December 3, 2010
Gulf should review dollar peg -UAE
DUBAI - Gulf countries should discuss whether to shift their currency peg to a basket of international currencies instead of the dollar, the economy minister of the United Arab Emirates was quoted as saying on Thursday.
Gulf officials have previously denied any risks to pegs in the region, which relies heavily on imports, as a result of the weak U.S. currency.
Sultan Saeed al-Mansouri told the Arabic language Alsharq Al-Awsat newspaper that shifting pegs towards a currency basket would help Gulf countries protect their currencies and investments.
Policymakers in the world's top crude exporting region have long said that the dollar pegs they have serve their hydrocarbon-heavy economies well as long as inflation stays under control.
Inflation has started to pick up as key Gulf economies recover, recently hitting 18-month highs in the UAE and Kuwait, but it remains far below 2008 record peaks.
Kuwait is the only country in the region tracking a basket of currencies, having broken ranks in 2007 with other Gulf states whose currencies are pegged to the dollar.
Mansouri said the U.S. economy was "a strong and growing economy despite that it passes through a specific time that will affect the value of the dollar in one way or another".
Some economists have warned the Federal Reserve's latest bid to revive the U.S. economy with a $600 billion liquidity injection could fuel inflation and put the credibility of the dollar at risk.
The U.S. economy continued its slow recovery in recent weeks, the Fed said on Wednesday, with pockets of strength in manufacturing offset by "depressed" housing markets and employers still reluctant to hire in significant numbers.
The UAE's economy is expected to grow by 3 to 3.5 percent in 2011, Mansouri said last week.
He also said the UAE's gross domestic product (GDP) should reach 1 trillion dirhams ($270 billion) in 2010. Nominal GDP had fallen to 914.3 billion dirhams in 2009 from 934.3 billion dirhams in 2008 after the global slowdown.
In addition, the situation in Yemen will also figure high at the summit, in light of the twin suicide bomb attacks on Shiite followers on Nov. 24 and Nov. 26, and a foiled suspected al-Qaida plot in which two explosive packages were addressed from Yemen to synagogues in the United States. The country is considered a potential area for security hazards to the region.
The GCC summit will review the latest developments in the Palestinian territories and the progress of the stalled peace process in the Middle East, after the Palestinians quit the U.S.- brokered Israeli-Palestinian direct talks when Israel allowed a partial moratorium on building to expire in September.
Iraq's lawmakers approved an agreement that aimed at bringing Iraq's feuding political blocs into a new government led by Prime Minister Nuri al-Maliki. But violence and sporadic high-profile bomb attacks continued in Iraqi cities, which pose a serious threat to the Gulf nations in close proximity.
Meanwhile, developments in Somalia, Lebanon and Sudan are also expected to be on the agenda.
REGIONAL DEVELOPMENT HIGH ON AGENDA
Regional development and intra-cooperation are also expected to take center stage in the summit.
One of the topics on the GCC agenda is the Common Gulf Market, an agreement for which was signed in 2008 that ensures all Gulf citizens are treated as equals economically in all GCC states, and would allow Gulf citizens to seek work or medical treatment, for instance, in any of the GCC countries.
A long train journey to exotic destinations across the Gulf countries would be possible if final permission is granted to the GCC railway project at the Abu Dhabi summit. The much-talked about 2,117 km rail network, starting in Kuwait and Saudi Arabia, is likely to be completed by 2017 to unite the Gulf.
The last but definitely not the least, oil price will surely be discussed in the summit of the GCC nations. An economic slowdown in Europe next year is likely to dampen global oil demand, but strong growth in emerging markets such as China and India will ensure that international oil prices remain stable, significantly above 70 U.S. dollars a barrel, according to some analysts.
The Gulf unified currency and its policy framework will also be highlighted in the forthcoming GCC summit. Whether the UAE and Oman will change their position remains a grave concern of the region.
Topics of cooperation in trade, education and business fields among the regional nations and with countries outside the region will also be touched upon in the summit.
Founded in 1981, the GCC groups the six Gulf Arab countries, namely Kuwait, Qatar, Saudi Arabia, Bahrain, the UAE and Oman, which together hold around 40 percent of the world's oil reserves and pump around 16 million barrels of crude oil per day.
http://www.einnews.com/uae/newsfeed-uae-gcc
Gulf should review dollar peg -UAE
DUBAI - Gulf countries should discuss whether to shift their currency peg to a basket of international currencies instead of the dollar, the economy minister of the United Arab Emirates was quoted as saying on Thursday.
Gulf officials have previously denied any risks to pegs in the region, which relies heavily on imports, as a result of the weak U.S. currency.
Sultan Saeed al-Mansouri told the Arabic language Alsharq Al-Awsat newspaper that shifting pegs towards a currency basket would help Gulf countries protect their currencies and investments.
Policymakers in the world's top crude exporting region have long said that the dollar pegs they have serve their hydrocarbon-heavy economies well as long as inflation stays under control.
Inflation has started to pick up as key Gulf economies recover, recently hitting 18-month highs in the UAE and Kuwait, but it remains far below 2008 record peaks.
Kuwait is the only country in the region tracking a basket of currencies, having broken ranks in 2007 with other Gulf states whose currencies are pegged to the dollar.
Mansouri said the U.S. economy was "a strong and growing economy despite that it passes through a specific time that will affect the value of the dollar in one way or another".
Some economists have warned the Federal Reserve's latest bid to revive the U.S. economy with a $600 billion liquidity injection could fuel inflation and put the credibility of the dollar at risk.
The U.S. economy continued its slow recovery in recent weeks, the Fed said on Wednesday, with pockets of strength in manufacturing offset by "depressed" housing markets and employers still reluctant to hire in significant numbers.
The UAE's economy is expected to grow by 3 to 3.5 percent in 2011, Mansouri said last week.
He also said the UAE's gross domestic product (GDP) should reach 1 trillion dirhams ($270 billion) in 2010. Nominal GDP had fallen to 914.3 billion dirhams in 2009 from 934.3 billion dirhams in 2008 after the global slowdown.
In addition, the situation in Yemen will also figure high at the summit, in light of the twin suicide bomb attacks on Shiite followers on Nov. 24 and Nov. 26, and a foiled suspected al-Qaida plot in which two explosive packages were addressed from Yemen to synagogues in the United States. The country is considered a potential area for security hazards to the region.
The GCC summit will review the latest developments in the Palestinian territories and the progress of the stalled peace process in the Middle East, after the Palestinians quit the U.S.- brokered Israeli-Palestinian direct talks when Israel allowed a partial moratorium on building to expire in September.
Iraq's lawmakers approved an agreement that aimed at bringing Iraq's feuding political blocs into a new government led by Prime Minister Nuri al-Maliki. But violence and sporadic high-profile bomb attacks continued in Iraqi cities, which pose a serious threat to the Gulf nations in close proximity.
Meanwhile, developments in Somalia, Lebanon and Sudan are also expected to be on the agenda.
REGIONAL DEVELOPMENT HIGH ON AGENDA
Regional development and intra-cooperation are also expected to take center stage in the summit.
One of the topics on the GCC agenda is the Common Gulf Market, an agreement for which was signed in 2008 that ensures all Gulf citizens are treated as equals economically in all GCC states, and would allow Gulf citizens to seek work or medical treatment, for instance, in any of the GCC countries.
A long train journey to exotic destinations across the Gulf countries would be possible if final permission is granted to the GCC railway project at the Abu Dhabi summit. The much-talked about 2,117 km rail network, starting in Kuwait and Saudi Arabia, is likely to be completed by 2017 to unite the Gulf.
The last but definitely not the least, oil price will surely be discussed in the summit of the GCC nations. An economic slowdown in Europe next year is likely to dampen global oil demand, but strong growth in emerging markets such as China and India will ensure that international oil prices remain stable, significantly above 70 U.S. dollars a barrel, according to some analysts.
The Gulf unified currency and its policy framework will also be highlighted in the forthcoming GCC summit. Whether the UAE and Oman will change their position remains a grave concern of the region.
Topics of cooperation in trade, education and business fields among the regional nations and with countries outside the region will also be touched upon in the summit.
Founded in 1981, the GCC groups the six Gulf Arab countries, namely Kuwait, Qatar, Saudi Arabia, Bahrain, the UAE and Oman, which together hold around 40 percent of the world's oil reserves and pump around 16 million barrels of crude oil per day.
http://www.einnews.com/uae/newsfeed-uae-gcc
