December 23, 2010
GCC states will reap great benefits from monetary merger -- expert
KUWAIT, GCC states will reap substantial benefits as a result of realizing monetary merger such as promoting inter-Gulf trade and limiting risks, said an eminent Kuwaiti academician on Wednesday.
Dr. Mohammad Al-Saqqa, professor of economics at Kuwait University, said in a session, held today, of the "Conference on Political and Economic Transformations and their Impacts in the Gulf and Arabian Peninsula," said joining the monetary union results in much benefits for the member states of the Gulf Cooperation Council, namely cutting costs of transactions, limiting risks that exist dealing with diverse currencies, increasing inter-Gulf trade and encouraging investments among these countries.
Common features of the GCC states, namely language, religion, geographical location, history and culture should be helpful for speeding up the establishment of the joint GCC federation ahead of issuing the single GCC currency, Dr. Saqqa added.
The issuance of a single GCC currency was first raised with the establishment of the council in 1981. The GCC leaders during their summit, held in Bahrain in 2000, decided to peg the currencies of the GCC states to the US dollar. Finance ministries and governors of the GCC countries were tasked with drafting a schedule for the establishment of the monetary federation and issuing the common currency.
GCC states, professor Saqqa affirms, face various economic challenges notably the excessive dependence on oil for national income, defects in the spending systems and the public sector control of economic activities.
The conference, organized by the Center for Strategic and Future Studies at the University of Kuwait, kicked off on Monday. The conference, held under auspices of Minister of Education and Higher Education Dr. Moudhi Al-Homoud, is due to conclude later today.
Dr. Fuad Al-Afiri, professor of administrative auditing and deputy rector of the college of business administration faculty of the Yemeni Ibb University, presented the conferees with a study shedding light on cons and pros of joining the common currency system in the Gulf.
In the study, the Yemeni academician sheds light on deep complications facing such a move, in the shadow of effects of the global financial crisis.
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