.  The Governors of the Central Banks of Bahrain, Kuwait, Qatar and Saudi will attend.  Discussions will focus on legislative, institutional, and procedural aspects related to the currency union and the single currency.  More technical meetings will follow to continue the steps necessary to launch the single currency.
2. He remains optimistic that the UAE will join the single currency project and will be able to quickly catch up.
3. The EU has presented some new proposals in a bid to reinvigorate the stalled EU-GCC Free Trade negotiations (which began in 2008).  Their proposals have to do with a more flexible less time bound approach to the issue of customs duties, including those on exports.  The GCC is studying and will revert.

There were also some points on the GCC railway:

1. Project is in the detailed study/technical drawings after having obtained agreement in principle.
2. HQ for the organization to supervise the railway has not yet been chosen.  

And some news from the Qatar-Saudi businessmen's conference which 300 businessmen attended:

1. 2008 trade between Qatar and KSA was some SAR6.2 billion (US$1.65 billion).
2. The number of joint Q-KSA projects in the Kingdom through June 2009 was 16 with capital of SAR6.1 billion.
3. Various speakers called for increased co-operation.
4. Ahmad Al San'i (Saudi businessman) called for creation of a joint company in which the two governments should invest to promote business in Qatar and Saudi.
5. Picking up on that theme, Khalid AlMuqayrin, (another Saudi businessman) called on the SWFs of the two countries to invest at least 5% of the value of their holdings in the two countries so that "there would be a direct return to the two countries and their citizens rather than having all their investments far from the region which don't have a direct impact on citizens".

GCC Monetary Union: Imminent Meeting to Form Gulf Monetary Council

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.